Material cost variance and material usage variance


Task1. The Imperial Sugar Company, which is located in Honolulu, Hawaii, has determined that by implementing the new policy in its credit terms, it could potentially raise its NPV from $0.40 per day to $0.50 per day. Suppose a 365 day year. Complete parts a. and b. below.

Question1. Suppose that the company’s annual opportunity cost of capital is 6%. How much of a raise, if any, would the shareholders of the company realize from the implementation of this new credit policy?

Question2. Consider that while the company is making its decision, the opportunity cost increases to 7.25%. Recalculate part a. using the new 7.25% rate.

Task2. On few assumptions which are based on some facts which are to be as standard cost of material for the series of 1000 units. Material 400 tonnes @ $ 80 per ton, actual cost of material for actual output of 50000 units material 19720 tonnes @ $ 77 per ton. You are required just to evaluate material cost variance and material usage variance, material price variance

Task3. A had a capital of $75,000 on 1st April, 2009. He had also goods amounting to $15,000 which he had purchased on credit and the payment had not been made. Determine the value of total assets of business.

Task4. After a period of one month, he came to know that he had suffered a loss of $1,700.He withdrew $ 800 for his personal use. Determine his capital and assets of the business.

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Financial Accounting: Material cost variance and material usage variance
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