Lavage Rapide owns and operates a large automatic car wash facility near Montreal. The following table provides estimates concerning the company's costs: Cleaning supplies Electricity Maintenance Fixed Cost per Month $ 1,200 $ 4,100 $ 8,100 $ 2,000 $ 1,400 Rent Cost per Car Washed $ 0.60 $ 0.08 $ 0.30 $ 0.20 Wages and salaries Depreciation Administrative expenses $ 0.04 For example, electricity costs should be $1,200 per month plus $0.08 per car washed. The company expects to wash 8,400 cars August and to collect an average of $6.20 per car washed. The company actually washed 8,500 cars in August. Required: Calculate the company's activity variances for August. Note: Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., ze

Lavage Rapide owns and operates a large automatic car wash facility near Montreal. The following table provides estimates concerning the company's costs: Cleaning supplies Electricity Maintenance Fixed Cost per Month $ 1,200 $ 4,100 $ 8,100 $ 2,000 $ 1,400 Rent Cost per Car Washed $ 0.60 $ 0.08 $ 0.30 $ 0.20 Wages and salaries Depreciation Administrative expenses $ 0.04 For example, electricity costs should be $1,200 per month plus $0.08 per car washed. The company expects to wash 8,400 cars August and to collect an average of $6.20 per car washed. The company actually washed 8,500 cars in August. Required: Calculate the company's activity variances for August. Note: Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., ze

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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The Borstal Company has to choose between two machines that do the same job but have different lives. The two machines have the following costs: Year Machine A Machine B 0 $ 41,000 $ 51,000 1 10,200 8,400 2 10,200 8,400 3 10,200+ replace 8,400 4 8,400 replace These costs are expressed in real terms. a. Suppose you are Borstal's financial manager. If you had to buy one or the other machine and rent it to the production manager for that machine's economic life, what annual rental payment would you have to charge? Assume a 8% real discount rate and ignore taxes. Note: Do not round intermediate calculations. Enter your answers as a positive value rounded to 2 decimal places. b. Which machine should Borstal buy? c. If there is steady 6% per year inflation, what will be the annual rental payment for machine B for the second year? Note: Enter your answer as a positive value rounded to 2 decimal places. a. Machine A a. Machine B b. Which machine should Borstal buy? c. Year 2 rental payment…
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Auto Lavage is a Canadian company that owns and operates a large automatic carwash facility near Quebec. The following table provides data concerning the company's costs: Cleaning supplies Electricity Maintenance Wages and salaries Depreciation Rent Administrative expenses Variable expenses: Total variable expenses Fixed expenses: Fixed Cost per Month Total fixed expenses $1,600 4,900 8,500 2,300 2,000 The company expects to charge customers an average of $6.10 per car washed. Required: Prepare a flexible budget for October assuming either 9,000 or 10,000 cars are washed. AUTO LAVAGE INC. Flexible Budget For the Month Ended October 31 Budgeted Amount Per Unit (per car) Cost per Car Washed $0.99 0.30 8.50 0.68 9,000 Cars Washed 0.07 10,000
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Bridgeport Racers makes bicycles. It has always purchased its bicycle tires from the Cullumber Tires at $26 each but is currently considering making the tires in its own factory. The estimated costs per unit of making the tires are as follows: Direct materials $9 Direct labor $5 Variable manufacturing overhead $8 The company’s fixed expenses would increase by $73,000 per year if managers decided to make the tire.(a1) Calculate total relevant cost to make or buy if the company needs 11,300 tires a year. Make Buy Total relevant cost $enter a dollar amount $enter a dollar amount (a2) Ignoring qualitative factors, if the company needs 11,300 tires a year, should it continue to purchase them from Balyo or begin to produce them internally? The company select an option should not continueshould continue to purchase the tires.
Assume that total sales revenue for 2018 is projected to be $1081764. Assume also the following costs for Shannon's Brewery: Packaged (Cans & Bottles) Kegs Shrinkage/WIP Loss Contract Labor Direct Labor Freight Consumer Advertising Trade Promotion Sales Promotion Salaries & Benefits $150,000 $80,000 $42,000 $9,000 $240,000 $18,000 $31083 $26761 $18,000 $180,000 Compute Shannon's %NMC. Round your answer to the nearest percent. For example, if your computed answer is 99.4% your answer rounds down to 99%. If your computed answer is 99.5% you should round up to 100%. DO NOT INCLUDE THE % SIGN IN YOUR ANSWER.
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