Accounting Help (Serious Inquiry’s only)

This assignment is due Monday Feb 25, must show work, guarantee an A or money back, and know there Accounting very well. Serious Inquiries Only!

  

CHAPTER 26 ASSIGNMENT

Instructions: Complete the problems below. This assignment can be completed in either: Microsoft Excel, Word, or hand-written and scanned in PDF format. I prefer Microsoft Excel or Word but will not dock points for PDF format.

SHOW YOUR WORK AND GET PARTIAL CREDIT FOR WRONG ANSWERS!

PART A. For 1-2, use the information below:

Our company is deciding whether to make or buy a part of its product. The costs of producing 10,000 of these parts are:

Direct Materials 75,000
Direct Labor 45,000
Variable Overhead 15,000
Fixed Overhead 10,000

Instead of making these parts, our company has an opportunity to buy the parts at $14.00 per unit. If our company purchases the parts, all variable costs and one-half of the fixed costs will be eliminated.

1. Prepare an incremental analysis showing whether our company should make or buy the parts.

2. Would the answer be different if producing the units internally would generate additional income of $30,000?

PART B. For 3, use the information below:

One of our company’s product lines had a net loss of $50,000, made up of the following data:

Sales 800,000
Variable Expenses 550,000
Fixed Expenses 300,000

If our company eliminates this product line, $30,000 of fixed costs will remain.

3. Prepare an analysis showing whether our company should eliminate this product line.

PART C. For 4-5, use the information below:

Our company is considering purchasing a new delivery truck for $100,000. The truck has a 5-year useful life. Assume straight-line depreciation and zero salvage value for the truck. This new truck will provide efficiencies in our company’s delivery service and should increase net income by $5,000 each year for 5 years.

4. Compute the annual rate of return

5. Compute the cash payback period

PART D. For 6-8, use the information below:

Our company is considering adding an additional production machine. This machine would cost $1,200,000. It would have an estimated life of 10 years and have no salvage value. This new machine would increase annual cash inflows by $500,000. Annual cash outflows would also increase by $200,000. Our senior management has a required rate of return of 8%.

6.

Calculate the net present value on this project.

7. Should this new project be accepted based on the net present value?

8. Calculate the internal rate of return on the project.

9. Should this new project be accepted based on the internal rate of return?