1. A motor manufacturer is to develop a new car model to be produced from 1 January2002 for six years until 31 December 2007. The development cost will be §33 million,of which §18 million will be incurred on 1 January 2000, §10 million on 1 July 2000and §5 million on 1 January 2001. The production cost of each car is assumed tobe incurred at the beginning of the calendar year of production and will be §9,000during 2002. The sale price of each car is assumed to be received at the end ofthe calendar year of production. Both the production costs and the sale prices areassumed to increase by 5.00% on each 1 January, the first increase occurring on 1January 2003. It is also assumed that 5,000 cars will be produced each year andthat all will be sold. The sale price of each car produced in 2002 is §12,100.(a) Calculate the discounted payback period at an effective rate of interest of 9.00%per annum.(b) Without doing any further calculations, explain whether the discounted payback period would be greater than, equal to, or less than the period calculatedin (a) if the effective rate interest were substantially less than 9.00% per annum

The price of a car depreciates in the first year by 25% in the second year by 20% in the third year by 15% and so on. The final price of the car after 3 years, if the present cost of the car is Rs. 10,00,000:Options7, 80, 0006, 90,0001, 70,0005, 10,000

You are given the following information for the year ended 31 October 2019: Cost item Amount (Sh) Purchase of raw materials 112,000 Returns inwards 8,000 Decrease in stock of raw materials 8,000 Direct wages 42,000 Carriage outwards 4,000 Carriage inwards 3,000 Production overheads 27,000 Increase in work-in-progress 10,000 The value of factory cost of goods completed is Select one: a. Sh 202,000 b. Sh 174,000 c. Sh 183,000 d. Sh 182,000

The cost of manufacturing a car includes the cost of materials, labour and overheads. In 2014, the cost of these items was in the ratio of 5 : 4 : 3. In 2015, the cost of the material rose by 16%, the cost of the labour increased by 10% but the overheads were reduced by 8%. Find the increased percent in the price of the car.

During its first month of operations, a manufacturer incurs the following costs (in dollars) related to activities within its factory:Direct materials $15,000Direct labor $30,000Manufacturing overhead $40,000What amount should be reported as cost of goods sold on the income statement if 5,000 units are produced and 4,000 are sold? $56,000 $68,000 $70,000 $85,000

Catalyst Ltd. Makes a single product with the following details:Description Current Situation Proposed ChangeSelling Price (` /unit) 10Direct Costs (` /unit) 5Present number of setups per production period,(before each production run, setup is done) 42Cost per set up (` ) 450 Decrease by` 90Production units per run 960 1,008Engineering hours for production period 500 422Cost per engineering hour (` ) 10The company has begun Activity Based Costing of fixed costs and has presently identified twocost drivers, viz. production runs and engineering hours. Of the total fixed costs presently at`96,000, after the above,` 72,100 remains to be analyzed. There are changes as proposed abovefor the next production period for the same volume of output.Required(i) COMPUTE units and production runs Catalyst Ltd. should produce in the changed scenariofor break-even.(ii) ADVISE whether Catalyst Ltd. should continue to break up the remaining fixed costs intoactivity- based costs