Week 8 : Week 8: Final Exam - Final Exam Page: 1 2 3 TCO C 1. (TCO F) Maverick C
ID: 2349455 • Letter: W
Question
Week 8 : Week 8: Final Exam - Final ExamPage: 1 2 3
TCO C
1. (TCO F) Maverick Corporation uses the weighted-average method in its process costing system. Data concerning the first processing department for the most recent month are listed below.
Work in process, beginning:
Units in beginning work-in-process inventory 400
Materials costs $6,900
Conversion costs $2,500
Percent complete for materials 80%
Percent complete for conversion 15%
Units started into production during the month 6,000
Units transferred to the next department during the month 5,600
Materials costs added during the month $112,500
Conversion costs added during the month $210,300
Ending work in process:
Units in ending work-in-process inventory 800
Percentage complete for materials 70%
Percentage complete for conversion 30%
Required: Calculate the equivalent units for materials for the month in the first processing department.
(Points : 25)
2. (TCO B) Heckaman Corporation produces and sells a single product. Data concerning that product appear below. Selling price per unit $230.00
Variable expense per unit $112.70
Fixed expense per month $239,292
Required:
Determine the monthly break-even in unit sales. Show your work! (Points : 25)
3. (TCO G) (Ignore income taxes in this problem.) Five years ago, the City of Paranoya spent $30,000 to purchase a computerized radar system called W.A.S.T.E. (Watching Aliens Sent To Earth). Recently, a sales rep from W.A.S.T.E. Radar Company told the city manager about a new and improved radar system that can be purchased for $50,000. The rep also told the manager that the company would give the city $10,000 in trade on the old system. The new system will last 10 years. The old system will also last that long but only if a $4,000 upgrade is done in 5 years. The manager assembled the following information to use in the decision regarding which system is more desirable:
Old System
New System
Cost of radar system.......................
$30,000
$50,000
Current salvage value......................
$10,000
Explanation / Answer
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3.
Old System New System
Cost of radar system $30,000 $50,000
Current salvage value $10,000 -
Salvage value in 10 years $5,000 $8,000
Annual operating costs $34,000 $29,000
Upgrade required in 5 years $4,000 -
Discount rate 14% 14%
Amount
timing
Discount factor
Present value
Initial investment
-50,000
0
1.0
-50000
Operating costs
--29,000
10
5.22
-151267
Salvage value old system
10000
0
1.0
10000
Salvage value
New system
8000
10
3.71
2158
npv
-189109
Amount
timing
Discount factor
Present value
Old system
upgrade
-4,000
5
1.93
-2077
Annual operating costs
--34,000
10
5.22
-177348
Salvage value
Old system
5000
0
1
5000
npv
-174425
Difference in NPV
14684
Amount
timing
Discount factor
Present value
Initial investment
-50,000
0
1.0
-50000
Operating costs
--29,000
10
5.22
-151267
Salvage value old system
10000
0
1.0
10000
Salvage value
New system
8000
10
3.71
2158
npv
-189109
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