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CENTENNIAL BREWERY PRODUCED REVENUES OF $1,145,227 IN 2008...

CENTENNIAL BREWERY PRODUCED REVENUES OF $1,145,227 IN 2008...

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http://theperfecthomework.com/centennial-brewery-produced-revenues-of-1-145-227-in-2008-it-has-expenses-excluding-depreciation-of-812-640-depreciation-of-131-335-and-interest-expense-of-81-112-it-pays-a-marginal-tax-rate-of-34-percent/

CENTENNIAL BREWERY PRODUCED REVENUES OF $1,145,227 IN 2008. IT HAS EXPENSES (EXCLUDING DEPRECIATION) OF $812,640, DEPRECIATION OF $131,335, AND INTEREST EXPENSE OF $81,112. IT PAYS A MARGINAL TAX RATE OF 34 PERCENT

Centennial Brewery produced revenues of $1,145,227 in 2008. It has expenses (excluding depreciation) of $812,640, depreciation of $131,335, and interest expense of $81,112. It pays a marginal tax rate of 34 percent. What is the firm’s net income after taxes? Show and label your calculations.
$120,140
$248,475
$79,292 X
$40,848
Solution:
Earnings before taxes = $1,145,227 – ($812,640 + $131,335 + $81,112) = $120,140
Net income = $120,140 (1 – 0.34) = $79,292
01. Hurricane Wings has budgeted the following costs for a month in which 24,000 wings will be cooked and sold.
Wings, breading, and sauce

$4,900

Direct labor (Variable)

3,500

Rent (per month)

1,100

Depreciation (per month)

900

Other fixed costs

400

 
Each wing sells for $0.80 each. What is the budgeted total variable cost?
A. $8,400
B. $9,500
C. $10,400
D. $10,800
02. Rincon Gifts had the following costs in May when 400 ceramic pots were produced: materials, $4,200; hourly labor, $1,600; depreciation, $800 per month; monthly rent, $700; and other fixed costs, $500 per month. If the production level changes to 500 units, how much will the total costs be?
A. $9,750
B. $7,800
C. $9,250
D. $1,950
03. Hanover Binding plans to produce 40,000 books next year at a total cost of $1,640,000 with a selling price per book of $66.00. The fixed costs total $280,000. Management is considering lowering the price to $60.00 per book, and feels that this action will cause sales to climb to 50,000 books. What will be the incremental costs incurred if 50,000 books are sold?
A. $340,000
B. $20,000
C. $1,700,000
D. $1,300,000
04. Hardigree Insurance has collected the following information over the last six months.
Month Units produced Total costs
March 2,000 $6,700
April 3,200 9,400
May 2,200 7,100
June 3,000 9,500
July 2,800 8,000
August 2,100 6,600


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