The Controller for Truman Canoes Has Gathered the Following Cost

question 20

Essay

The controller for Truman Canoes has gathered the following cost and activity level information:
$$\begin{array} { | l | r | } \hline \text { Average total cost per unit } & \$ 300.00 \\\hline \text { Production level used to calculate average cost } & 2,000 \\\hline \text { Total fixed costs } & \$ 100,000 \\\hline\end{array}$$ a.What is the total cost of producing 2,000 fiberglass canoes?
b.What is the variable cost of producing each fiberglass canoe?
c.Suppose the controller uses the average cost to predict total costs.What total cost would the controller calculate for 3,000 fiberglass canoes?
d.If the controller uses the cost equation to predict total costs,what total cost would the controller calculate for 3,000 fiberglass canoes?
e.Is there a difference between the forecasted total cost using average cost versus the cost equation? If there is a difference,what creates the difference? If there is no difference,when would there be a difference?

Learn the calculation of dividends for preference and ordinary shareholders under various conditions.

Understand the components and calculation of the price-earnings ratio for a corporation.

Learn the calculation of total dividends paid and dividend yield.

Understand the process for calculating book value per ordinary share.

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Definitions:

Zero Coupon Bonds

Bonds issued at a discount from their face value, which do not pay periodic interest but are redeemed at full face value at maturity.

Effective Interest Rate

The real rate of interest taking into account the effects of compounding over a given period.

Discount

A reduction from the full amount or value of a product or service, usually to entice customers or accelerate sales.