Natchez, Inc. is considering the purchase of a new machine costing - 17910

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BA213 – Principles of Accounting III (Managerial Accounting)
Final Assignment
This assignment is your BA213 final as scheduled on the course syllabus. The questions cover the major themes
and casework covered during the term with a focus on chapters 8, 9, 10, 11, and 12.
Due Date
Completed assignment must be turned in no later than the time and date of the final exam is scheduled. Early
submissions are allowed to my mailbox in the Business Department AC2685 or via email
harry.dewolf@mhcc.edu (if you do not receive an email receipt confirmation from me I did not received it).
NOTE: Late submissions will not be accepted. No points will be earned for late submissions.
Point Value
Each question has a maximum point value of 20 points. The entire assignment has a value of 200 points.
Partial credit may be given if I am able to determine by examining your calculations where you made your error.
If no calculation work is provided I will be unable to provide partial credit.
Extra Credit: There are two options for extra credit. You may choose one (1) extra credit question: Question one
is easier and has a value of TEN (10) points or question two which is more challenging and has a value of
TWENTY (25) points. You may submit ONLY one or none at all. Completion of extra credit in NOT mandatory.
Points earned are above and beyond the 200 available for questions 1 - 10.
Submission Format: You may submit your answers handwritten (clearly and neatly) or you may submit using
MS Excel or Word. Include your name, date, class, section, and term. No plastic covers, no paperclips
 Answer all questions as complete and professionally as possible.
 If you use MS Excel to answer any question attach your work to your hardcopy submission.
Group Evaluations
You have been assigned to a second group to work through case studies and problems over the past four weeks.
Now is the time to evaluate yourself and your group members you have worked with since the midterm
assignment. The evaluation form is provided. Be honest and specific with your comments. Provide at least one
narrative comment for each group member – including you. Each student will earn up to 50 points for their group
work participation (100 points for the term). The 50 group participation points are separate from the 200-point
final assignment.
Evaluations are confidential and should not be shared by you and will not be shared by the instructor. There will
be a box available in class on the assignment due date to place your confidential evaluations in. If you submit your
final assignment early do not staple it to your final; simply place in my mailbox.
Final course grades will be loaded to your official transcript (not the class portal) no later than Friday June 14th
I will retain the final exams in my office until the end of the fall 2013 term. If you would like your exam back feel
free to come to my office in the fall or you may include a self-addressed stamped envelope with two(2) stamps
with your final exam submission and I will be happy to mail your scored final exam to you.
* The 2012-13 school year has been very challenging and rewarding for me. Thank you for trusting me with this
part of your education – it has been my honor to hopefully add some small value to your future.
Remember - Anything worth achieving will always be challenging.

BA213 Spring 2013
Final, Version 2 200 Points
Name: ____________________________________ Section _____________
1. Profit Maximizing
Ch08
A company believes it can sell 2,000,000 units of its proposed new bottle stopper at a price
of $16.00 each. If the company desires to make a profit of $3,000,000 on the bottle
stopper, what is the target total cost for each bottle stopper?
$16.00
$14.50
$17.50
$9.67
2. Net Present Value – Comparing Two Options
Ch09
Projects A and B both have an initial outflow of $100,000. Project A will return a cash flow
of $30,000 each year for the next 5 years. Project B will return $40,000 in year 1, $30,000
in year 2, $30,000 in year 3, $30,000 in year 4, and $20,000 in year 5.
Which project will have the higher net present value?
The answer cannot be determined without
knowing the initial investment.
Project A
Project B
The answer cannot be determined without
knowing the required rate of return.
3. Production Budget – Material Cost
Ch10
Bake Time makes and sells baking pans. Each pan uses 0.70 pounds of aluminum.
Budgeted production and sales of pans in units for the next five months is as follows:
June July August September October
Budgeted
production
22,180 21,940 24,940 26,240 23,720
Budgeted
sales
22,400 21,300 24,500 26,700 24,400
The company wants to maintain monthly ending inventories of aluminum equal to 15% of
the following month’s budgeted production needs, and monthly inventories of pans equal
to 20% of the number needed for next month’s sales. The cost of aluminum is $0.85 per
pound. How much is the cost of budgeted material purchases for August?
$14,693
$17,595
$14,869
$14,955
$13,322
None of the
answer choices
are correct.
4. Cash Budget – Accounts Receivable – Cash Flow
Ch10
Jazzy Janitors has found that only 10% of its invoiced amounts are paid in the same month
that the work is completed. Sixty percent are paid in the month after the work is completed
and 30% are paid in the second month after the work is completed. During December
2013, Jazzy Janitors’ invoiced $200,000 to clients. Projected revenues for the first six
months of 2014 are given below:
Month Revenue
January $180,000
February 215,000
March 220,000
April 218,000
May 240,000
June 255,000
What is the projected Accounts Receivable balance at March 31, 2014?
$114,000
$280,500
$222,000
$262,500
$180,000
If you use Excel to answer, please attach to this assignment
Questions 5 – 10 Standard Costs and Variance Analysis
Ch 11
Harris Manufacturing produces white sauce. It uses units as the cost driver for overhead. The
following information was provided concerning its standard cost system for 2014:
Budgeted and Standard Data
Material (standard)
1/4 lb. @ $14 per
pound
Quantity produced (actual) 6,200 units
Labor (standard)
1.4 hrs. @ $16 per
hour
Materials purchased (actual)
1,600 lbs. for
$13.70/pound
Total fixed overhead $84,000 Materials used (AQu ) 1,520 lbs.
Variable overhead $6.50 per unit
Labor worked (actual)
8,740 hrs.
@$15.90/hour
Production (standard) 6,000 units Total overhead $122,000
5. How much the direct material quantity variance for 2014?
Choose if the variance is favorable or unfavorable and then select the amount of the variance.
Favorable
Unfavorable
6. How much the direct material price variance for 2014?
Choose if the variance is favorable or unfavorable and then select the amount of the variance.
Favorable
Unfavorable
$456
$480
$900
$420
$456
$480
$900
$420
Budgeted and Standard Data
Material (standard)
1/4 lb. @ $14 per
pound
Quantity produced (actual) 6,200 units
Labor (standard)
1.4 hrs. @ $16 per
hour
Materials purchased (actual)
1,600 lbs. for
$13.70/pound
Total fixed overhead $84,000 Materials used (AQu ) 1,520 lbs.
Variable overhead $6.50 per unit
Labor worked (actual)
8,740 hrs.
@$15.90/hour
Production (standard) 6,000 units Total overhead $122,000
7. How much the direct labor efficiency variance for 2014?
Choose if the variance is favorable or unfavorable and then select the amount of the variance.
Favorable
Unfavorable
8. How much is the direct labor rate variance for 2014?
Choose if the variance is favorable or unfavorable and then select the amount of the variance.
Favorable
Unfavorable
$874
$86
$960
$5,440
$874
$86
$960
$5,440
Budgeted and Standard Data
Material (standard)
1/4 lb. @ $14 per
pound
Quantity produced (actual) 6,200 units
Labor (standard)
1.4 hrs. @ $16 per
hour
Materials purchased (actual)
1,600 lbs. for
$13.70/pound
Total fixed overhead $84,000 Materials used (AQu ) 1,520 lbs.
Variable overhead $6.50 per unit
Labor worked (actual)
8,740 hrs.
@$15.90/hour
Production (standard) 6,000 units Total overhead $122,000
9. How much is the overhead volume variance for 2014?
Choose if the variance is favorable or unfavorable and then select the amount of the variance.
Favorable
Unfavorable
10. How much is the overhead controllable variance for 2014?
Choose if the variance is favorable or unfavorable and then select the amount of the variance.
Favorable
Unfavorable
$2,300
$2,800
$0
$5,100
$2,300
$2,800
$500
$5,100
Extra Credit:
You may choose to submit one (1) extra credit question; but not both.
Question one is easier and has a value of TEN (10) points.
Or
Question two is more challenging and has a value of TWENTY (25) points
You may submit ONLY one or none at all.
Extra Credit #1
NOPAT – Measuring Income and Invested Capital when Calculating ROI
Ch12
The 2014 income statement for the East Division of Procter Wells Company is as follows:
Sales $1,800,000
Operating expenses 1,380,000
Net operating income 420,000
Interest expense 120,000
Earnings before taxes 300,000
Income tax expense
(40%)
120,000
Net income $ 180,000
This division’s invested capital is $4,000,000.
How much is the East Division’s return on investment?
5.7%
10.5%
6.3%
7.5%
Extra Credit #2
Net Present Value – Depreciation – Income Tax
Ch09
Natchez, Inc. is considering the purchase of a new machine costing $200,000. The
company will incur $5,000 per year in operating expenses but it will allow the company to
earn an additional $100,000 per year in revenues. Natchez expects the machine to provide
future benefits for 3 years and salvage value at the end of the 3-year period to be $10,000.
The company uses straight-line depreciation method. The income tax rate is 30%. If the
required rate of return is 10%, how much is the net present value of this project?
$43,769
$12,629
$20,143
None of these
answer choices
are correct.

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