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question 6

Timely Inc. produces luxury bags. The budgeted sales and production for the next three months are

as follows

july. august september

Sales, in units 1,115. 1229. 1302

Production. in units 1.218. 1324 1455

Each bag requires 4 direct labor hours (paid at a rate of $11 per hour). The variable manufacturing overhead is applied at a rate of $7 per direct labor hour.

What is the total budgeted variable manufacturing overhead cost in September?

question 7

Inve Co. is considering investment in a new production method. The cost savings from the new method would result in an annual increase in cash flow of $16,575. The method will be used for 5 years, and the salvage value is estimated to be $5,741. NPV of the project is computed to be $5,384.

If the cost of capital is 10%. what is the upfront investment required for adopting the new

production method?

Question 8

Groupie Inc. has a standard of 7 hours of direct labor per unit, with the wage standard of $10 per hour. In May, Groupie Inc. budgeted to produce 621 units but actually produced 1,578 units, paying their employees $13 per hour. The direct labor efficiency variance was favorable $2,579.

For how many hours did employees work in May in total?

question 9

Chair Inc. manufactures chairs. The budgeted sales and production for the next three months are as fOllows

July. August September

Sales, in units. 1,166. 1,269. 1,340

Production, in units 1,300. 1,326. 1,449

Each chair requires 3 hours of unskilled labor (paid $14 per hour) and 6 hours of skilled labor (paid $26 per hour.

What is the total budgeted direct labor cost in August?

question 10

Expand Inc. plans to buy new equioment at a cost of $300.000 with useful life of 8 vears. This equipment will allow Expand to generate additional cash flow of $25,163 per year or, in terms of additional accounting income, $10,451 per year.

What is the salvage value of this equipment?

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