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,
Compare your company’s profitability ratios with the peer company profitability ratios. 10. Compare the profitability ratios for four competitors. I. Chapter 9 Required 1. Review the earnings per share forecasts.
By contrast, the price elasticity of demand tells you “how much” quantity demanded changes when price changes. It shows the responsiveness of a change in quantity demanded to a change in price. [text: E p. 114; MI p. 114] 2. Why do economists use percentages rather than absolute amounts in measuring the responsiveness of consumers to changes in price? There are two basic reasons.
Levered’s perpetual debt has a market value of $300 million and the required return on its debt is 7%. Levered’s stock sells for $100 per share, and there are 5 million shares outstanding. Unlevered has 8 million shares outstanding worth $90 each. Unlevered has no debt. These firms operate in the Modigliani-Miller world with no taxes.
Terminal value at the end of year 8 is the value at that time of the after-tax net cash flows that the project is expected to provide after that date. (b) [2] What is the net present value of the project if it will require an initial outlay of $10,000? 3. [10] It is January 2010. Mr. Norton owns and operates a small-appliance repair shop.
Add all of the resources below to the Huffman Benefits project. Assign these resources to the appropriate sub-task added in Week Two. Refer to Table 1. Table 1: Resource data. Resource Project Manager Analyst IT Analyst QA Analyst Analyst Designer Developer Wage/hour $100.00 $50.00 $50.00 $50.00 $50.00 $40.00 $30.00 Wage/hour Overbudren $30.00 $15.00 $15.00 $15.00 $15.00 $12.00
QUESTIONS 1. Table 1 contains the complete cash flow analysis based on GP Manufacturing’s basic information. Explain the inputs into 1) the net initial investment outlay at year 0, 2) the depreciation tax savings in each year of the project’s economic life, and 3) the project’s incremental cash flows? 2. What is the project’s NPV?
Income Statement figures for the most recent fiscal year Cost of goods sold Amount | Percentage of total revenue | $47,860,000,000 | 68.50% ($47,860,000,000/$69,865,000,000) | Reference: Consolidated Statements of Operations, Form 10-K, Page 31. Reference: Footnote 3 - Cost of Sales and Selling, General and Administrative Expenses, Form 10-K, Page 35. Reference: Footnote 11 –Inventory, Form 10-K, Page 42. Gross profit Amount | Percentage of total revenue | $22,005,000,000 ($69,865,000,000 - $47,860,000,000) | 31.50% ($22,005,000,000/$69,865,000,000)
To compare our two options, we have compared the cash flow on an after-tax basis. 2. Assumptions We have taken more assumptions in addition to the assumptions listed in the case 1 to support a comparison of NPV on the same dimension. Output. 100,000 units will be required for each year of the project.
The total hours worked in this month were 16,970 and the labour charge was 579,286. The cost of overheads for the department was 944,074. So the total cost for the department was as follows: Labour Cost Overheads Total Department Cost 579,286 + 944,074 = 1,523,360 Total costs of the department were divided by the total number of labour hours to come up with the department wide rate. Total Department Cost Labour Hours DWR 1,523,360 / 16,970 = 89.77 Developing Section Wide Rates The direct labour cost per hour in each section was calculated by dividing the total labour charge incurred the number of hours worked. As shown below: Section Labour Charge Labour Hours Labour Cost Per Hour 1 48,388 / 1,370 = 35.32 2 24,070 / 1,000 = 24.07 3 168,200 / 4,000 = 42.05 4 64,332 / 1,800 = 35.74 5 274,296 / 8,800 = 31.17 Total 579,286 16,970 The overhead cost per hour in each section was calculated by dividing the total overhead cost per section by the number of labour hours.