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Accounting Questions




Question;Question1 ? Incremental;Analysis;Willow Company is considering purchasing a car or;leasing it. The Company is asking you;for an analysis of what you think they should do and give them a;recommendation.;Include in your answer the present value of the lease;payments. HINT: All lease payments are made at the beginning of each year. It is not necessary to include the present;value of all other payments. The;purchase price of the car is at the beginning of the period. This problem requires that you use incremental;analysis to answer the question.;Given Information;Lease;Lease;Payment per Year;8,000;Lease;Term in Years;5;Lease;Interest Rate;10%;Mandatory;Leased Car Maintenance Cost per Year;1,200;Car;Insurance per Year;1,000;Initial;Lease Payment (Down Payment);3,000;Car Purchase;Car;Purchase Price;40,000;Estimated;Maintenance on Purchased Car per Year;800;Car;Insurance;1,000;Useful;Life;5;Car;Salvage Value at the end of 5 years;0;Depreciation;is on the Straight Line Basis;Question 2 ? Essays;Please provide your concise;thoughts on the following issues;Explain why the use of flexible budgets in evaluating actual;performance is superior to using a static budget.In variance analysis, the Company has a direct material price;variance and a direct material usage variance. What do unfavorable variances for each;of these mean.;Question 3 - Essay;Please provide your concise;thoughts on the following issues;Explain the value of Cost-Volume-Profit analysis. Include in your answer a reason for the;importance of the Unit Contribution Margin.In Job-Order and Activity-Based Costing systems we need to ?apply?;manufacturing overhead to different products. Explain why we need to apply;manufacturing overhead.


Paper#42056 | Written in 18-Jul-2015

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