21. ___Tony Inc. overapplied the MO in the amount of $3,000. When MO is closed,

Question

21. ___Tony Inc. overapplied the MO in the amount of $3,000. When MO is closed, will Cost of Goods Sold be debited or credited?

22. ___When created the COGM statement, how is total manufacturing cost incurred computed?

23. ___The inventory formula used in the production budget goes like this: Sales in units + __________ minus _________= units to produce.

24. ___The present value of a lump sum of $1 to be received in 2 years discounted at 4% is……?

25. ___Name two capital budgeting methods that rely on the time value of money (in other words, present value is calculated).

26. ___At Bob’s Big Burgers, the cook, Danny, is paid at the rate of $15 per hour. Would this be a variable cost, a fixed cost, or a mixed cost?

27. ___What is the criterion (or the event) for Finished Goods to move on to Cost of Goods Sold?

28. ___John pays $4198.10 to receive one cash flow in 3 years of $5,000. What is John’s internal rate of return?

29. ___If Penny has fixed costs of $30,000 and her CM ratio is .4, what is Penny’s breakeven point in revenue?

30. ___Sally pays $14,125.50 to receive a $2500 annuity for 10 years. What is Sally’s internal rate of return?

Explanation / Answer

21) COGS will be credited .

2)Units to be produce = Units sold +ending inventory (units) -Beginning inventory (units)

24)present value = PVF@4%,2 * Future value

                               = .92456 * 1

                             = $ .92456

25)Net present value (NPV) and Profitability index ( PI)

26)Variable cost as it varies with number oh hours worked.

27)when sales is made whether cash is recived or not. (or risk or reward is transfered]

28) Future value =present value (1+r)^3

           5000 = 4198.1 (1+r)^3

          5000 /4198.1 = (1+r)^3

           1.19101 = (1+r)^3

         (1.19101)^1/3 =   (1+r )

           1.05999= 1+r

   r = 1.05999- 1

        = .06 or 6%

29)BEP($)=Fixed cost/CM ratio

               = 30000 / .4

                 = $ 75,000

30)Present value =Future value (1+r)^ 10

            14125.5 = 2500 (1+ r)^10

          14125.5 /2500 = (1+r)^10

             5.6502 = (1+r)^10

            (5.6502)^1/10   = 1+r

             1.1891 = 1+r

           r = 1.1891 -1

          = .1891 or 18.91%

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