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Ivan
2 years ago
10

Cornerstone, Inc. has $125,000 of inventory that suffered minor smoke damage from a fire in the warehouse. The company can sell

the goods "as is" for $45,000; alternatively, the goods can be cleaned and shipped to the firm's outlet center at a cost of $23,000. There the goods could be sold for $80,000. What alternative is more desirable and what is the relevant cost for that alternative? A. Sell "as is," $125,000. B. Clean and ship to outlet center, $23,000. C. Clean and ship to outlet center, $103,000. D. Clean and ship to outlet center, $148,000. E. Neither alternative is desirable, as both produce a loss for the firm
Business
1 answer:
kvv77 [185]2 years ago
6 0

Answer:

It is better to cleaned and shipped to the firm's outlet center at a cost of $23,000 to be sold at $80,000

Explanation: In alternative A) the firm loss is $80,000 ($125,000-$45,000)

In alternative E) all $125,000 is lost

In alternative B, C and D) the loss is $68,000 ($125,000-$80,000+$23,000)

Relevant costs are those evitable, that are cause of a manager decision related to an specific business decision.  

The only cost that can be avoided in these example is the cost of $23,000 so the goods can be cleaned and shipped to the firm's outlet center

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Angelina_Jolie [31]

Answer: The correct answer is "E. BigFive's employees not only know how to do their work but also are enthusiastic and committed.".

Explanation: The BigFive Inc company, when selecting employees carefully emphasizing the search for skills and above all commitment to the values of customer service and quality of the company, in the long term it was highly benefited since its employees are trained according to the culture Organizational of the company and they not only know how to do their job, but they are also excited and committed.

8 0
2 years ago
ABC Online Merchant has a current stock price of $42.50. The company paid $1.34 in dividends this year, and the dividends are ex
yKpoI14uk [10]

The formula is to calculate stock price through dividend discount model is

Share price  = Dividend/(rate of return - dividend growth rate)

                   =$1.34/(5%-3%)

                   =$67

7 0
2 years ago
An advantage of FIFO is that it assigns the most recent costs to cost of goods sold and does a better job of matching current co
mel-nik [20]

Answer:

The correct answer is False.

Explanation:

This statement that, an advantage of FIFO is that it assigns the most recent costs to cost of goods sold and does a better job of matching current costs with revenues on the income statement, is not correct.

Under fifo method the most recent cost is assign to closing not COGS. It is LIFO method (last in first out ) in which the most recent costs is assign to cost of goods sold. Under the fifo method cost that is incurred first is charged first to COGS.

5 0
2 years ago
You lost $65,000 out of your original $105,000 investment. What percentage of your initial investment was lost?
cestrela7 [59]

Answer:

The answer is 62% (B)

Explanation:

The easiest way to answer this is by simply doing $65,000 divided by $105,000. You'll get 61.9 but if you round it, you get 62% and that's how you get the answer.

Also, I just got this question and I got it correct.

Hope this helps!!

6 0
2 years ago
Robinson Company purchased Franklin Company at a price of $2,500,000. The fair market value of the net assets purchased equals $
Fed [463]

Answer:

Explanation:

Goodwill is defined as the excess in amount of the purchase price of a company over the fair value at acquisition.It is intangible in nature , meaning it can not be physically separated from the other assets. Example are patent , brand name , good employee relation.

1.

Goodwill calculation

Purchase price - $2,500,000

Fair value -          $1,800,000

Goodwill -               $700,000        

2.

No

Under the IAS 36, impairment of assets , goodwill is not amortized but annually tested for impairment as amortization is applicable to intangible assets with a definite useful life while intangible assets with indefinite useful life are annually tested for impairment to evaluate a loss in value experienced.

3

No

Under IAS 38 , Internally generated goodwill are not recognized as no related cost is incurred towards achieving a future benefit

7 0
2 years ago
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