Stephens Marine Repair is trying to establish the standard labor cost of a typical water- cooling...
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Stephens Marine Repair is trying to establish the standard labor cost of a typical water- cooling pump repair. The following data have been collected from time and motion studies conducted over the past month. Required Actual time spent on pump repair Hourly wage rate Payroll taxes Onsite setup and downtime Final adjustments and testing Fringe benefits 1.75 hours $24.00 10% of wage rate 5% of actual labor time 10% of actual labor time 20% of wage rate (a) Determine the standard direct labor hours per pump repair (b) Determine the standard direct labor hourly rate. (c) Determine the standard direct labor cost per pump repair. (d) If a pump repair took 1.75 hours at the standard hourly rate, what was the direct labor quantity variance? Question #5 Idaho Farm Services Company has received two proposals for a new General-Purpose Wheat Harvester. Information provided for each harvester is as follows: Master Cutter Master Cutter Capital investment Model 440 $375,000 Annual cash flows $110,000 Estimated useful life 10 years Model 480 $625,000 $245,000 10 years Idaho Farm uses a discount rate of 9% to evaluate both projects. Note: Factor for the Present Value of an Ordinary Annuity 10 years @9% = 6.41766 Instructions (a) Calculate the net present value of both models. (b) Calculate the profitability index for each model. (c) Which project should Idaho Farm Services accept? (d) What might be some qualitative" factors to consider? Stephens Marine Repair is trying to establish the standard labor cost of a typical water- cooling pump repair. The following data have been collected from time and motion studies conducted over the past month. Required Actual time spent on pump repair Hourly wage rate Payroll taxes Onsite setup and downtime Final adjustments and testing Fringe benefits 1.75 hours $24.00 10% of wage rate 5% of actual labor time 10% of actual labor time 20% of wage rate (a) Determine the standard direct labor hours per pump repair (b) Determine the standard direct labor hourly rate. (c) Determine the standard direct labor cost per pump repair. (d) If a pump repair took 1.75 hours at the standard hourly rate, what was the direct labor quantity variance? Question #5 Idaho Farm Services Company has received two proposals for a new General-Purpose Wheat Harvester. Information provided for each harvester is as follows: Master Cutter Master Cutter Capital investment Model 440 $375,000 Annual cash flows $110,000 Estimated useful life 10 years Model 480 $625,000 $245,000 10 years Idaho Farm uses a discount rate of 9% to evaluate both projects. Note: Factor for the Present Value of an Ordinary Annuity 10 years @9% = 6.41766 Instructions (a) Calculate the net present value of both models. (b) Calculate the profitability index for each model. (c) Which project should Idaho Farm Services accept? (d) What might be some qualitative" factors to consider?
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Related Book For
Accounting Principles
ISBN: 978-0470533475
9th Edition
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
Posted Date:
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