Financial Math Answers

QUESTION ONE

The manufacturer of product Gero requires three distinct processes A-C. On completion the product was passed from process C to finished goods stock. The following information was obtained in respect of the product

5,000 units of raw materials at ksh 250 were issued to process A and other costs incurred are given below

ELEMENT OF COST PROCESS TOTAL

A B C

Kshs kshs kshs Kshs

Direct materials 5,000 12,000 18,000 35,000

Direct labour 30,000 20,000 10,000 60,000

Direct expenses 2,800 5,200 2,000 10,000

Production overheads - - - 90,000

Production overhead is absorbed by each process at 100% of direct labour

You are required to prepare the process accounts

A.    Distinguish the following terms as used in the Not-for- profit organizations.

                                     i.           Capital and revenue donations

                                   ii.           Receipts and payment accounts

Life fund                 

1. On 15 November in each of the years 1964 to 1979 inclusive an investor deposited £500 in a special bank savings account. On 15 November 1983 the investor withdrew his savings. Given that over the entire period the bank used an annual interest rate of 7% for its special savings accounts, find the sum withdrawn by the investor.

Patric borrows money from Zanele at a simple discount rate of 9,75% per annum. He must pay him R35 000 in 27 months' time. The amount of money that he receives from Zanele now is

To save money for a new house, you want to begin contributing money to a savings account. Your plan is to make equal contributions to the account for eight years. Each contribution will be R18490,00. The contributions will come at the end of every three month period, starting three months from now. The savings account pays 9% interest per annum, compounded quarterly. How much money do you expect to have in the account at the end of the eight years?

miller biker supply is one of manila as large as bakery needs supplier my life usually sell on credit and on the usual term intake 60 day for a customer received to be collected through in a demand nature of minor product it only takes miller 25 days to sell it supplies after being purchased from the supplier .On the other hand miller make use of a 30 days period before it pays its obligation to its supplier

A.compute the operating cycle

B.compute the cash conversion cycle

Tshepo wants to buy a big screen tv. She has five interest rates to choose from if she borrows money from the bank. The cheapest option for her is

1) 29% per year, compounded daily

2) 30% per year, compounded semi-annually

3) 28.5% per year, compounded weekly or

4) 29.5% per year, compounded every two months

John deposits $450 at the end of every 3 months in a savings account. The account has a 5% interest compounded quarterly. How much will he have in his account at the end of 7 years and 3 months?

1. ) The following table shows the number of units produced each month and the total incurred.

MONTH UNITS COST

JUNE 200 50,000

JULY 500 75,000

AUGUST 300 55,000

SEPTEMBER 800 95,000

OCTOBER 700 80,000

NOVERMBER 600 80,000

DECEMBER 400 60,000

Required

              I. Estimate the variable cost per unit and the fixed cost per month use high low method. (6mks)

             ii.  Calculate the regression line Y= a+bx (6mks)

(b) Explain four purpose of transfer pricing (8mks)