EC

1. Sheridan Company applies overhead on the basis of 200% of direct labor cost. Job No. 305 is charged with $450000 of direct materials costs and $400000 of manufacturing overhead. The total manufacturing costs for Job No. 305 is:

a. $1050000

b. $1300000

c. $850000

d. $1250000

2. Sheridan Company estimates its sales at 260000 units in the first quarter and that sales will increase by 21000 units each quarter over the year. They have, and desire, a 25% ending inventory of finished goods. Each unit sells for $25. 40% of the sales are for cash. 70% of the credit customers pay within the quarter. The remainder is received in the quarter following sale. Cash collections for the third quarter are budgeted at

a. $8403731.

b. $7455500.

c. $4284500.

d. $6191000.

3. ConcordCompany is considering two capital investment proposals. Estimates regarding each project are provided below:

	Project Soup	Project Nuts
Initial investment	$390000	$516000
Annual net income	30000	46000
Net annual cash inflow	110000	146000
Estimated useful life	5 years	6 years
Salvage value	0	0

The company requires a 10% rate of return on all new investments.

	Present Value of an Annuity of 1
Periods	9%	10%	11%	12%
5	3.89	3.791	3.696	3.605
6	4.486	4.355	4.231	4.111

The cash payback period for Project Nuts is

a. 4.88 years.

b. 13.00 years.

c. 6.29 years.

d. 3.53 years.