Answer:
b. As both an increase in the equipment account and an increase in contributions from donated services.
Explanation:
When the flood damages the vehicles there was a loss in the value of the organisation's equipment. The actor of restoring it to its previous state will require an addition to equipment account. So there will be an increase in equipment.
The services provided by the mechanic were free and will be recorded as a donated service. This is an increase in contributions from donated services.
There is no expense recorded as the services were performed for free.
The correct answer to this open question is the following.
You forgot to include the options for this question. However, we can answer the following.
This scenario best illustrates forward integration.
This is a case of forward integration because BlockWood Inc., which was facing similar difficulties with other buyers too, eventually stopped supplying raw materials and took to manufacturing furniture instead. SO they decided to fabricate their own furniture.
Companies make this decision as a process of vertical integration to expand and grow their business. In this case to produce and control their own products, eliminating the retailer that had decided to pay less money for the raw materials.
So now, Blockwood Inc. has the challenge to design and sell the products it is fabricating.
Answer:
c. $110,000
Explanation:
The computation of profit (loss) from Option One is shown below:-
Profit (loss) from Option One = Sold unit × (Cut the price - Variable cost) - Fixed cost
= 15,000 × ($70 - $56) - $100,000
= 15,000 × $14 - $100,000
= $210,000 - $100,000
= $110,000
Therefore for computing the profit (loss) from Option One we simply applied the above formula.
Answer:
d.$18,900
Explanation:
Gross Profit is the net of Sales value and production cost in the period for the units sold. Under absorption costing all the direct and indirect costs incurred in the production of products are included in the total production cost. As the cost is available for 100 units produced we need to calculate the cost of 90 unit and deduct this cost from the sales value to determine the gross profit and then deduct the operating expenses to calculate the operating income.
Sales (90 units) $90,000
Less: Production costs:
Direct materials ( $40,000 x 90/100 ) $36,000
Direct labor ( 20,000 x 90/100 ) $18,000
Variable factory overhead ( 2,000 x 90/100 ) $1,800
Fixed factory overhead ( 7,000 x 90/100 ) <u>$6,300</u>
Total Production cost <u>($62,100)</u>
Gross Profit $27,900
Less Operating expenses:
Variable operating expenses $8,000
Fixed operating expenses $1,000
<u>($9,000)</u>
Operating Income <u>$18,900</u>
Answer
The answer and procedures of the exercise are attached in the following archives.
Explanation
You will find the procedures, formulas or necessary explanations in the archive attached below. If you have any question ask and I will aclare your doubts kindly.
