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SOLMAN

This document provides the solutions to several accounting problems. It calculates the present value of a note payable for a machine purchased for $804,529 with 8 annual $17,500 payments. It also provides the unit product cost of $625 for an item with $400 in direct materials, $75 in direct labor, $25 in variable overhead, and $125 in fixed overhead allocated based on total production of 100,000 units and total fixed overhead of $12,500,000.

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Lucas Bantiling
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28 views

SOLMAN

This document provides the solutions to several accounting problems. It calculates the present value of a note payable for a machine purchased for $804,529 with 8 annual $17,500 payments. It also provides the unit product cost of $625 for an item with $400 in direct materials, $75 in direct labor, $25 in variable overhead, and $125 in fixed overhead allocated based on total production of 100,000 units and total fixed overhead of $12,500,000.

Uploaded by

Lucas Bantiling
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Solution Manual:

DIFFICULT: No. 1

Present value of note payable


Future cash flow (140k/8)
17,500
Multiply by: PV of ordinary
annuity of Ᵽ1 @8%, n=8
5.746638
Initial cost of machine
100,566
Multiply by: 8 annual
payments 8
Purchase price of machine
804,529
Present value of note payable
Future cash flow (140k/8)
17,500
Multiply by: PV of ordinary
annuity of Ᵽ1 @8%, n=8
5.746638
Initial cost of machine
100,566
Multiply by: 8 annual
payments 8
Purchase price of machine
804,529

MODERATE: B. 10,000

DIFFICULT: a. 4,280,000

DIFFICULT: a 5,180
MODERATE: a. 625
Direct materials P400
Direct labor 75
Variable overhead 25
Fixed overhead (P12,500,000/100,000) 125
Unit product cost P625

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