Answer:
Differential analysis as at April 30
Make (Alternative 1) Buy (Alternative 2)
Purchase Price $0.00 $24.00
Direct materials $8.00 $0.00
Direct labor $12.00 $0.00
Variable Costs - Case related $3.00 $0.00
Total Cost $23.00 $24.00
Conclusion
Company should make carrying cases instead of purchasing as this is cheaper by $1.00
Explanation:
There is a choice to be made between Make (Alternative 1) and Buy (Alternative 2). Compute the Total costs for these choices.
Ignore the fixed overheads as they are the same for both alternatives and hence irrelevant.
Choose the alternative with lower costs.
Answer:
At the time of purchase of raw material inventory,
Raw material inventory account will debit and accounts payable account will credit.
Therefore, the Journal entry for this transaction is as follows:
Raw Materials Inventory Account Dr. $36,000
To Accounts Payable $36,000
(To record the purchase of raw material on account)
Workings:
Raw material Inventory = Units of raw material purchased × Price per unit
= 6,000 × $6
= $36,000
Answer:
The correct answer is intangible.
Explanation:
An intangible asset is a product or service that should not be physically delivered, but that provide us with a service. An intangible product, also called service, should not necessarily revolve around a physical product; There are also so-called pure services, that is, whoever buys a service is not buying something physical; Who buys or hires a service is paying for a transformation process.
Answer and Explanation:
The Preparation of direct material budget is shown below:-
Direct Material budget
Particulars Amount
Units to be produced $90,000 Y
Material per unit 2
Total pounds needed for
production M $180,000 2Y
Add: Desired ending Direct
Material Inventory 20% $36,000 (.2 × 2Y = .4Y)
Total Material requirement $216,000 (2.4Y
)
Less: beginning Raw material
Inventory $9,000 (.1Y)
Material to be purchased
Account $207,000 (2.3Y)
Cost per pound C $5
Total cost of direct Material
Purchases A $1,035,000
2Y + .4Y - .1Y = $207,000
Y = $207,000 ÷ 2.3 $90,000
Answer:
a. Regulatory compliance costs - Fixed cost
b. Salaries of top management and key personnel - Fixed cost
c. Cost of metal used in manufacturing - Variable cost
d. Cost of wood used in manufacturing - Variable cost
e. Mortgage payments - Fixed cost
f. Industrial equipment costs - Fixed cost
g. Interest on debt - Fixed cost
h. Postage and packaging costs - Variable cost
Explanation:
The cost which is affected by the production of units is known as variable cost. The cost which does not vary with the units produced is fixed cost. Fixed cost does not change from period to period irrespective of level of output and is usually same for a certain period. It is easy to budget for fixed costs instead of variable cost. Variable cost changes every period and is based on company's output.
