Jake owns a company called Boat Builders, LLC and one evening he took several of his employees out after work to a bar. After ea
1 answer:
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Answer:
Actual Direct material cost = $81,500
Actual Direct labor cost = $187,500
Actual manufacturing overhead = $272,000
Explanation: kindly see attached picture for detailed explanation.
Variances ; Standard Cost Unfavorable Favorable Direct materials $ 80,000 Price variance $ 4,500 Quantity variance $ 3,000 Direct labor 184,000 Rate variance 2,700 Efficiency variance 6,200 Manufacturing overhead 271,000 Spending variance 4,000 Volume variance 5,000 Determine the actual costs incurred during the month of May for direct materials, direct labor, and manufacturing overhead.
Answer:
a) Total book value = $85,000,000
b)Market value of debt = $27,650,000
c)After tax cost of debt = 2.74%
Explanation:
As per the data given in the question,
a) Debt = $50,000,000
Zero coupon bond = $35,000,000
Total book value = $50,000,000+$35,000,000
= $85,000,000
b) Market value of debt = $50,000,000×104%
=$52,000,000
Market value of zero coupon bond = $35,000,000×79%
=$27,650,000
Total market value = $52,000,000+$27,650,000
= $79,650,000
c) Market value weights for debt = 0.65
Market value weights for Zero coupon bond = 0.35
After tax cost for Debt ( By using financial calculator )
( 0.01857 ×2 × (1-24%)) = 2.82%
After tax cost for Zero coupon bond ( By using financial calculator )
( 0.01698 ×2 × (1-24%)) = 2.58%
Weighted cost for debt ( Weight × Cost )= 1.84%
Weighted cost for zero coupon bond ( Weight × Cost ) = 0.90%
After tax cost of debt = 1.84%+0.90%
=2.74%
