Question
I need help WITH STEPS / FORMULAS to complete the following types of accounting questions. Please Show Work. _____________________________________________________________________________________________ 1. Falcon Inc. manufactures Product B,
I need help WITH STEPS / FORMULAS to complete the following types of accounting questions. Please Show Work.
_____________________________________________________________________________________________
1. Falcon Inc. manufactures Product B, incurring variable costs of $15.00 per unit and fixed costs of $70,000. Carrigan desires a profit equal to a 12% rate of return on assets, $785,000 of assets are devoted to producing Product B, and 100,000 units are expected to be produced and sold.
(a) Compute the markup percentage, using the total cost concept. Round to the nearest whole number.
Markup percentage: %
(b) Compute the selling price of Product B. Round to two decimal places.
$
2.
Goshawks Co. produces an automotive product and incurs total manufacturing costs of $2,600,000 in the production of 80,000 units. The company desires to earn a profit equal to a 12% rate of return on assets. Goshawks employs $960,000 of assets to manufacture the product. Total selling and administrative expenses are $105,000.
(a) Calculate the markup percentage, using the product cost concept. Round to one decimal place.
Markup percentage: %
(b) Compute the price of the automotive product. Round to two decimal places.
$
3.
Yakking Co. manufactures mobile cellular equipment and develops a price for the product by using a variable cost concept. Yakking incurs variable costs of $1,900,000 in the production of 100,000 units. Fixed costs total $50,000. The company employs $4,725,000 of assets and wishes to earn a profit equal to a 10% rate of return on assets.
(a) Compute a markup percentage based on variable cost. Round to one decimal place.
Markup percentage: %
(b) Determine a selling price. Round to two decimal places.
$
4. Determine the average rate of return for a project that is estimated to yield total income of $400,000 over four years, cost $720,000, and has a $30,000 residual value. Round the answer to one decimal place.
5. Carillion Company is considering the disposal of equipment that is no longer needed for operations. The equipment originally cost $600,000 and accumulated depreciation to date totals $460,000. An offer has been received to lease the machine for its remaining useful life for a total of $290,000, after which the equipment will have no salvage value. The repair, insurance, and property tax expenses during the period of the lease are estimated at $75,800. Alternatively, the equipment can be sold through a broker for $230,000 less a 10% commission. Prepare a differential analysis report, dated June 15 of the current year, on whether the equipment should be leased or sold.
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