Answer:
d. Sales allowance.
Explanation:
Gershwin Wallcovering Inc. shipped the wrong shade of paint to a customer. The customer agreed to keep the paint upon being offered a 15% price reduction. The price reduction is an example of sales allowance. Sales allowance can be defined as the reduction or decrease in the price, charging less to the customer due to some negligence of the seller, issues with product, late delivery, delayed delivery, or wrong price tag and incorrect price charged. Sales allowance is being created when the buyer has been sent the bill, but before he or she pays for it. Same is the case which can be seen here in this case where Gershwin Wallcovering Inc. has shipped the wrong shade of paint to a customer and had to offer the sales allowance.
Increasing the effectiveness of internal controls would have the greatest effect on r<span>educing the control risk.</span>
The risk control includes evaluation of potential losses and actions to reduce or eliminate risks. The potential risk factors in a firm's operations are identified (technical and non-technical aspects of the business, financial policies, and other policies).
Given the data in the problem, we can calculate the cost of production for each bucket:
one bucket requires:
500 grams of plastic and one-half hour of direct labor.
The plastic costs $10.00 per 500 grams and the employees are paid $15.00 per hour.
Therefore, one bucket costs (material and labor):
$10.00 + $15.00 * (1/2 hour) = $17.50 per bucket plus (1.10 * $7.50) = $25.75
for 380 buckets :
$25.75 * 380 = $9785
This value only represents the cost of production of 380 buckets for the month of March. <span />
Answer:
Debit : Cost of Goods Sold : $75
Credit : Inventory : $75
Explanation:
The lower-of-cost-or-market method is based on the conservative accounting theory. This is where company accounts are prepared with caution and verification. All losses are recorded as they are discovered whereas gains are recorded only after realised. In this case, there is a gain in Inventory A, hence it won’t be recorded as of yet. However, the value of Inventory B has reduced and this requires to be recorded.
The cost of Inventory B should be reduced to the lower net realizable value, hence it would be reduced by the difference : $625 - $550 = $75
Debit : Cost of Goods Sold : $75
Credit : Inventory : $75
Answer:
Selling
Explanation:
Marketing refers to the process of designing , promoting and distributing products and services driven by an objective of customer satisfaction, achieved through satisfaction of customer wants in the best possible manner.
Following are the four eras of marketing:
- Production era: This era was characterized by abundant raw materials, new mechanical methods. Herein, companies majorly dealt in a single product and marketing efforts were confined to brochures or catalogs.
- Selling era: In this era companies began focussing upon gaining a competitive edge, characterised by campaigns and customer needs assumed importance.
- Brand Marketing: Herein the position of a brand manager was created to assume responsibility for all brand related activities which included it's marketing and competition became intense.
- Relationship Marketing : Under this era which is the current era, the focus of marketers has shifted to customer needs, maintaining good business-customer relationships and their ultimate satisfaction.
The given case corresponds to the selling era, wherein promotion has been emphasized with significant portion of the budget being allocated to such activity.
