Nike,Inc. has developed a variable-overhead rate of $10 per
machine hour,and estimates fixed overhead $250,000 for
production up to 100,000 units per year. If the production
manager estimates 9,000 machine hours for the production of
90,000 units next year, what are estimated variable-overhead
1. Cold Ice, Inc. sells ice cream sells for $2 each. The
variable costs per ice cream are $1 and the fixed overheard
costs are $ 0.35. A summer camp wants to place a one-time
order for 100 cone of ice cream at a price of $ 1.25 each.
What is the minimum price hot dogs should be charge for this
ABC Co. is considering an investment with a cost of $55,000.
Annual cash savings of $100,000, Present Value at %12 (ABC's
discount rate) of $56,502, are expected for the next 10 years.
What can we conclude?
1. ABC Co. should make the investment
2. The investment offers a 12 percent rate of return