for B.b, can someone please explain the steps? FALS \' Fixed costs stay the same

Question

for B.b, can someone please explain the steps?

FALS ' Fixed costs stay the same. They do not vary with level of quantity. E 4. An investment cost AED 80,000 with no salvage value, a 5 year useful life, and had an expected annual increase in nelt income 6AED 7.00 Straight line depreciation is used. What is the expecta Straight line depreciation is used. What is the expected return on average investment to the nearest tenth?-17.5 %. 7,000/(AED 80,000/2)-17.5% s tering Corporation has borroed ED 76 0must b rd if two years This AD 5,000 that must be repaid in two years. This AED 75,000 i to be invested in an eight-year project with an estimated annual net cash flow of AED 15,000. The payback period for this investment is: 5Years. 75,000/AED 15,000 5 years PART B: COMPREHENSIVE QUESTIONS: SHOW WORK FOR PARTIAL CREDIT (70%) 6. The following information is from the manufacturing budget and budgeted financial statements of Altman Corp.: (10 Points, 5 ea.) $ 86,000 $102,000 Direct materials inventory, 1/1 Direct materials inventory, 1231 Direct materials budgeted for use during year... Accounts payable to suppliers, 1/1.. Accounts payable to suppliers, 12/31 . $344.000 $54,000 $64,000 a. Refer to the information above. For the vear, budgeted purchases of direct materials amounted to: AED 360,000_ 86,000 + AED 344,000 = AED 102,000 X AED360:000 b. For the year, budgeted cash payments to suppliers amounted to: AED 350,000 54,000+ AED 360,000 - x AED 64,000 X AED 350,000 rla

Explanation / Answer

Solution :

Part B :

b. Calculation of direct materials purchased during the year

Calculation of budgeted cash payments to supplier

Opening Accounts Payable + Material Purchases during the year - Cash payments to supplier = Closing Accounts payable

AED 54,000 + AED 360,000 - X = AED 64,000 ( where X = Budgeted cash payments to supplier)

AED 414,000 - X = AED 64,000

AED 414,000 - AED 64,000 = X

So, X = AED 350,000

there fore, Budgeted cash payments to supplier = AED 350,000

Particulars Amount in $ Direct materials budgeted for use during the year $344,000 Add: Closing direct materials inventory (12/31) $102,000 Total $446,000 Less: Opening direct materials inventory (1/1) $86,000 Direct materials purchased during the year $360,000

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