User Account

All Pages

What role does depreciation and equipment purchase cost play

Assignment Help Accounting Basics
Reference no: EM131975331

Question - Apex Manufacturing Corporation is considering a significant shift in the mix of products it manufactures. The costs associated with current and proposed production schedules are shown below by category:

Cost per month Present

Proposed Plant depreciation $52,000 $52,000

Equipment depreciation 28,000 30,000

Raw material 276,000 284,000

Direct labor 312,000 334,000

Manufacturing overhead (excludes depreciation) 801,000 818,000

The proposed production will require a one-time purchase of equipment costing $180,000. No change in selling or administrative cost from their present levels is expected.

Required:

1. What is the minimum amount that revenue would have to increase per month to justify the proposed production schedule? Ignore taxes and the time value of money.

2. What role does depreciation and equipment purchase cost play in this decision?

Reference no: EM131975331

Questions Cloud

Determine the number of planes : Question: Given the following forecasted data, determine the number of planes that the company must produce in order to break even
What was the cost of goods manufactured during the year : What was the cost of goods manufactured during the year? What was the cost of goods sold during the year?
What is nino basis before deducting any of the loss : What is Nino's basis before deducting any of the loss? How much does Nino have at risk? How much of the loss is deductible and how much of the loss is suspended
Explain the types of ethical principles to make decisions : Most situations in organizations are complex as a simple solution will not address all the variables involved. Please think about the way in which you approach
What role does depreciation and equipment purchase cost play : Apex Manufacturing Corporation is considering a significant shift in mix of products it manufactures. What role depreciation and equipment purchase cost
What does your team recommend and why : Your firm has experienced continued sales growth that has been in part due to a more relaxed credit policy. All sales are on account.
Compute the residual income for each division : Compute the return on investment (ROI) for each division using the formula stated in terms of margin. Compute the residual income (loss) for each division.
Should the firm call the bond at time zero : A firm has issued an 8% coupon bond that matures at time 1. The bond is callable at par on any coupon date. The firm follows a call policy that minimizes.
Post ideas about the importance of eq : post your ideas about the importance of EQ and what you have learned about it after completing this activity. What advice can you offer others in the class

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Theory of interest - term structure of interest rates

Term Structure of Interest Rates

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd