Primare Corporation has provided the following data concerning last month's manufacturing operations

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Primare Corporation has provided the following data concerning last month's manufacturing operations.

 

   Purchases of raw materials $ 30,000 Indirect materials included in manufacturing overhead $ 5,000 Direct labor $ 58,000 Manufacturing overhead applied to work in process $ 87,000 Underapplied overhead $ 4,000 

Inventories Beginning Ending Raw materials $ 12,000 $ 18,000 Work in process $ 56,000 $ 65,000 Finished goods $ 35,000 $ 42,000 

 

Required:

1. Show schedule of cost of goods manufactured for the month.

2. Show schedule of cost of goods sold for the month. Assume the underapplied or overapplied overhead is closed to Cost of Goods Sold.

 

# Tyson Fields is considering two alternative investments. The cost of each is $100,000. The annual net cash inflows for the five-year investment periods are as follows:

Alternatives

Year A B

1 $20,000 $10,000

2 $30,000 $60,000

3 $40,000 $60,000

4 $40,000 $20,000

5 $30,000 $10,000

 

Required:

a. Calculate the payback period for each alternative

b. Using a discount rate of 10 percent, what is the NPV of each alternative?

c. What is the internal rate of return for each alternative?

d. Calculate the profitability index for each alternative.

 

# both of which reported earnings of $630,000. Without new projects, both firms will

continue to generate earnings of $630,000 in perpetuity. Assume that all earnings are

paid as dividends and that both firms require a return of 11 percent.

a. What is the current PE ratio for each company?

b. Pacific Energy Company has a new project that will generate additional earnings of

$100,000 each year in perpetuity. Calculate the new PE ratio of the company.

c. U.S. Bluechips has a new project that will increase earnings by $200,000 in perpetu

ity. Calculate the new PE ratio of the firm. 

 

# MNC Inc is involved in the manufacturing of watches. The standard and actual figures are as follows:

Standard Actual

Materials quantity 50 units 45 units

Material price per unit AED 1.00 AED 0.80

Labour hours 1000 hrs 900 hrs

Rate per hour AED 0.50 AED 0.40

You are required to (any 3):

a) Calculate material cost variance and show whether it is favourable or unfavourable.

b) Calculate material price variance and show whether it is favourable or unfavourable.

c) Calculate material usage variance and show whether it is favourable or unfavourable.

d) Calculate labour cost variance and show whether it is favourable or unfavourable.

e) Calculate labour rate variance and show whether it is favourable or unfavourable.

 

# Pp 726 Chapter 14 Long-Term Liabilities

If, however, Taft issued the 6 percent bonds at 102, its March 1 entry would be:

Cash [(800,000 x 1.02) + (800,000 x .06 x 2/12)]              824,000

               Bonds Payable                                                                                 800,000

               Premium on Bonds Payable (800,000 x .02)                                   16,000

           Interest Expense                                                                                  8,000

 

Taft would amortize the premium from the date of sale (March 1, 2017), not from the date of the bonds (January 1, 2017). That is, the amortization period is 118 months [120 (10 x 12) minus two months since issuance]. As a result, the premium amortization at July 1, 2017, is $542.37 [($16,000 / $118 x 4].

 

I don't understand how you get 118-months (120 (10 x 12) minus two months? Also, don't understand how you get $542.37 ($16,000 /$118 x 4)? Can you please explain in detail?