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2 years ago

An expenditure made in connection with a machine being used by an enterprise should be:

Business

1 answer:

GarryVolchara [31]2 years ago

6 0

Answer:

The correct answer is D

Explanation:

Expenditure is the funds which is used by organizations, firms or the corporations in order to attain the improve existing ones, new assets or the decrease the liability. In short, it is the use of the resource in the business operations.

So, when the expenditure is made on machine which is used by an enterprise need to be capitalized if it increase the quantity produced by the machine.

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Company XYZ has 2 fixed price contracts for 2 different clients. The company has enough capacity for both contracts but is uncer

frozen [14]

Answer:

The contract A yields a loss under ABC but Contract B yields a profit.

ABC Profit contract A $ (3000) contract B $ 11250

Under absorption costing both contract yield profits.

Absorption Profit contract A $ 3250 contract B $7500 

Management should make decisions using ABC and reject Contract A and accept Contract B.

Explanation:

Customer AAA BBB

Component Type A999 B999

Contract Value ($) $27,000 $100,000

Contract Quantity 1,000 unit 2,000 unit

Material cost/unit $15 $20

Molding time/batch 5 hours 7.5 hours

Batch size 100 units 50 units

Activity Based Rate= Cost per Unit of Cost Driver

Activity Cost driver Cost Rate

Molding 2,000 $150,000 $150,000 / 2,000 = 75

Inspection 150 $75,000 $75,000/150 = 500

Production 20 $125,000 $125,000/20= 6250

Total $ 350,000

Cost Drivers Consumed

Activity A999 B999

Molding time/batch 5 hours* 10 7.5 hours *40

50 300

Batch size 1,000 unit/ 100 units 2,000 unit/50 units

= 10 =40

ABC Profits for Each Contract

A999 B999

Selling Price $27,000 $100,000

Materials 15*1000 20 * 2000

= 15000 = 40,000

Molding 50 hours *75 300* 75

3750 22500

Inspection 10 batches *500 40 batches *500

$ 5000 $ 20000

Management Contracts $ 6250 $ 6250

Total $ 30,000 $ 88,750

Profit $ (3000) $ 11250

Overhead Rate Absorption Costing

Total Overheads= ( 150,000 + 125,000+ 75000) = $ 350000

Annual Molding Hours = 2000

Rate= $ 350,000/2000=$ 175 per molding hour

Absorption Costing

Profit For each Contract

A999 B999

Selling Price $27,000 $100,000

Materials 15*1000 20 * 2000

= 15000 = 40,000

Overheads 50 hours *175 300 Hours *175

= 8750 = 52,500

Total Cost 23750 92500

Profit 3250 7500

The contract A yields a loss under ABC but Contract B yields a profit.

Under absorption costing both contract yield profits.

Management should make decisions using ABC and reject Contract A and accept Contract B.

3 0

2 years ago

At an activity level of 3,000 units, North Corporation's total variable cost is $15,000 and its total fixed cost is $20,000. For

oee [108]

Answer:

$5 per unit.

Explanation:

At an activity level of 3,000 units, we have:

Variable cost per unit = Total variable cost / Units produced = $15,000 / 3,000 = $5

Since the variable cost per unit must be equal at both lowest and highest level of activities, theerefore, the variable cost per unit at 3,500 is also $5 per unit.

3 0

2 years ago

ADVANCED ANALYSIS Assume the following values for Figures 4.4a and 4.4b: Q1 = 20 bags. Q2 = 15 bags. Q3 = 27 bags. The market eq

Amiraneli [1.4K]

Answer:

Explanation:

a. Total surplus is the area bounded by points a, b, and c. To calculate total surplus, we use the following formula for the area of a triangle: Area = ½ × Base × Height. The area between the demand curve and the supply curve for the quantity ranging from 0 to 20 is the total economic surplus. This is a triangle with a base (best read off the price axis) of $80, which is the price difference at Q = 0, or between points a and c, and a height of 20 (the number of units purchased in equilibrium). Using these values, we have a total surplus of (1/2) × $80 × 20 = $800.

The consumer surplus is the area between the demand curve and the equilibrium price line. Here we have a base of $40 (the price difference between the demand schedule price at Q = 0, which is $85, and the equilibrium price of $45). The height of the triangle is once again 20 (the number of units purchased in equilibrium). Using these values, we have a consumer surplus of (1/2) × 40 × 20 = $400.

b. Deadweight loss is the difference in total surplus between an efficient level of output Q1 and a reduced level of output at Q2. We can calculate this as the area of a triangle bounded by points bde. The base of this triangle is the difference in prices at points d and e, or $55 – $35 = $20. The height of this triangle is given by the difference in the restricted level of output of Q2 = 15 and the efficient level of output Q1 = 20, or 5 units. Thus, the area of this triangle (the deadweight loss) is equal to (1/2) × $20 × 5 = $50. The remaining total surplus can be found by subtracting the deadweight loss from the original (efficient) total surplus. This is $800 (maximum total surplus) – $50 (deadweight loss) = $750.

c. The deadweight loss from overproduction is the difference in total surplus between an efficient level of output Q1 and an additional level of output at Q3. We can calculate this as the area of a triangle bounded by points bfg. The base of this triangle is the difference in prices at points f and g, or $59 – $31 = $28. The height of this triangle is given by the difference in the additional level of output Q3 = 27 and the efficient level of output Q1 = 20, or 7 units. Thus, the area of this triangle (the deadweight loss) is equal to (1/2) × $28 × 7 = $98. The remaining total surplus can be found by subtracting the deadweight loss from the original total surplus. This is $800 (maximum total surplus) – $98 (deadweight loss) = $702. Note here that we maximize total (producer + consumer) surplus by producing the equilibrium quantity, but we lose surplus from overproduction (inefficient use of resources).

3 0

2 years ago

Symon's Suppers Co. has announced that it will pay a dividend of $4.23 per share one year from today. Additionally, the company

sweet-ann [11.9K]

Answer:

$68.23

Explanation:

In this question, we apply the dividend growth rate model which is shown below:

The computation of the current share price is shown below:

= (Current year dividend) ÷ (Rate of return on company stock - growth rate)

= ($4.23) ÷ (10.6% - 4.4%)

= ($4.23) ÷ (6.2%)

= $68.23

We simply find out the ratio between the current year dividend per share and difference between the rate of return and the growth rate

6 0

2 years ago

The state government offered Mike $300,000 for his family’s property, which they plan to use for building a new development. The

Usimov [2.4K]

The correct sentence is given below:

The state government offered Mike $3000,000 for his family's property, which they plan to use for building a new development. THE FIFTH AMENDMENT allows the state government to take the property as long as it is used for NON PROFIT PURPOSES. Mike can still dispute the government's offer if the compensation IS LESS THAN THE FAIR MARKET VALUE OF THE LAND.

4 0

2 years ago

Read 2 more answers