Smith Industries manufactures a popular interactive stuffed animal for children that requires two computer chips inside each toy. The company pays S3 for each computer chip. To help to guard against stockouts of the computer chip, Beckett Industries has a policy that states that the ending inventory of computer chips should be at least 2596 of the following month's production needs. The production schedule for the first four months of the year is as follows:

Stuffed animals to be produced
January 5,600
February 4,200
March 4,800
April 4,500

Required:
Prepare a direct materials budget for the first quarter that shows both the number of computer chips needed and the dollar amount of the purchases in the budget. Prepare the direct materials budget by first calculating the total quantity needed, then complete the budget.

Shrieves casting company is considering adding a new line to its product mix, and the capital budgeting analysis is being conducted by sidney johnson, a recently graduated mba. the production line would be set up in unused space in the main plant. the machinery’s invoice price would be approximately $200,000, another $10,000 in shipping charges would be required, and it would cost an additional $30,000 to install the equipment. the machinery has an economic life of 4 years, and shrieves has obtained a special tax ruling that places the equipment in the macrs 3-year class. the machinery is expected to have a salvage value of $25,000 after 4 years of use. the new line would generate incremental sales of 1,250 units per year for 4 years at an incremental cost of $100 per unit in the first year, excluding depreciation. each unit can be sold for $200 in the first year. the sales price and cost are both expected to increase by 3% per year due to inflation. further, to handle the new line, the firm’s net working capital would have to increase by an amount equal to 12% of sales revenues. the firm’s tax rate is 40%, and its overall weighted average cost of capital, which is the risk-adjusted cost of capital for an average project (r), is 10%. define “incremental cash flow.” (1) should you subtract interest expense or dividends when calculating project cash flow?

Principals are an administration career

Jessica wants to plan where she will place furniture in her room, so she has drawn a scale model of her room in order to begin planning. the scale model is 11 inches long and 8.5 inches wide. jessica notices that the door to her room takes up 1.75 inches on the right-side wall of her room, and she realizes that she cannot place any furniture in the area that the door turns through when it is opened.