Answer: Option (A)
Explanation:
Fair values mostly tends to exist for the marketable security but this in terms does not state that this method is applicable. For instance if investor tends to control the entity with the traded equity, therefore the investment is centralized and thereby, fair-value method of accounting is not being used.
Therefore, from the given options we can state that option (A) does not precisely describes the fair value method.
Answer:
The buyer can sue for specific performance of the contract. In real estate, in order for the buyer to be able to sue for specific performance, he/she must have all the money (or mortgage) ready to finish the transaction. It is very difficult for someone to sue for damages for not wanting to complete the sale of a house because houses are unique in a way that similar houses in different neighborhoods or even streets might be worth a lot more or less.
When you sue for specific performance, the non-breaching party will request that the other party performs their side of the contract.
Answer:
The company should make the components because incremental costs are $2 less than the purchase price
Explanation:
The cost of making each unit of component = Direct Labour + Direct Material + Variable Overhead*
*The overhead cost of $4 contains both a fixed and variable element. It has been mentioned that 25% of overhead cost is incremental i.e. it increases with each additional unit produced (marginal cost). The incremental cost is the variable element.
Variable element = $4 x 25% = $1
Fixed element = $4 x 75% = $3
Thus, the cost of making each unit of component = $5 + $2 + $1 = $8,
whereas the cost of purchasing each unit of complement is $10. Hence, the company should produce the component as it is less by $2 ($10 - $8) to produce than it is to purchase.
Answer:
Net income$ 1,982
Explanation:
Preparation of income statement for Krafty Foods for the year ended December 31, 2021
Krafty Foods Income Statement For the Year Ended December 31, 2021
($ in millions)
Operating revenues 34,375
Less Cost of goods sold 17,631
Gross profit 16,744
Marketing, general and administration expenses
11,560
Operating income 5,184
(16,744-11,560)
Interest and other debt expense, net
1,537
Income before taxes 3,647
(5,184-1,537)
Income tax expense 1,665
Net income$ 1,982
(3,647-1,665)
Therefore the Net income of the income statement for Krafty Foods for the year ended December 31, 2021 will be $1,982
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