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| Current (No Automation) | Proposed (Automation) | ||||
| 78000 | 110000 | ||||
| Per unit | Total | Per unit | Total | Difference | |
| Sales Revenue | $91 | $7,098,000 | $98 | $10,780,000 | $3,682,000 |
| Variable cost | |||||
| Direct Material | $17 | $1,496,000 | $20 | $2,580,000 | $1,084,000 |
| Direct Labour (25*80%) | $25 | $2,200,000 | $20 | $2,580,000 | $380,000 |
| Variable Manufacturing OH | $9 | $792,000 | $9 | $1,161,000 | $369,000 |
| Less: Total Variable maufacturing cost | $51 | $4,488,000 | $49 | $6,321,000 | $1,833,000 |
| Contribution Margin | $40 | $2,610,000 | $49 | $4,459,000 | $1,849,000 |
| Less: Fixed Manufacturing costs | $1,120,000 | $2,220,000 | $1,100,000 | ||
| Net opeating Income | $1,490,000 | $2,239,000 | $749,000 | ||
| Less: Depreciation (11250000-1050000)/9 | $1,133,333 | $1,133,333 | |||
| Net Accounting Income | $1,490,000 | $1,105,667 | -$384,333 | ||
| Computation of Present Value | |
| Annual Net Operating Income | $749,000 |
| Cumm PVAF @ 15% for 10 Year | 5.8474 |
| PV of Annual Cash Flow (C=AXB) | $4,379,702.60 |
| PV of Residual Value (1050000X0.2472) | 259560 |
| Presetn Value of Cash Inflow ( C+D) | $4,639,262.60 |
| Less: Initial Investment | 11250000 |
| NPV | -$6,610,737.40 |
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Required information [The following information applies to the questions displayed below.] Beacon Company is considering automating...
The following information applies to the questions displayed below) Beacon Company is considering automating its production...
The following information applies to the questions displayed below) Beacon Company is considering automating its production facility. The initial investment in automation would be $8.23 million, and the equipment has a useful life of 7 years with a residual value of $1,090,000. The company will use straight line depreciation. Beacon could expect a production increase of 47,000 units per year and a reduction of 20 percent in the labor cost per unit. Current (no automation) 82,000 units Per Proposed (automation)...
Beacon Company is considering automating its production facility. The initial investment in automation would be $8.26million,...
Beacon Company is considering automating its production facility. The initial investment in automation would be $8.26million, and the equipment has a useful life of 7 years with a residual value of $1,190,000. The company will use straight-line depreciation. Beacon could expect a production increase of 41,000 units per year and a reduction of 20 percent in the labor cost per unit. Current (no automation) Proposed (automation) 78,000 units 119,000 units Production and sales volume Per Unit Total Per Unit Total...
B B complete and correct. Current (no automation) 82,000 units Per Unit Total s 7.790,000 Proposed (automation) 1...
B B complete and correct. Current (no automation) 82,000 units Per Unit Total s 7.790,000 Proposed (automation) 129,000 units Per Unit Total S 95 $12,255,000 Production and Sales Volume Sales revenue Variable costs Direct materials Direct labor Variable manufacturing overhead Total variable manufacturing costs Contribution margin Fixed manufacturing costs Net operating income No 4.182,000 1 080.000 3,102.000 6.966.000 $ 2.200,000 $ 4.766,000 $ < Prex 10 of 15 HE Next > search 2. Determine the project's accounting rate of return....
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Required information The following information applies to the questions displayed below.] Preble Company manufactures one product. Its variable manufacturing overhead is applied to production based on direct labor-hours and its standard cost card per unit is as follows Direct materials: 5 pounds at $7 per pound Direct labor: 3 hours at $16 per hour 48 Variable overhead: 3 hours at $4 12 per hour $ 95 Total standard cost per unit The planning budget for...
! Required information [The following information applies to the questions displayed below.] A company is considering...
! Required information [The following information applies to the questions displayed below.] A company is considering investing in a new machine that requires a cash payment of $47,947 today. The machine will generate annual cash flows of $21,000 for the next three years. Assume the company uses an 8% discount rate. Compute the net present value of this investment. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.) Chart...
Check my work Required information The following information applies to the questions displayed below.] Martinez Company's...
Check my work Required information The following information applies to the questions displayed below.] Martinez Company's relevant range of production is 7,500 units to 12,500 units. When it produces and sells 10,000 units, its average costs per unit are as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Fixed selling expense Fixed administrative expense Sales commissions Variable administrative expense Average Cost Per Unit $6.10 $3.60 $1.40 $4.00 $3.10 $2.10 $1.10 $0.55 12. If 12,500 units are produced,...
Check my work Required information (The following information applies to the questions displayed below.) Martinez Company's...
Check my work Required information (The following information applies to the questions displayed below.) Martinez Company's relevant range of production is 7.500 units to 12,500 units. When it produces and sells 10,000 units, its average costs per unit are as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Fixed selling expense Fixed administrative expense Sales commissions Variable administrative expense Average Cost Per Unit $6.10 $3.60 $1.40 $4.00 $3.10 $2.10 $1.10 $0.55 5. If 8,000 units are produced...
Required information The following information applies to the questions displayed below) Martinez Company's relevant range of...
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Required information [The following information applies to the questions displayed below) A company is investing in a solar panel system to reduce its electricity costs. The system requires a ay. The system is expected to generate net cash flows of $10,615 per year for the next 35 years. The investment has zero salvage value. The company requires an 7% return on its investments. 1-a. Compute the net present value of this investment (PV of $1. FV of $1, PVA of...
The following information applies to the questions displayed below) Beacon Company is considering automating its production facility. The initial investment in automation would be $8.23 million, and the equipment has a useful life of 7 years with a residual value of $1,090,000. The company will use straight line depreciation. Beacon could expect a production increase of 47,000 units per year and a reduction of 20 percent in the labor cost per unit. Current (no automation) 82,000 units Per Proposed (automation)...
B B complete and correct. Current (no automation) 82,000 units Per Unit Total s 7.790,000 Proposed (automation) 129,000 units Per Unit Total S 95 $12,255,000 Production and Sales Volume Sales revenue Variable costs Direct materials Direct labor Variable manufacturing overhead Total variable manufacturing costs Contribution margin Fixed manufacturing costs Net operating income No 4.182,000 1 080.000 3,102.000 6.966.000 $ 2.200,000 $ 4.766,000 $ < Prex 10 of 15 HE Next > search 2. Determine the project's accounting rate of return....
this is a multi-part
question
Required information The following information applies to the questions displayed below.] Preble Company manufactures one product. Its variable manufacturing overhead is applied to production based on direct labor-hours and its standard cost card per unit is as follows Direct materials: 5 pounds at $7 per pound Direct labor: 3 hours at $16 per hour 48 Variable overhead: 3 hours at $4 12 per hour $ 95 Total standard cost per unit The planning budget for...
! Required information [The following information applies to the questions displayed below.] A company is considering investing in a new machine that requires a cash payment of $47,947 today. The machine will generate annual cash flows of $21,000 for the next three years. Assume the company uses an 8% discount rate. Compute the net present value of this investment. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.) Chart...
Check my work Required information The following information applies to the questions displayed below.] Martinez Company's relevant range of production is 7,500 units to 12,500 units. When it produces and sells 10,000 units, its average costs per unit are as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Fixed selling expense Fixed administrative expense Sales commissions Variable administrative expense Average Cost Per Unit $6.10 $3.60 $1.40 $4.00 $3.10 $2.10 $1.10 $0.55 12. If 12,500 units are produced,...
Check my work Required information (The following information applies to the questions displayed below.) Martinez Company's relevant range of production is 7.500 units to 12,500 units. When it produces and sells 10,000 units, its average costs per unit are as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Fixed selling expense Fixed administrative expense Sales commissions Variable administrative expense Average Cost Per Unit $6.10 $3.60 $1.40 $4.00 $3.10 $2.10 $1.10 $0.55 5. If 8,000 units are produced...
Required information The following information applies to the questions displayed below) Martinez Company's relevant range of production is 7,500 units to 12.500 units. When it produces and sells 10,000 units, its average costs per unit are as follows Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Fixed selling expense Fixed adsinistrative expense Sales commissions Variable administrative expense Average Cost Per Unit $5.50 $3.00 $1.se $4.00 $2.50 $2.00 $1.00 $0.50 11. 8.000 units are produced, what is the total...
Required information [The following information applies to the questions displayed below.] Upstate Mechanical, Inc. has been producing two bearings, components 179 and B81, for use in production. Data regarding these two components follow. 179 2.5 B81 3.0 $ 2.25 4.00 $ 3.75 4.50 Machine hours required per unit Standard cost per unit: Direct material Direct labor Manufacturing overhead Variable Fixed Total 2.00 3.75 $12.00 2.25 4.50 $15.00 "Variable manufacturing overhead is applied on the basis of direct-labor hours. "Fixed manufacturing...
Required information [The following information applies to the questions displayed below) A company is investing in a solar panel system to reduce its electricity costs. The system requires a ay. The system is expected to generate net cash flows of $10,615 per year for the next 35 years. The investment has zero salvage value. The company requires an 7% return on its investments. 1-a. Compute the net present value of this investment (PV of $1. FV of $1, PVA of...
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