Answer:
The overhead application rate is 1.8
Explanation:
In the question both the estimated and actual overhead cost , material and labor cost are provided -
ESTIMATED ACTUAL
Overhead cost $396,000 $418,000
Material cost $410,000 $413,200
Direct cost $220,000 $224,000
Overhead application rate can be calculated by dividing the total budgeted overhead cost by direct labor cost.
= Budgeted overhead cost / direct labor cost
= $396,000 / $220,000
= 1.8
Answer:
c. $33,000
Explanation:
The computation of the total amount of goodwill recognized is shown below:
Goodwill = Consideration paid + Fair value of non controlling interests - Fair value of net identifiable assets
where,
Fair value of net identifiable assets = Book value of acquired company - Overvalued plant assets + Unreported identifiable intangible assets
= $25,000 - $6,000 + $10,000
= $29,000
So, the goodwill amount is
= $40,000 + $22,000 - $29,000
= $33,000
Two constraints to maximizing profit are cost of production and consumer demand.
Consumer demand is essential for revenue. Competition and budget can affect demand and put constraints to profit maximization. Cost of production can constraint profits maximization too because the higher the cost of raw material, the higher the cost of production will be, which in turn will affect the price of the product. This increase in price can also affect the demand.
The answer is then D.
An example of delayed purchasing is when you would pay for a hot tub in 39 weeks and receiving the hot tub today. It is like a car loan, you would pay for the car over a certain time frame and you would drive home with the car that day. The correct answer is B.
