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assignment_7.docxAssignment:
Complete the following problems: You must show your work and complete both problems to get any credit!
1) (Chapter 10) Identify which of the following costs are fixed and which are variable:
a) Electricity for machinery in a plant
b) Sales commission
c) Property taxes on a factory building
d) Property taxes on an administrative building
e) Factory fire insurance
f) Regular maintenance on machinery and equipment
g) Wages paid to temporary or seasonal workers
h) Salaries paid to design engineers
i) Heat and air conditioning in a plant
j) Basic raw materials used in production
2) (Chapter 11) A machine costing $80,000 to buy and $6,000 per year to operate will save mainly labor expenses in packaging over five years. The anticipated salvage value of the machine at the end of five years is $4,000.
a) If a 12% return of investment (rate of return) is desired, what is the minimum required annual savings in labor from this machine?
b) If the service life is four years instead of five, what is the minimum required annual savings in labor for the firm to realize a 12% return on investment?
c) If the annual operating cost increases 10%, say from $6,000 to $6,600, what will happen to the answer in (a)?
Formatting:
Text Size: All of the text in this assignment needs to be set in 10 or 12-point size. Please resist the temptation to mix and match point sizes. If you doubt your applications intentions, just select all of your text and insure that it is in 10 or 12-point size.
Margins: The right and left side can be set for ½” (0.5) margins. Set the top and bottom margins to one (1”). The only text that ends up on the outside of the one-inch margin is the page number.
Name Block: Place the name block in the upper left corner of the page. In MS Excel, use the left side cells. In this class the name block only needs to be on the first page. Put your name first , then the class title and then the date . Example:
