This is an example of product differentiation. There are many brands and companies, and each of them fight for the best price while making the best profit. The products are similar, but the only difference are the pricing of the product.
Answer:
a. $140,000 decrease
Explanation:
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The fixed cost would not be eliminated entirely and we have no information of any partial decrease. so the differential analysis shows a decrease in 140,000 in the net income if product T is discountinued
Answer:
Interest expense to be recorded on Dec 31 2018= $8425
Explanation:
Lets first understand what adjusting entry is? Adjusting entries are entries passed at the reporting date in order to comply to the accruals concept of accounting. Accruals concept requires entities to record revenue and expenses in the period that they occur and should not wait until they are received or paid respectively. Revenues and expenses should be matched for the period and recorded.
Now that we have understood adjusting entry, lets calculate interest expense that should be recorded on December 31 2018. So Arch Services records interest payment on a semi-annul basis (i.e every 6 months). Now the bonds are issued on November (i.e two months to the reporting date), considering the accruals concept Arch Services will have to record interest for two months.
The interest expense is calculated as follows:
Annual Interest= $337000×15%
Annual Interest= $50550
Lets convert it into monthly basis as follows:
Monthly interest expense= $4212.5
Interest for two months would be = $4212.5×2
Interest expense to be recorded on Dec 31 2018= $8425
Answer:
Orange Co.'s budget will include the cost of production, which is made up of raw materials, direct labor, and manufacturing overhead. The above cost of production and the accompanying items will not be found in the budget of Pineapple Company. The latter's budget will focus on purchase of goods for sale (instead of raw materials) and inventories of finished goods (instead of raw materials and work in process). Orange Co. determines its product cost per unit from the cost of production divided by the quantity produced. Pineapple Company's product cost is based on the purchase price of goods, which includes the manufacturer's profit.
Explanation:
The operations and accounting for the cost of production of Orange Co. will be different from Pineapple Company's. The difference is a reflection of their statuses as manufacturer and merchandiser respectively. Orange Co. manufactures and sells goods while Pineapple Company sell manufactured goods.
