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John and Sally Claussen are considering the purchase of a hardware store from John Duggan.

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John and Sally Claussen are considering the purchase of a hardware store from John Duggan. The Claussens anticipate that the store will generate cash flows of $85,000 per year for 20 years. At the end of 20 years, they intend to sell the store for an estimated $550,000. The Claussens will finance the investment with a variable rate mortgage. Interest rates will increase twice during the 20-year life of the mortgage. Accordingly, the Claussens’ desired rate of return on this investment varies as follows: (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.)

 Years 1-57%Years 6-109%Years 11-2011% 

Required:

What is the maximum amount the Claussens should pay John Duggan for the hardware store? (Assume that all cash flows occur at the end of the year.) (Do not round intermediate calculations. Round your final answers to nearest whole dollar amount.)

 
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Budget Variance Analysis The actual quantity of material used was 31,000 with an actual cost of $7.75 per unit.

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Budget Variance Analysis The actual quantity of material used was 31,000 with an actual cost of $7.75 per unit. The actual labor hours were 33,000 with an actual rate per hour of $15. a) Develop a variance analysis including a budget variance performance report and appropriate variances for materials and labor. Use the budget variance student worksheet provided. b) In your budget variance report, discuss each variance. What does the variance tell you?

I don’t understand what formula to use to fill out my variance report or labor and material variance.

 
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Classify these items or costs into either Direct Materials, Direct Labor, Manufacturing Overhead, or Period Costs

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classify these items or costs into either Direct Materials, Direct Labor, Manufacturing Overhead, or Period Costs. These items/costs are associated with operating a dog grooming/boarding business. The business has an Angel investor and they get a draw every month. I just wanted some clarification if my answers are correct and if not what I put under the wrong category

Direct Materials- Dryer, Cleaning Products

Direct Labor- Groomer, daycare attendant, kennel attendant, receptionist

Manufacturing overhead- grooming table, grooming tub, dog grooming arm, capri tuff mobile cart, shampoo, scissors, clippers, bowls, towels, depreciation on kennels, utilities and insurance, heating system, depreciation on heating system, business loan, draw

Period Costs- cage bank (set of five), toys (used throughout), rubberized flooring (daycare area), fencing for daycare area, 12 kennels cost, installation of fencing

 
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Figure out the break even point for a dog grooming, boarding, and day care business.

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grooming

fixed costs of $2367.92 with a contribution margin of $20. I came up with 118 as the break even units. I also have to figure out target profits for every month of $1,000 and $1,500 the numbers that I came up with are $1,000 (168) units and for $1,500 (193) units

boarding

fixed costs of $1378.99 with a contribution margin of $18. I came up with 76 as the break even units. I also have to figure out target profits of $583 and $909 for every month the numbers that I came up with are $583 (109) units and $909 (127) units

 
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