Basic flexible budgeting Centron, Inc., has the following budgeted production costs: |Direct materials |$0.40 per unit | |Direct labor |1.80 per unit | |Variable factory overhead |2.20 per unit | |Fixed factory overhead | |Supervision |$24,000 | |Maintenance |18,000 | |Other |12,000 | The company normally manufactures between 20,000 and 25,000 units each quarter. Should output exceed 25,000 units, maintenance and other fixed costs are expected to increase by $6,000 and $4,500,
3.1.10 Cash Budget The cash budget is “an estimation of the cash inflows and outflows for a business for a specific period of time. Cash budget are used to assess whether the entity has sufficient cash to fulfil regular operations and whether too much cash is being left in unproductive capacities”. (Reference 2) The cash budget is prepared in advance for the first 6 months, and a cash deficit of £20,364 and £2,228 were incurred in January and February. A second-hand bottling plant was purchased in January which cost £420,000. The business required £30,000 cash for working capital.
FI 515 Course Project a) The net cost of the spectrometer would include the original cost of the equipment, the modification costs and the increase in working capital due to having the equipment. Therefore, the net cost would be the $70,000 base costs, plus the $15,000 in modification costs and the $4,000 in capital, which equals $89,000. b) To find the operating cash flows for the three years, we have to find the cost savings after taxes and add the tax of depreciation. To find the cost savings, we have to take the $25,000 that is expected to be saved and reduce it based on a tax of 40%, or $25,000(1-.4), which equals $15,000. The tax on depreciation requires several steps to calculate.
Does Joe have enough in savings to pay for the down payment and all of the closing costs? Solution Plan: Complete the following questions based upon the information in the video and other information provided in the worksheet. 1. Joe figures that with overtime he will average 40 hours a week for 52 weeks a year. If his current wage is $15.00 per hour, how much will he make per year?15*40*52= $31,200.00 annually 2.
* Of the $18400 Rhodes made in mortgage payments last year, $8000 was interest. The income statement lists 2008 interest paid as $32000, which means that there are other debts that required payments of $24000. If possible, accelerating payback on these loans can be very beneficial in the long run. * At industry average levels, wages of a similar business would be approximately $79000, or $11000 lower. * Wages, advertising and rent total %23.1 of sales in the average business, leaving %1.9 of sales for property taxes, interest, utilities, depreciation and other expenses.
In this case, would it be better to use the variable or absorption costing method, and why? In the case of the Polk Company, it would be better to use absorption costing method, because it only includes overhead that is allocated to the 80,600 units sold. The absorption costing method will show lower loss to help keep the confidence of the shareholders in the company. Absorption costing will give a true and fair view of the financial position of the Polk Company. The variable method will count fixed overhead as a period expense, such as fixed overhead for this period is calculated on the basis of the 95,500 units that are produced.
“Its purpose is to help bring back a more fair federal minimum wage, providing America’s lowest-paid workers with a much needed raise” (Congress). The act would raise the federal minimum wage to $10.10 per hour over the next three years. Each yearly increment would increase the rate by 95 cents. After the three years of this act passing, the Secretary of Labor would determine if it was necessary to increase the minimum wage rate based on the Consumer Price Index. For tipped workers, a minimum pay would be seventy percent of the most recent minimum
How many years will it take for $197,000 to grow to be $554,000 if it is invested in an account with a quoted annual interest rate of 8% with monthly compounding of interest? 8. At what quoted annual interest rate must $134,000 be invested so that it will grow to be $459,000 in 15 years if interest is compounded weekly? 9. An annuity pays $24,000 per year for 11 years (first payment one year from today).
The information provided by the “Save-O-Meter” will allow us to set different rates for different times of day. The lowest rates would of course be during the smaller peak consumption hours and the higher rates during the highest instead of one flat rate. Our hypothesis is that this will encourage consumers to utilize energy at off-peak hours, which will in return help smooth out the overall peaks in consumption that strain the power system. Our facilities and infrastructure are built based on peak usage, so smoothing out the peaks will allow us to reduce costs in several
The total sales revenue is the price per ton under contract times 600,000 tons, plus the spot market sales times the spot market price. The sales per year will be: Year 1 $20,400,000 2,000,000 $22,400,000 Year 2 $20,400,000 5,000,000 $25,400,000 Year 3 $20,400,000 8,400,000 $28,800,000 Year 4 $20,400,000 5,600,000 $26,000,000 Contract Spot Total The current aftertax value of the land is an opportunity cost. The initial outlay for net working capital is the percentage required net working capital times Year 1 sales, or: Initial net working capital = .05($22,400,000) = $1,120,000 So, the cash flow today is: Equipment Land NWC Total –$30,000,000 –5,000,000 –1,120,000 –$36,120,000 Now we can calculate the OCF each year. The OCF is: Year 1 Year 2 Year 3 Year 4 $22,400,000 $25,400,000 $28,800,000 $26,000,000 8,450,000 9,425,000 10,530,000 9,620,000 2,500,000 2,500,000 2,500,000 2,500,000 4,290,000 7,350,000 5,250,000 3,750,000 $7,160,000 $6,125,000 $10,520,000 $10,130,000 2,720,800 2,327,500 3,997,600 3,849,400 $4,439,200 $3,797,500 $6,522,400 $6,280,600 4,290,000 7,350,000 5,250,000 3,750,000 $8,729,200 $11,147,500 $11,772,400 $10,030,600 Year 5 Year 6 Sales Var. costs Fixed costs Dep.