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Answer:
The total monthly fixed manufacturing cost is $328,000.
Explanation:
For 4000 units, The direct materials cost is $99.2 per unit, the direct labor cost is $45.5 per unit, the manufacturing overhead cost is $94.
For 5000 units, The direct materials cost is $99.2 per unit, the direct labor cost is $45.5 per unit, the manufacturing overhead cost is $77.6.
Total manufacturing overhead for 4,000 units
=
= $376,000
Total manufacturing overhead for 5,000 units
=
= $388,000
The variable cost per unit
=
= $12 per unit
Fixed costs
= Total cost - Total variable costs
=
= $328,000
Answer:
Task a:
The answer is $24,500.
Task b:
The answer is 17%
Explanation:
<h2>Task a:</h2><h3>What is the maximum amount of new capital that can be raised at the LOWEST component cost of EQUITY?</h3><h3>Solution:</h3>We already know the following:
Projected net income = $21,000
Payout ratio = 30%
Retention ratio = 70%
Debt share = 40%
Equity share = 60%
Maximum amount of capital to be raised at the lowest component cost of equity = Projected net income ×
= $21,000 ×
= $24,500
<h3>Answer:</h3>The maximum amount of new capital that can be raised at the lowest component of equity is $24,500.
<h2>Task b:</h2><h3>What is the component cost of equity by selling new common stock?</h3><h3>Solution:</h3>k(e) (component cost of external equity) = [Dividend (D0)(1 + growth) / stock price(1 - flotation cost)] + growth
Formula:
k(e) = + 0.05
Where
Do = $2.00
G = 0.05
P = $21/88
= ($2.00(1 + 0.05) / $21.88(1-.20)) + 0.05
= ($2.10/$21.88(1-.20)) + 0.05
= ($2.10/$21.88(0.80) + 0.05
= 0.17 or 17%
<h3>Answer: </h3>The component cost of equity by selling new common stock = 17%