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1 year ago

Given the following information for Albright Company, what was the factory overhead cost variance?

Business

1 answer:

Lera25 [3.4K]1 year ago

6 0

Answer:

The correct answer is option (b) unfavorable

Explanation:

From the question given

We solve for the factory overhead cost variance to know whether it is favorable or unfavorable.

Solution

The Total cost variance for manufacturing = Standard Cost at Actual Volume - Actual costs

Thus,

= 196,500-202,100

= $5,600 unfavorable

Therefore the overhead cost of variance is = $5,600 which is unfavorable

Correct option is b.

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C) intranet

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Answer:

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2 years ago

Jimmy just turned 50 and has retirement savings in an IRA. How many years will he have to wait to be able to withdraw money with

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2 years ago

Read 2 more answers

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2 years ago

The stock of Business Adventures sells for $50 a share. Its likely dividend payout and end-of-year price depend on the state of

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Answer:

Holding period return = 14.49%, Standard Deviation = 11.08 approx

Explanation:

Eco Scenario Dividend Stock Price HPR Prob Expected HPR

Boom 3 60 26 0.33 8.58

Normal 1.2 58 18.4 0.33 6.072

Recession 0.75 49 (0.5) 0.33 (0.165)

Expected HPR 14.49%

Calculation Of Standard Deviation

(A) (B) (A) - (B)

$P_{1}$ $P_{0}$ $D_{1}$ Given return Exp return d p $p.d^{2}$

60 50 3 26 14.49 11.51 0.33 43.718

58 50 1.2 18.4 14.49 3.91 0.33 5.045

49 50 0.75 (0.5) 14.49 14.99 0.33 74.15

Total $p.d^{2}$ = 122.91

wherein, d = deviation

p = probability

Standard Deviation = $\sqrt{Total\ p.d^{2} }$ = $\sqrt{122.91}$ = 11.08

Working Note:

Holding period return = $\frac{P_{1}\ -\ P_{0} \ +\ D_{1} }{P_{0} }$

Boom = $\frac{60\ -\ 50 \ +\ 3 }{50 }$ = 26%

Similarly, for normal = $\frac{58\ -\ 50 \ +\ 1.2 }{50 }$ = 18.4%

Recession = $\frac{49\ -\ 50 \ +\ 0.75 }{50}$ = (0.5)%

figure in bracket indicates negative return

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2 years ago

Nancy's Notions pays a delivery firm to distribute its products in the metro area. Delivery costs are $32,000 per year. Nancy ca

SVETLANKA909090 [29]

Answer:

a. Internal Rate of Return

Annual Cash Inflows = (Net Savings - Depreciation) * ( 1 - Tax Rate) + (Depreciation * Tax Rate)

Net savings = Delivery Costs - Operating and Maintenance Costs with the Used Truck

= 32,000 - 21,000

= $11,000

Depreciation = (Cost of used truck - Salvage value) / Useful life

= (13,000 - 2,000) / 3

= $3,667

Annual Cash inflows = $7,000 as there are no taxes.

Use Excel to calculate IRR as shown in the attachment.

The cost of the truck is the outflow and the savings and the salvage value are inflows which means that the last inflow will be $13,000 because salvage value is added in the last year.

IRR = 69.408%

b. If the IRR is greater than the cost of capital or required rate of return, the project should be chosen.

c. The IRR of 69.408% is greater than the MARR of 34% so Nancy should buy the truck.

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1 year ago