Joe decided to quit his computer-programming job (where he was earning $48,000 per year) to start his own software business. For his office, Joe will use a two-story building that he bought 7 years ago for $250,000. The building is located in Hyde Park (South side of Chicago) in an area where a lot of recent construction has taken place, so the market price for the land has increased. You are given the following information about the costs of his firm: Joe will pay himself a wage of: $18,000 per year
Maintenance and insurance $30,240 per year
Revenue $96,000 per year
Land’s salvage (resale) value $395,000
Risk-free interest rate 4.75% annually

Assume for simplicity that all taxes are equal to zero. Calculate the economic annual profits of this firm:

a. 47,760
b. −1,002.5
c. 47,741.2
d. 14,843.3
e. None of the above.

Required information problem 15-1a production costs computed and recorded; reports prepared lo c2, p1, p2, p3, p4 [the following information applies to the questions displayed below. marcelino co.'s march 31 inventory of raw materials is $84,000. raw materials purchases in april are $540,000, and factory payroll cost in april is $364,000. overhead costs incurred in april are: indirect materials, $59,000; indirect labor, $26,000; factory rent, $38,000; factory utilities, $19,000; and factory equipment depreciation, $58,000. the predetermined overhead rate is 50% of direct labor cost. job 306 is sold for $670,000 cash in april. costs of the three jobs worked on in april follow. job 306 job 307 job 308 balances on march 31 direct materials $30,000 $36,000 direct labor 25,000 14,000 applied overhead 12,500 7,000 costs during april direct materials 133,000 210,000 $100,000 direct labor 105,000 150,000 101,000 applied overhead ? ? ? status on april 30 finished (sold) finished in process (unsold) required: 1. determine the total of each production cost incurred for april (direct labor, direct materials, and applied overhead), and the total cost assigned to each job (including the balances from march 31). a-materials purchases (on credit). b-direct materials used in production. c-direct labor paid and assigned to work in process inventory. d-indirect labor paid and assigned to factory overhead. e-overhead costs applied to work in process inventory. f-actual overhead costs incurred, including indirect materials. (factory rent and utilities are paid in cash.) g-transfer of jobs 306 and 307 to finished goods inventory. h-cost of goods sold for job 306. i-revenue from the sale of job 306. j-assignment of any underapplied or overapplied overhead to the cost of goods sold account. (the amount is not material.) 2. prepare journal entries for the month of april to record the above transactions. 3. prepare a schedule of cost of goods manufactured. 4.1 compute gross profit for april. 4.2 show how to present the inventories on the april 30 balance sheet.