2024 – 1 Hayek Corporation uses the FIFO method in its process costing The following data

1. 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          $91,332                                  $81,864                       Equivalent units of production for August     7,740                                 7,580

 

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?

 

 

2.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 company’s only product sells for $258 per unit.

 

What is the net operating income?

 

 

3. (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.

 

What is the simple rate of return on the investment to the nearest tenth of a percent?

 

 

4. Brodigan Corporation has provided the following information concerning a capital budgeting project:

 

Investment required in equipment $450,000

Net annual operating cash inflow $220,000

Tax rate 30%

After-tax discount rate 12%

 

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.

 

What is the net present value of the project?

 

 

SHOW THE WORK!!!