Posted: May 4th, 2016

Assuming interest rates remain at 10% over the next two years, should Company B accept Company As offer?

Kepler’s Fudge Factory had the following information available for the month of September:

Beginning Ending
Raw materials inventory $41,000 $21,000
Work in process inventory $26,000 $36,000
Finished-goods inventory $31,000 $21,000
Raw material purchased $98,000
Direct labor (2,000 hrs. @9) 18,000
Overhead 51,000

Required:

Calculate the cost of goods manufactured for the month and show work calculationCompany A purchases obsolete inventory and re-sells it on-line. Company A learns that Company B is selling some obsolete inventory for $100,000. Company A wants to purchase the inventory immediately, but cannot pay afford the $100,000 price tag until one of its other investments matures and becomes available in two years. In exchange for obtaining the obsolete inventory now, Company A offers to pay Company B $121,000 in two years.