Hello if possible i also need these five questions answered as well. i will update price. #7,9,13,16,17.

Student ID: 22039100 Exam: 061400RR - Cost Concepts and Types of Costing When you have completed your exam and reviewed your answers, click Submit Exam. Answers will not be recorded until you hit Submit Exam. If you need to exit before completing the exam, click Cancel Exam. Questions 1 to 20: Select the best answer to each question. Note that a question and its answers may be split across a page break, so be sure that you have seen the entire question and all the answers before choosing an answer. 1. If a company wants to decrease its total quality cost, it would usually be best to spend more money on A. internal and external failure. B. appraisal and external failure. C. prevention and internal failure. D. prevention. 2. At the beginning of December, Sneeden Corporation had $32,000 of raw materials on hand. During the month, the Corporation purchased an additional $71,000 of raw materials. During December, $75,000 of raw materials was requisitioned from the storeroom for use in production. What are the total credits entered in the Raw Materials account during the month of December? A. $75,000 B. $71,000 C. $32,000 D. $103,000 3. Which of the following is classified as a direct labor cost? A. Neither wages of assembly-line workers nor a factory supervisor B. Wages of a factory supervisor but not assembly line workers C. Wages of assembly-line workers but not a factory supervisor D. Both wages of assembly-line workers and a factory supervisor 4. Under the FIFO method, unit costs would A. result from costs in the beginning inventory being added in with current period costs. B. contain some element of cost from the prior period. C. not include costs incurred to complete beginning inventory. D. not contain some elements of cost from the prior period. 5. Supply costs at Chobot Corporation's chain of gyms are listed below: Client-Visits Supply Cost January 12,183 $26,642 February 12,408 $26,853 March 12,232 $26,675 April May June July August September 12,579 12,527 12,608 12,143 12,005 11,944 $26,054 $26,988 $27,064 $26,585 $26,454 $26,393 Management believes that supply cost is a mixed cost that depends on client-visits. Use the high-low method to estimate the variable and fixed components of this cost. Compute the variable component first, rounding off to the nearest whole cent. Then compute the fixed component, rounding off to the nearest whole dollar. These estimates would be closest to which value? A.$1.01 per client-visit; $14,330 per month B.$0.99 per client-visit; $14,607 per month C.$2.18 per client-visit; $26,745 per month D. $1.04 per client-visit; $13,949 per month 6. In describing the cost equation, Y = a + bX, what is "a"? A.The total fixed cost B.The independent variable level of activity C.The variable cost per unit of activity D. The dependent variable cost 7. Dubey Surgical Hospital uses the direct method to allocate service department costs to operating departments. The hospital has two service departments, Telecommunications and Administration, and two operating departments, Surgery and Recovery. Telecommunications Department costs are allocated on the basis of the number of telecommunications ports in departments and Administration Department costs are allocated on the basis of employees. The total Surgery Department cost after service department allocations is closest to which value? A. $478,133 B. $484,059 C. $481,336 D. $473,169 8. Which of the following costs, if expressed on a per unit basis, would be expected to decrease as the level of production and sales increases? A.Variable manufacturing overhead B.Fixed manufacturing overhead C.Sales commissions D. Direct materials 9. Laurie Corporation uses the FIFO method in its process costing system. Department A is the first stage of Laurie Corporation's production process. The following information is available for conversion costs for the month of May for Department A: How many are the equivalent units of production for conversion costs for the month? A.44,000 units B.38,000 units C.36,000 units D. 42,000 units 10. Given the cost formula, Y = $7,000 + $1.80X, what would be the total cost for an activity level of 4,000 units? A. $200 B. $7,200 C. $7,000 D. $14,200 1. Electrical costs at one of Kantola Corporation's factories are listed below: Machine-Hours Electrical Cost February 3,570 $36,405 March 3,580 $36,493 April 3,553 $36,302 May 3,627 $36,833 June 3,625 $36,800 July 3,565 $36,366 August 3,548 $36,237 September 3,542 $36,213 October 3,593 $36,577 Management believes that electrical cost is a mixed cost that depends on machine-hours. Use the highlow method to estimate the variable and fixed components of this cost. Compute the variable component first, rounding off to the nearest whole cent. Then compute the fixed component, rounding off to the nearest whole dollar. What would these estimates be closest to? A. $0.14 per machine-hour; $36,336 per month B. $7.48 per machine-hour; $9,708 per month C. $10.19 per machine-hour; $36,470 per month D. $7.29 per machine-hour; $10,392 per month 2. Adams Corporation makes two products: Product A and Product B. Annual production and sales are 500 units of Product A and 900 units of Product B. The company has traditionally used direct labor-hours as the basis for applying all manufacturing overhead to products. Product A requires 0.4 direct labor-hours per unit and Product B requires 0.5 direct labor-hours per unit. The total estimated overhead for next period is $67,522. The company is considering switching to an activity-based costing system for the purpose of computing unit product costs for external reports. The new activity-based costing system would have three overhead activity cost poolsActivity 1, Activity 2, and General Factorywith estimated overhead costs and expected activity as follows: (Note: The General Factory activity cost pool's costs are allocated on the basis of direct labor-hours.) The overhead cost per unit of Product A under the traditional costing system is closest to which value? A. $41.55 B. $21.94 C. $3.56 D. $5.53 13.Pujol Children's Clinic allocates service department costs to operating departments using the stepdown method. The clinic has two service departments, Administration and Information Technology (IT), and two operating departments, Prenatal and Pediatric. Data concerning those departments are presented in the chart below. Administration costs are allocated first on the basis of employees and IT costs are allocated second on the basis of PCs. The total Pediatric Department cost after allocations is closest to which value? A. $361,823 B. $370,659 C. $328,202 D. $370,790 4. What does overapplied manufacturing overhead mean? A. The estimated manufacturing overhead cost was less than the applied manufacturing overhead cost. B. The estimated manufacturing overhead cost was less than the actual manufacturing overhead cost. C. The applied manufacturing overhead cost was less than the actual manufacturing overhead cost. D. The applied manufacturing overhead cost was greater than the actual manufacturing overhead cost. 15.During October, Beidleman Inc. transferred $52,000 from Work in Process to Finished Goods and recorded a Cost of Goods Sold of $55,000. The journal entries to record these transactions would include a A. credit to Work in Process of $52,000. B. credit to Finished Goods of $52,000. C. credit to Cost of Goods Sold of $55,000. D. debit to Finished Goods of $55,000. 16.The following table presents information about units processed and processing costs incurred during a recent month in the Refining Department of a manufacturing company. The beginning work in process inventory included $11,000 of conversion cost. During the month, the Department incurred an additional $290,000 in conversion costs. Assuming that the company uses the weighted-average cost method, what is the cost per equivalent unit for conversion costs for the month in the Blending Department? Round to the nearest cent. A. $2.53 B. $2.50 C. $2.44 D. $2.55 7. Eagle Company's quality cost report is to be based on the following data: What would be the total prevention cost appearing on the quality cost report? A. $48,000 B. $77,000 C. $86,000 D. $57,000 18.Epolito Corporation incurred $87,000 of actual Manufacturing Overhead costs during September. During the same period, the Manufacturing Overhead applied to Work in Process was $89,000. The journal entry to record the incurrence of the actual Manufacturing Overhead costs would include a A. debit to Work in Process of $89,000. B. credit to Manufacturing Overhead of $87,000. C. debit to Manufacturing Overhead of $87,000. D. credit to Work in Process of $89,000. 9. Job 593 was recently completed. The following data have been recorded on its job cost sheet: The Corporation applies manufacturing overhead on the basis of machine-hours. The predetermined overhead rate is $14 per machine-hour. What amount would be the total cost recorded on the job cost sheet for Job 593? A. $6,705 B. $4,255 C. $3,219 D. $5,249 20. Narver Corporation uses the weighted-average method in its process costing system. Operating data for the Lubricating Department for the month of October appear below: What were the equivalent units for conversion costs in the Lubricating Department for October? A. 47,780 B. 37,100 C. 43,100 D. 44,780 End of exam Final Examination Booklet Managerial Accounting Managerial Accounting EXAMINATION NUMBER: Note: You should complete all lesson exams before you take the final exam. Complete the following exam by answering the questions and compiling your answers into a word-processing document. When you're ready to submit your answers, refer to the instructions at the end of your exam booklet. Be certain to indicate the proper question number before each of your answers. Remember to show your work if an answer requires a mathematical solution. Answer each of the following 20 questions. Each answer is worth 5 points. Question 1: At an activity level of 8,800 units, Pember Corporation's total variable cost is $146,520 and its total fixed cost is $219,296. For the activity level of 8,900 units, compute the following values. Required: A. The total variable cost B. The total cost C. The average variable cost per unit D. The average fixed cost per unit E. The average total cost per unit Note: Assume that the activity level is within the relevant range. Question 2: Job 397 was recently completed. The following data have been recorded on its job cost sheet E x a m i n a t i 1 Direct materials .......................................$59,400 Direct labor-hours....................................1,254 DLHs Direct labor wage rate ..............................$11 per DLH Number of units completed ......................3,300 units The company applies manufacturing overhead on the basis of direct labor-hours. The predetermined overhead rate is $37 per direct labor-hour. Required: What is the unit product cost that would appear on the job cost sheet for this job? Question 3: Carver Inc. uses the weighted-average method in its process costing system. The following data concern the operations of the company's first processing department for a recent month. Work in process, beginning: Units in process................................................700 Percent complete with respect to materials .......50% Percent complete with respect to conversion .....40% Units started into production during the month ..........................................23,000 Work in process, ending: Units in process................................................700 Percent complete with respect to materials .......50% Percent complete with respect to conversion .....40% Required: Using the wieghted-average method, what are the equivalent units of production for materials and for converison costs? 2 Final Examination Question 4: Hayek Corporation uses the FIFO method in its process costing. The following data concern the company's Mixing Department for the month of August. Materials Conversion Work in process, August 1 $31,734 $30,320 Cost added to production in the Mixing Department during August Equivalent units of production for August $91,332 7,740 $81,864 7,580 Required: What are the cost per equivalent unit for materials and the cost per equivalent for conversion for the Mixing Department for August using the FIFO method? Question 5: Maddaloni International, Inc. produces and sells a single product. The product sells for $160.00 per unit and its variable expense is $46.40 per unit. The company's monthly fixed expense is $219,248. Required: What is the monthly break-even in total dollar sales? Question 6: Mitchel Corporation manufactures a single product. Last year, variable costing net operating income was $55,000. The fixed manufacturing overhead costs released from inventory under absorption costing amounted to $24,000. Required: What is the absorption costing net operating income from last year? Final Examination 3 Question 7: Calder Corporation manufactures and sells one product. The following information pertains to the company's first year of operations: Variable costs per unit: Direct Materials $92 Fixed costs per year: Direct Labor $720,000 Fixed manufacturing overhead $3,264,000 Fixed selling and administrative $1,935,000 The company does not have any variable manufacturing overhead costs or variable selling and administrative costs. During its first year of operations, the company produced 48,000 units and sold 45,000 units. The com- pany's only product sells for $258 per unit. Required: What is the net operating income? Question 8: Mouret Corporation uses the following activity rates from its activity-based costing to assign overhead costs to products. Activity Cost Pools Activity Rate Setting up batches $92.68 per batch Processing customer orders $95.08 per customer order Assembling products $3.41 per assembly hour Last year, Product N79A required 28 batches, 6 customer orders, and 712 assembly hours. Required: How much total overhead cost would be assigned to Product N79A using the company's activity-based costing system? 4 Final Examination Question 9: The manufacturing overhead budget of Paparella Corporation is based on budgeted direct labor-hours. The November direct labor budget indicates that 6,000 direct labor-hours will be required in that month. The variable overhead rate is $2.00 per direct labor-hour. The com- pany's budgeted fixed manufacturing overhead is $79,200 per month, which includes depreciation of $21,000. All other fixed manufacturing overhead costs represent current cash flows. Required: A. Determine the cash disbursements for manufacturing overhead for November. B. Determine the predetermined overhead rate for November. Question 10: Sund Corporation bases its budgets on the activity measure \"customers served.\" During April, the company plans to serve 38,000 customers. The company has provided the following data concerning the formulas it uses in its budgeting: Fixed element per month Revenue Wages and salaries Supplies Insurance Miscellaneous expense Required: $25,000 $0 $6,200 $2,500 Variable element per month $2.10 $0.50 $0.30 $0.00 $0.40 Prepare the company's planning budget for April. What is the net operating income? Final Examination 5 Question 11: Shawl Corporation's variable overhead is applied on the basis of direct labor-hours. The standard cost card for product F02E specifies 5.5 direct labor-hours per unit of F02E. The standard variable overhead rate is $6.80 per direct labor-hour. During the most recent month, 1,560 units of product F02E were made and 8,700 direct labor- hours were worked. The actual variable overhead incurred was $52,635. Required: A. What was the variable overhead rate variance for the month? B. What was the variable overhead efficiency variance for the month? Question 12: Kingdon Corporation's manufacturing overhead includes $7.10 per machine-hour for variable manufacturing over- head and $207,000 per period for fixed manufacturing overhead. Required: What is the predetermined overhead rate for the denominator level of activity of 4,600 machine-hours? Question 13: Pinkney Corporation has provided the following data con- cerning its direct labor costs for November: Standard wage rate Standard hours Actual wage rate Actual hours Actual output $12.20 per DLH 5.3 DLHs per unit $11.20 per DLH 39,720 DLHs 7,900 units Required: Show the journal entry to record the incurrence of direct labor costs 6 Final Examination Question 14: Iba Industries is a division of a major corporation. The following data are for the latest year of operations: Sales . . . . . . . . . . . . . . . . . . . . . . . . . . $5,820,000 Net operating income . . . . . . . . . . . . . . $436,500 Avergae operating assets . . . . . . . . . . . $2,000,000 The company's minimum required rate of return . . . . . . . . . . . . . 18% Required: What is the division's residual income? Question 15: Tullius Corporation has received a request for a special order of 8,000 units of product C64 for $50.00 each. The normal selling price of this product is $53.25 each, but the units would need to be modified slightly for the cus- tomer. The normal unit product cost of product C64 is computed as follows: Direct materials $18.10 Direct labor Variable manufacturing overhead Fixed manufacturing overhead Unit product cost 7.40 5.20 4.80 $35.50 Direct labor is a variable cost. The special order would have no effect on the company's total fixed manufactur- ing overhead costs. The customer would like some modifications made to product C64 that would increase the variable costs by $5.00 per unit and that would require a one-time investment of $43,000 in special molds that would have no salvage value. This special order would have no effect on the company's other sales. The company has ample spare capacity for producing the special order. Required: How much is the \"effect\" (incremental net operating income) on the company's total net operating income through accepting the special order? Final Examination 7 Question 16: (Ignore income taxes in this problem.) Hinck Corporation is investigating automating a process by purchasing a new machine for $520,000 that would have an 8 year useful life and no salvage value. By automating the process, the company would save $134,000 per year in cash operating costs. The company's current equipment would be sold for scrap now, yielding $22,000. The annual depreciation on the new machine would be $65,000. Required: What is the simple rate of return on the investment to the nearest tenth of a percent? Question 17: (Ignore income taxes in this problem.) Schaad Corporation has entered into an 8 year lease for a piece of equipment. The annual payment under the lease will be $2,500, with payments being made at the beginning of each year. Required: If the discount rate is 14%, what is the present value of the lease payments? Question 18: Brodigan Corporation has provided the following information concerning a capital budgeting project: Investment required in equipment Net annual operating cash inflow Tax rate After-tax discount rate 8 $450,000 $220,000 30% 12% Final Examination The expected life of the project and the equipment is 3 years and the equipment has zero salvage value. The company uses straight-line depreciation on all equipment and the depreciation expense on the equipment would be $150,000 per year. Assume cash flows occur at the end of the year except for the initial investments. The company takes income taxes into account in its capital budgeting. The net annual operating cash inflow is the difference between the incremental sales revenue and incremental cash operating expenses. Required: What is the net present value of the project? Question 19: Dukas Corporation's net cash provided by operating activities was $218,000; its net income was $203,000; its capital expenditures were $146,000; and its cash dividends were $49,000. Required: What is the company's free cash flow? Final Examination 9 Question 20: Mihok Corporation has provided the following financial data: Year 2 Year 1 Stockholders' equity: 10 Final Examination Common stock, $3 par value . . . . . . . . . . . . . . . .$300,000 Additional paid-in capitalcommon stock . . . . . . .100,000 Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . .375,000 Total stockholders' equity . . . . . . . . . . . . . . . . . . . .$775,000 $300,000 100,000 370,000 $770,000 Income Statement For the Year Ended December 31, Year 2 Sales . . . . . . . . . . . . . . . . . . . . . . . . . .$1,380,000 Cost of goods sold . . . . . . . . . . . . . . . . . . .780,000 Gross margin . . . . . . . . . . . . . . . . . . . . . .600,000 Operating expenses . . . . . . . . . . . . . . . . . .567,714 Net operating income . . . . . . . . . . . . . . . . .32,286 Interest expense . . . . . . . . . . . . . . . . . . . . . 18,000 Net income before taxes . . . . . . . . . . . . . . .14,286 Income taxes (30%) . . . . . . . . . . . . . . . . . . 4,286 Net income . . . . . . . . . . . . . . . . . . . . . . . .$10,000 Dividends on common stock during Year 2 totaled $5,000. The market price of common stock at the end of Year 2 was $0.97 per share. Required: A. What is the company's earnings per share for Year 2? B. What is the company's price-earnings ratio for Year 2? C. What is the company's dividend payout ratio for Year 2? D. What is the company's dividend yield ratio for Year 2? E. What is the company's book value per share at the end of Year 2? 10 Final Examination Submitting Your Assignment You should submit your final exam online. 1. On your computer, save a revised and corrected version of your project. 2. Go to www.pennfoster.edu and log in. 3. Go to My Courses. 4. Click on Take Exam next to the lesson you're working on. 5. Enter your e-mail address in the box provided. (Note: This information is required for online submission.) 6. Attach your file or files as follows: a. Click on the Browse box. b. Locate the file you wish to attach. c. Double-click on the file. d. Click on Upload File. e. If you have more than one file to attach, repeat steps a-d. 7. Click on Submit Files. Be sure to keep a backup copy of your completed assignment. Final Examination 11 Final Examination Booklet Managerial Accounting Managerial Accounting EXAMINATION NUMBER: Note: You should complete all lesson exams before you take the final exam. Complete the following exam by answering the questions and compiling your answers into a word-processing document. When you're ready to submit your answers, refer to the instructions at the end of your exam booklet. Be certain to indicate the proper question number before each of your answers. Remember to show your work if an answer requires a mathematical solution. Answer each of the following 20 questions. Each answer is worth 5 points. Question 1: At an activity level of 8,800 units, Pember Corporation's total variable cost is $146,520 and its total fixed cost is $219,296. For the activity level of 8,900 units, compute the following values. Required: A. The total variable cost B. The total cost C. The average variable cost per unit D. The average fixed cost per unit E. The average total cost per unit Note: Assume that the activity level is within the relevant range. Question 2: Job 397 was recently completed. The following data have been recorded on its job cost sheet E x a m i n a t i 1 Direct materials .......................................$59,400 Direct labor-hours....................................1,254 DLHs Direct labor wage rate ..............................$11 per DLH Number of units completed ......................3,300 units The company applies manufacturing overhead on the basis of direct labor-hours. The predetermined overhead rate is $37 per direct labor-hour. Required: What is the unit product cost that would appear on the job cost sheet for this job? Question 3: Carver Inc. uses the weighted-average method in its process costing system. The following data concern the operations of the company's first processing department for a recent month. Work in process, beginning: Units in process................................................700 Percent complete with respect to materials .......50% Percent complete with respect to conversion .....40% Units started into production during the month ..........................................23,000 Work in process, ending: Units in process................................................700 Percent complete with respect to materials .......50% Percent complete with respect to conversion .....40% Required: Using the wieghted-average method, what are the equivalent units of production for materials and for converison costs? 2 Final Examination Question 4: Hayek Corporation uses the FIFO method in its process costing. The following data concern the company's Mixing Department for the month of August. Materials Conversion Work in process, August 1 $31,734 $30,320 Cost added to production in the Mixing Department during August Equivalent units of production for August $91,332 7,740 $81,864 7,580 Required: What are the cost per equivalent unit for materials and the cost per equivalent for conversion for the Mixing Department for August using the FIFO method? Question 5: Maddaloni International, Inc. produces and sells a single product. The product sells for $160.00 per unit and its variable expense is $46.40 per unit. The company's monthly fixed expense is $219,248. Required: What is the monthly break-even in total dollar sales? Question 6: Mitchel Corporation manufactures a single product. Last year, variable costing net operating income was $55,000. The fixed manufacturing overhead costs released from inventory under absorption costing amounted to $24,000. Required: What is the absorption costing net operating income from last year? Final Examination 3 Question 7: Calder Corporation manufactures and sells one product. The following information pertains to the company's first year of operations: Variable costs per unit: Direct Materials $92 Fixed costs per year: Direct Labor $720,000 Fixed manufacturing overhead $3,264,000 Fixed selling and administrative $1,935,000 The company does not have any variable manufacturing overhead costs or variable selling and administrative costs. During its first year of operations, the company produced 48,000 units and sold 45,000 units. The com- pany's only product sells for $258 per unit. Required: What is the net operating income? Question 8: Mouret Corporation uses the following activity rates from its activity-based costing to assign overhead costs to products. Activity Cost Pools Activity Rate Setting up batches $92.68 per batch Processing customer orders $95.08 per customer order Assembling products $3.41 per assembly hour Last year, Product N79A required 28 batches, 6 customer orders, and 712 assembly hours. Required: How much total overhead cost would be assigned to Product N79A using the company's activity-based costing system? 4 Final Examination Question 9: The manufacturing overhead budget of Paparella Corporation is based on budgeted direct labor-hours. The November direct labor budget indicates that 6,000 direct labor-hours will be required in that month. The variable overhead rate is $2.00 per direct labor-hour. The com- pany's budgeted fixed manufacturing overhead is $79,200 per month, which includes depreciation of $21,000. All other fixed manufacturing overhead costs represent current cash flows. Required: A. Determine the cash disbursements for manufacturing overhead for November. B. Determine the predetermined overhead rate for November. Question 10: Sund Corporation bases its budgets on the activity measure \"customers served.\" During April, the company plans to serve 38,000 customers. The company has provided the following data concerning the formulas it uses in its budgeting: Fixed element per month Revenue Wages and salaries Supplies Insurance Miscellaneous expense Required: $25,000 $0 $6,200 $2,500 Variable element per month $2.10 $0.50 $0.30 $0.00 $0.40 Prepare the company's planning budget for April. What is the net operating income? Final Examination 5 Question 11: Shawl Corporation's variable overhead is applied on the basis of direct labor-hours. The standard cost card for product F02E specifies 5.5 direct labor-hours per unit of F02E. The standard variable overhead rate is $6.80 per direct labor-hour. During the most recent month, 1,560 units of product F02E were made and 8,700 direct labor- hours were worked. The actual variable overhead incurred was $52,635. Required: A. What was the variable overhead rate variance for the month? B. What was the variable overhead efficiency variance for the month? Question 12: Kingdon Corporation's manufacturing overhead includes $7.10 per machine-hour for variable manufacturing over- head and $207,000 per period for fixed manufacturing overhead. Required: What is the predetermined overhead rate for the denominator level of activity of 4,600 machine-hours? Question 13: Pinkney Corporation has provided the following data con- cerning its direct labor costs for November: Standard wage rate Standard hours Actual wage rate Actual hours Actual output $12.20 per DLH 5.3 DLHs per unit $11.20 per DLH 39,720 DLHs 7,900 units Required: Show the journal entry to record the incurrence of direct labor costs 6 Final Examination Question 14: Iba Industries is a division of a major corporation. The following data are for the latest year of operations: Sales . . . . . . . . . . . . . . . . . . . . . . . . . . $5,820,000 Net operating income . . . . . . . . . . . . . . $436,500 Avergae operating assets . . . . . . . . . . . $2,000,000 The company's minimum required rate of return . . . . . . . . . . . . . 18% Required: What is the division's residual income? Question 15: Tullius Corporation has received a request for a special order of 8,000 units of product C64 for $50.00 each. The normal selling price of this product is $53.25 each, but the units would need to be modified slightly for the cus- tomer. The normal unit product cost of product C64 is computed as follows: Direct materials $18.10 Direct labor Variable manufacturing overhead Fixed manufacturing overhead Unit product cost 7.40 5.20 4.80 $35.50 Direct labor is a variable cost. The special order would have no effect on the company's total fixed manufactur- ing overhead costs. The customer would like some modifications made to product C64 that would increase the variable costs by $5.00 per unit and that would require a one-time investment of $43,000 in special molds that would have no salvage value. This special order would have no effect on the company's other sales. The company has ample spare capacity for producing the special order. Required: How much is the \"effect\" (incremental net operating income) on the company's total net operating income through accepting the special order? Final Examination 7 Question 16: (Ignore income taxes in this problem.) Hinck Corporation is investigating automating a process by purchasing a new machine for $520,000 that would have an 8 year useful life and no salvage value. By automating the process, the company would save $134,000 per year in cash operating costs. The company's current equipment would be sold for scrap now, yielding $22,000. The annual depreciation on the new machine would be $65,000. Required: What is the simple rate of return on the investment to the nearest tenth of a percent? Question 17: (Ignore income taxes in this problem.) Schaad Corporation has entered into an 8 year lease for a piece of equipment. The annual payment under the lease will be $2,500, with payments being made at the beginning of each year. Required: If the discount rate is 14%, what is the present value of the lease payments? Question 18: Brodigan Corporation has provided the following information concerning a capital budgeting project: Investment required in equipment Net annual operating cash inflow Tax rate After-tax discount rate 8 $450,000 $220,000 30% 12% Final Examination The expected life of the project and the equipment is 3 years and the equipment has zero salvage value. The company uses straight-line depreciation on all equipment and the depreciation expense on the equipment would be $150,000 per year. Assume cash flows occur at the end of the year except for the initial investments. The company takes income taxes into account in its capital budgeting. The net annual operating cash inflow is the difference between the incremental sales revenue and incremental cash operating expenses. Required: What is the net present value of the project? Question 19: Dukas Corporation's net cash provided by operating activities was $218,000; its net income was $203,000; its capital expenditures were $146,000; and its cash dividends were $49,000. Required: What is the company's free cash flow? Final Examination 9 Question 20: Mihok Corporation has provided the following financial data: Year 2 Year 1 Stockholders' equity: 10 Final Examination Common stock, $3 par value . . . . . . . . . . . . . . . .$300,000 Additional paid-in capitalcommon stock . . . . . . .100,000 Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . .375,000 Total stockholders' equity . . . . . . . . . . . . . . . . . . . .$775,000 $300,000 100,000 370,000 $770,000 Income Statement For the Year Ended December 31, Year 2 Sales . . . . . . . . . . . . . . . . . . . . . . . . . .$1,380,000 Cost of goods sold . . . . . . . . . . . . . . . . . . .780,000 Gross margin . . . . . . . . . . . . . . . . . . . . . .600,000 Operating expenses . . . . . . . . . . . . . . . . . .567,714 Net operating income . . . . . . . . . . . . . . . . .32,286 Interest expense . . . . . . . . . . . . . . . . . . . . . 18,000 Net income before taxes . . . . . . . . . . . . . . .14,286 Income taxes (30%) . . . . . . . . . . . . . . . . . . 4,286 Net income . . . . . . . . . . . . . . . . . . . . . . . .$10,000 Dividends on common stock during Year 2 totaled $5,000. The market price of common stock at the end of Year 2 was $0.97 per share. Required: A. What is the company's earnings per share for Year 2? B. What is the company's price-earnings ratio for Year 2? C. What is the company's dividend payout ratio for Year 2? D. What is the company's dividend yield ratio for Year 2? E. What is the company's book value per share at the end of Year 2? 10 Final Examination Submitting Your Assignment You should submit your final exam online. 1. On your computer, save a revised and corrected version of your project. 2. Go to www.pennfoster.edu and log in. 3. Go to My Courses. 4. Click on Take Exam next to the lesson you're working on. 5. Enter your e-mail address in the box provided. (Note: This information is required for online submission.) 6. Attach your file or files as follows: a. Click on the Browse box. b. Locate the file you wish to attach. c. Double-click on the file. d. Click on Upload File. e. If you have more than one file to attach, repeat steps a-d. 7. Click on Submit Files. Be sure to keep a backup copy of your completed assignment. Final Examination 11