# Accunting question

Question # 00005620 Posted By: neil2103 Updated on: 12/20/2013 02:07 AM Due on: 12/31/2013
Subject Finance Topic Finance Tutorials:
Question
3. (TCO 6) Yappy Company is considering a capital investment of \$320,000 in additional equipment. The new equipment is expected to have a useful life of 8 years with no salvage value. Depreciation is computed by the straight-line method. During the life of the investment, annual net income and cash inflows are expected to be \$25,000 and \$65,000, respectively. Yappy requires a 10% return on all new investments.

Part (a) Compute each of the following:
1: Payback period.
2: Net present value.
3: Profitability index.
4: Internal rate of return.
5: Accounting rate of return.
(b) Indicate whether the investment should be accepted or rejected. (Points : 30)

4. (TCO 7) The management of Horton Company estimates that credit sales for August, September, October, and November will be \$270,000, \$375,000, \$420,000, and \$240,000, respectively. Experience has shown that collections are made as follows:
In month of sales 25%
In first month after sale 60%
In second month after sales 10%

Determine the collections from customers in October and November. Show all computations. (Points : 30)

5. (TCO 8) Western Company’s budgeted and actual sales for 2009 were:
Product Budgeted Sales Actual Sales
A 10,250 units at \$16.00 per unit 12,130 units at \$15.60 per unit
B 15,560 units at \$12.00 per unit 12,940 units at \$12.40 per unit

Part (a) Calculate the sales volume variance.
Part (b) Calculate the sales price variance.
Part (c) Calculate the total sales variance. (Points : 30)

6. (TCO 9) Mace Company accumulates the following data concerning a mixed cost, using miles as the activity level.
Miles Driven Total Cost
January 10,000 \$15,000
February 8,000 13,500
March 9,000 14,400
April 7,500 12,500

Compute the variable and fixed cost elements using the high-low method. (Points : 30)
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1. ## Solution: Accunting question

Tutorial # 00005419 Posted By: neil2103 Posted on: 12/20/2013 02:11 AM
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