Question: I need help answering the following problems: Problem 1 - The following information applies to Company A's material cost. Actual Cost: 4,100 lbs. @ $5.07
I need help answering the following problems:
Problem 1 -
The following information applies to Company A's material cost.
Actual Cost: 4,100 lbs. @ $5.07 per lb. = $20,787
Standard Cost: 4,000 lbs. @ $5.00 per lb. = $20,000
Direct materials Cost Variance: $787
Calculate the price and quantity variance.
Problem 2 -
Using the information in Problem 2, complete the journal entry to record the use of materials and any variances.
Problem 3 -
Company A is considering a potential investment. This investment requires a cash outflow of $25,000. The investment is expected to generate equal annual cash flows of $4,500. Calculate the payback period.
Problem 4 -
Company A is evaluating a potential investment. This investment requires a cash outflow of $18,000. The investment is expected to yield equal annual cash flows of $6,500 for 3 years. The Company requires a 10% rate of return. Calculate the net present value of the investment. Should the Company accept this investment opportunity.
Problem 5 -
Describe the four factors, which make capital budgeting decision to be so difficult and risky.
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