Hana Inc. is considering an investment in new equipment that will be used to manufacture a smartphone. The phone is expected to generate additional annual sales of 4,300 units at $275 per unit. The equipment has a cost of $399,900, residual value of $30,100, and an 8-year life. The equipment can only be used to manufacture the phone. The cost to manufacture the phone follows: Cost per unit: Direct labor $47.00 Direct materials 184.00 Factory overhead (including depreciation) 32.50 Total cost per unit $263.50 Determine the average rate of return on the equipment. If required, round to the nearest whole percent. %
Hana Inc. is considering an investment in new equipment that will be used to manufacture a smartphone. The phone is expected to generate additional annual sales of 4,300 units at $275 per unit. The equipment has a cost of $399,900, residual value of $30,100, and an 8-year life. The equipment can only be used to manufacture the phone. The cost to manufacture the phone follows: Cost per unit: Direct labor $47.00 Direct materials 184.00 Factory overhead (including depreciation) 32.50 Total cost per unit $263.50 Determine the average rate of return on the equipment. If required, round to the nearest whole percent. %
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter19: Capital Investment
Section: Chapter Questions
Problem 31P: Jonfran Company manufactures three different models of paper shredders including the waste...
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Hana Inc. is considering an investment in new equipment that will be used to manufacture a smartphone. The phone is expected to generate additional annual sales of 4,300 units at $275 per unit. The equipment has a cost of $399,900, residual value of $30,100, and an 8-year life. The equipment can only be used to manufacture the phone. The cost to manufacture the phone follows:
Cost per unit: | |||
Direct labor | $47.00 | ||
Direct materials | 184.00 | ||
Factory overhead (including |
32.50 | ||
Total cost per unit | $263.50 |
Determine the average
%
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