Answer:
B. When the supplier is responsible for freight charges.
Explanation:
Goods in Transit can be regarded as merchandise as well as other types of inventory which has already shipped out of shipping dock of the seller, but it has not gotten to the receiving dock of the buyer.This concept is utilized in order to know maybe the buyer or the seller of that particular goods has taken the possession of that particular goods and to know the party that Is paying for transport. The Freight charge, can be regarded as as freight rate, and this is amount that is been paid to a carrier company so that transportation of goods to agreed location will be possible.
It should be noted that Goods in transit are included in a purchaser's inventory When the supplier is responsible for freight charges.
Kluber, Inc. had net income of $911,000 based on variable costing. Beginning and ending inventories were 56,100 units and 54,200 units, respectively. Assume the fixed overhead per unit was $1.80 for both the beginning and ending inventory. What is net income under absorption costing?
a. $811,730
b. $904,160
c. $1,010,270
d. $907,580
e. $911,000
Answer:
Net operating income (absorption)= $907,580
Explanation:
Giving the following information:
Fixed overhead per unit= $1.80
Net income= $911,000 (variable costing)
Beginning inventory= 56,100 units
Ending inventory= 54,200 units
Under absorption costing, fixed manufacturing overhead is a product cost. We need to incorporate into the cost of goods sold the fixed overhead from beginning inventory and deduct the fixed overhead allocated into ending inventory.
Net operating income= 911,000
Less:
Fixed overhead beginning inventory= (1.8*56,100)
Add:
Fixed overhead ending inventory= (1.8*54,200)
Net operating income (absorption)= $907,580
Classical economists believed that: _________
a) budget deficits and surpluses were necessary for the control of economic fluctuations.
b) market economies are inherently unstable because of fluctuating aggregate demand.
c) market economies suffer prolonged periods of recessions and depressions.
d) price flexibility automatically directs market economies to full employment
Answer:
the answer is D
Explanation:
A stock has a beta of 1.45, the expected return on the market is 19 percent, and the risk-free rate is 5.00 percent. What must the expected return on this stock be? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)
Answer: 25.30%
Explanation:
This can be calculated by the Capital Asset Pricing Model (CAPM):
= Risk free rate + Beta * (Market return - Risk free rate)
= 5% + 1.45 * (19% - 5%)
= 5% + 20.3
= 25.30%
WHAT ARE THE NEW LINKEDIN LIMITS?
Answer:
100 invites per week.
The new invite limits have been introduced by LinkedIn according to which you can’t send more than 100 invites per week. When you have reached the limit, a notification will pop up saying you’ve reached weekly limits.
You can’t do anything about it until the new week starts and the weekly limit resets.
3. Explain how the employees of an American organization and Bangladeshi organization will be culturally different in terms of power distance, uncertainty avoidance, and masculinity-femininity inde
Answer:
Explanation:
POWER DISTANCE : This dimension deals with the fact that all individuals in societies are not equal – it expresses the attitude of the culture towards these inequalities amongst us. Power Distance is defined as the extent to which the less powerful members of institutions and organisations within a country expect and accept that power is distributed unequally.
Bangladesh scores high on this dimension (score of 80) which means that people accept a hierarchical order in which everybody has a place and which needs no further justification. Hierarchy in an organization is seen as reflecting inherent inequalities, centralization is popular, subordinates expect to be told what to do and the ideal boss is a benevolent autocrat MASCULINITY : A high score (Masculine) on this dimension indicates that the society will be driven by competition, achievement and success, with success being defined by the winner / best in field – a value system that starts in school and continues throughout organisational life.
A low score (Feminine) on the dimension means that the dominant values in society are caring for others and quality of life. A Feminine society is one where quality of life is the sign of success and standing out from the crowd is not admirable. The fundamental issue here is what motivates people, wanting to be the best (Masculine) or liking what you do (Feminine).
Bangladesh scores 55 on this dimension and can be considered a a Masculine society. In Masculine countries people “live in order to work”, managers are expected to be decisive and assertive, the emphasis is on equity, competition and performance and conflicts are resolved by fighting them out. UNCERTAINTY AVOIDANCE : The dimension Uncertainty Avoidance has to do with the way that a society deals with the fact that the future can never be known: should we try to control the future or just let it happen? This ambiguity brings with it anxiety and different cultures have learnt to deal with this anxiety in different ways. The extent to which the members of a culture feel threatened by ambiguous or unknown situations and have created beliefs and institutions that try to avoid these is reflected in the score on Uncertainty Avoidance.
Bangladesh scores 60 on this dimension and thus has an high score. Countries exhibiting high Uncertainty Avoidance maintain rigid codes of belief and behaviour and are intolerant of unorthodox behaviour and ideas. In these cultures there is an emotional need for rules (even if the rules never seem to work) time is money, people have an inner urge to be busy and work hard, precision and punctuality are the norm, innovation may be resisted, security is an important element in individual motivation.
If the U.S. economy is producing at a level that is substantially less than potential GDP and the government's budget deficits are increasing aggregate demand, then ____________________________ is not much of a danger.
Answer:
an inflationary increase in the price level.
Explanation:
Monetary policy can be defined as the actions (macroeconomic policies) adopted and undertaken by the central bank of a particular country to control the money supply and interest rates so as to boost or enhance economic growth. The central bank uses monetary policies to manage inflation, economic growth through long-term interest rates and level of unemployment in a country.
In order to boost economic growth, a monetary policy is implemented to increase money supply (liquidity). Also, it is used to prevent inflation by reducing money supply.
An inflationary gap, also referred to as an expansionary gap in economics, is typically used for measuring the difference between the gross domestic product (GDP) and the current level of Real Gross Domestic Products that exists when a country's economy is gauged at a full employment rate. Consequently, this situation causes the price of goods and services to go up with a low income level among the people living in the country.
A budget deficit is the amount by which spending exceeds income.
All other factors held constant or all things being equal (ceteris paribus), an increase in government's budget deficit drives the interest rate up.
Generally, when there's a deficit in government budget, they resort to issuing more bonds or borrowing money from creditors. These creditors are likely to be sceptical about the government's ability to repay the debt and as such would increase the interest rate.
Hence, an inflationary increase in the price level of goods and services is not much of a danger if the U.S. economy is producing at a level that is substantially less than potential gross domestic product (GDP) and the aggregate demand is being increased by government's budget deficits.
A firm is making an economic loss of $100,000. This means that: multiple choice 1 the firm should immediately exit the industry. the firm's revenues are less than its opportunity costs. the firm is not making an accounting profit. the firm could increase economic profit if its resources were used in a different way. If a firm is making an economic profit of zero: multiple choice 2 it will have unhappy stockholders. it is not making an accounting profit. the firm should change to a different line of business. it cannot make a higher economic profit by changing how it is using its resources.
A firm is making an economic loss of $100,000. This means that:
Choice 1 -
The firm could increase economic profit if its resources were used in a different way.
If a firm is making an economic profit of zero:
Choice 2 -
It cannot make a higher economic profit by changing how it is using its resources.
What Is Economic Profit (or Loss)?An economic profit or loss is the difference between the revenue received from the sale of an output and the costs of all inputs used, as well as any opportunity costs. In calculating economic profit, opportunity costs and explicit costs are deducted from revenues earned.Opportunity costs are a type of implicit cost determined by management and will vary based on different scenarios and perspectives.The calculation for economic profit --Economic profit = revenues - explicit costs - opportunity costsLearn more about Economic Profit (or Loss) on:
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(b). Cassava is the main commodity in the economy of Dumpusi. Given the hardship in the intervention, the number of cassava producers also increased in the community. In a class discussion, your Economics Lecturer said these two events would result in an increase in With the aid of a diagram, explain the possible effects of the two events on equilibrium price equilibrium price of cassava. Mary, your classmate, argues that the price will rather decrease. and quantity, assuming the salary increase has a greater impact and cassava is a normal good.
Answer:
prices decrease actually
Explanation:
with that much of cassava producers the market of the product just loses its value as it is that common that the only way to making money would be to say something about based on the communities beliefs to raise attention like "Buy some cassava to make the gods happy" something most common in African society
Which of the following statements about the monetary aggregates is true?
a. The growth rates of M1 and M2 always track each other closely.
b. M1 is greater than M2.
c. When the growth rate of M2 increases, the growth rate of M1 must also increase.
d. When you transfer funds from your savings account to your checking account, M1 increases and M2 stays the same.
Given that, in billions of U.S. dollars, we have in currency, in demand deposits, in traveler's checks, in savings deposits, and in other checkable deposits. The total M1 amount in this economy is $__________
Answer: D. When you transfer funds from your savings account to your checking account, M1 increases and M2 stays the same.
Explanation:
1. Since M2 = M1 + Saving deposit + Time deposits + Money Market deposit of individuals, then from the options given, the true statement about the monetary aggregate is that when you transfer funds from your savings account to your checking account, M1 increases and M2 stays the same. Therefore, the fire option is D.
2. Your second question isn't well written but let's assume some figures in order to solve the question.
Let's say,
Currency = $863.2 billion
Demand deposit = $573.5 billion
Traveler's cheque = $3.8 billion
Savings deposit = $5237.8
Other checkable deposit = $319
Therefore, the total M1 amount in this economy will be:
M1 = Currency + Demand deposit + Travelers check + Other checkable deposits
= 863.2 + 573.5 + 3.8 + 319
= $1759.5 billion
What is the difference between independent and dependent demand. Group of answer choices independent iemand is based on market forces while Dependent demand is based on production schedule dependent demand is what determines independent demand independent demand is based on dependent demand dependent demand is based on sales while independent demand is based on management decisions
Answer:
independent demand is based on market forces while Dependent demand is based on production schedule
Explanation:
Independent demand is the demand for a finished product bought by a consumer e.g. the demand for a textbook by a student
independent demand is based on market forces e.g. the price of the good
Consumers would be more willing to purchase a good that is cheaper compared to other goods
Dependent demand is the demand for the factors of productions that are needed in the production of the final good or service. e.g. the demand for labour , purchase of inventory needed to produce a good
If consumers do not demand for the finished product, there would be no demand for the inventory
Which of the following are steps in process costing? Select one: A. Visualize the physical flow of units B. Calculate the equivalent units C. Determine the per-unit costs D. Calculate the Cost of Goods Manufactured and the Ending WIP Inventory E. All of the above
Answer: E. All of the above
Explanation:
In process costing, all of the above are used. Process costing is used for the production of goods that a re homogenous so the cost is the same for all the goods.
First one must visualize the flow of the goods to see the costs they incur at each stage. The equivalent units should then be calculated as this would show the number of units that the cost is being assigned to. Next is to divide the costs incurred by the equivalent units to find the cost per unit. Then calculate the cost of goods manufactured based on the manufactured and ending inventory
Your boss asked you to analyze Green Hamster Manufacturing's performance for the past three years and prepare a report that includes a benchmarking of the company's performance. Using the company's last three years of financial reports, you've calculated its financial ratios, including the ratios of Green Hamster Manufacturing's competition-that is, comparable ratios of other participants in the industry-and submitted the report.
Along with calculating the ratios, what else is needed for your report?
a. Making observations and identifying trends that are suggested by the ratio analysis
b. Identifying the factors that drive the trends in the ratios
c. Both of the above
Most decision makers and analysts use five groups of ratios to examine the different aspects of a company's performance. Indicate whether each of the following statements regarding financial ratios are true or false?
Statements
One possible explanation for an increase in a firm's profitability ratios over a certain time span is that the company's income has increased.
Market-value or market-based ratios help analysts figure out what investors and the markets think about the firm's growth prospects or current and future operational performance.
A company exhibiting a high liquidity ratio means it is likely to have enough resources to pay off its short-term obligations.
Debt or financial leverage ratios help analysts determine whether a company has sufficient cash to repay its short-term debt obligations.
Asset management or activity ratios provide insights into management's efficiency in using a firm's working capital and long- term assets.
Ratio analysis is an important component of evaluating company performance. It can provide great insights into how a company matches up against itself over time and against other players within the industry. However, like many tools and techniques, ratio analysis has a few limitations and weaknesses. Which of the following statements represent a weakness or limitation of ratio analysis?
A. A firm may operate in multiple industries.
B. A firm's financial statements show only one period of financial data.
C. Different firms may use different accounting practices.
Ratio analysis is an important component of evaluating company performance. It can provide great insights into how a company matches up against itself over time and against other players within the industry. However, like many tools and techniques, ratio analysis has a few limitations and weaknesses.
Answer:
1. c. Both of the above
2. a. False
b. True
c. True
d. False
e. True
f. True
3. c. Different firms may use different accounting practices.
Explanation:
Ratio Analysis is one of the method to evaluate a company performance. It helps to analyse a company performance based on different financial metrics. Profitability ratios help to understand company profits position and identify reason for their increase or decrease. Liquidity ratios help understand company's ability to payoff its short term debt obligations.
Ransom Widgets allocates the estimated cost of its accounting department, $200,000, to its production and sales departments since the accounting department supports these departments with regard to payroll and accounts payable functions. The accounting department costs will be allocated based on the number of employees using the direct method. Information regarding employees follows:
Department Employees
Accounting 4
Production 36
Sales 12
How much of the accounting department costs will be allocated to the production and sales departments, respectively?
a. Production Sales
$150,000 $50,000
b. Production Sales
$180,000 $60,000
c. Production Sales
$1,800,000 $600,000
d. Production Sales
$22,222 $66,667
Answer:
a. Production Sales
$150,000 $50,000
Explanation:
Given that
Number of employees in Production Dept. 36
Number of employees in Sales Dept. 12
So,
Total Number of employees is
= 36 + 12
=48
Now
Cost allocated to Production Dept. is
= $200,000 × 36 ÷ 48
= $150,000.00
And, the Cost allocated to Sales Dept. is
= $200,000 × 12 ÷ 48
= $50,000.00
Mewing Company net sales revenue of $100,000, operating expenses of $50,000, and net income of $25,000. What is the percentage that will be shown for operating expenses in the vertical (common size) income statement
Answer:
poop is the place to go. as long a as there is a bathroom nearby
What are the purposes of the Democratic leadership style?
Answer:
#It brings peace in the society.
#It increases the growth/development of a society.
#It enables civilians of a society to express themselves.
Answer:
Democratic leadership is a type of leadership in which the Group's members play a more participatory role.
Explanation:
This leadership style allows everyone to participate, discuss ideas, hear their views, and encourage debate. However, the group leader still needs guidance and guidance to achieve the goals and goals.
Members of the Group are encouraged to share opinions and ideas, even if the leader retains the last say in decisions.Group members feel more committed to the process.Creativity is promoted and recompensed.As there is group engagement and discussion, more thoughts and ideas lead to better ideas and solutions, the main benefit of a democratic leadership style.
The participants in a group participate more in and engage in projects that increase their investment in the final results. In essence, they care more and increase productivity.
Give examples if operational conflicts that could occur in a cross- cultural context because of different attitudes towards:1) time, 2) individualism. Give a country or region that would be different from the US for each of the two variables.
The correct answer to this open question is the following.
Give examples of operational conflicts that could occur in a cross-cultural context because of different attitudes towards:1) time, 2) individualism.
Well, let's start with time. In the United States, time is of the utmost importance. There we have the old saying: "Time is money."
In the workplace, everything is based on the smart and efficient use of time. No time must be wasted in the workplace.
Individual effort is important in the American culture, but the team effort, the concept of being a good team player is very important under the following premise: teams can accomplish more than individuals.
What most Americans desire is individual recognition through team effort.
That is why team sports are so good in the United States because they exemplify the way teams function and what they can accomplish. For instance, college and pro football, basketball, and baseball.
The region that has a different approach, is Latin America. This does not mean that is better than the other, just that there are major differences between the two.
The management of time is very different in Latin American countries. It is not as important as the US. People in Latin America approach the concept of time in a more relaxed way. In Latin America, there is a more relaxed approach to time. Nothing is urgent, Things take time. Things are made at a different pace compared to the US.
And regarding individualism, Latin American people tend to prefer to be more individualistic to do things trying to get some recognition, The team concept is not as developed as in the US.
You purchased an automobile a year ago for $10,000. Its current market price is $6,000, and the expected market value one year from now is $4,000. If the interest rate is 10 percent, how much will it cost you to keep the car for an additional year (over and above operation and maintenance costs)
Answer: $2600
Explanation:
From the information given, the cost price of the automobile is $10000 but the current market price is $6000. If the automobile is old now for $6000 and the money is kept in a bank for.one year at an interest rate of 10%, then the interest gotten on it will be:
= $6000 × 10% × 1
= $600
In a situation whereby the automobile is sold the following year, then the price will be $4,000 and I will get $4,000. Therefore, the cost for keeping the car for an additional year will then be:
= (Current price - Future price) + Interest amount
= ($6,000 - $4,000) + $600
= $2,600.
Prove shylock is stubborn
Kết luận sự thích ứng tâm lý của sinh viên năm nhất
Answer:
I think I should ask in English language
Your company is considering a project that will cost $100. The project will generate after-tax cash flows of $37.50 per year for five years. The WACC is 10 percent and the firm's D/A ratio is 0.70. The flotation cost for equity is 6 percent, the flotation cost for debt is 3 percent, and your firm does not plan on issuing any preferred stock within its capital structure. If your firm follows the practice of incorporating flotation costs into the project's initial investment, what is the weighted average flotation cost for the firm
Answer:
3.9%
Explanation:
Calculation to determine the weighted-average flotation cost for the firm
Using this formula
Weighted-average flotation cost =D/A ratio(Flotation cost for debt)+ Flotation cost for debt(Flotation cost for equity)
Let plug in the formula
Weighted-average flotation cost=.7(3%) + .3(6%)
Weighted-average flotation cost=.0021+.0018
Weighted-average flotation cost=.0039*100
Weighted-average flotation cost= 3.9%
Therefore the weighted-average flotation cost for the firm is 3.9%
The Assembly Department produced 1,000 units of product during March. Each unit required 1.25 standard direct labor hours. There were 1,300 actual hours used in the Assembly Department during March at an actual rate of $12 per hour. The standard direct labor rate is $12.5 per hour.
Required:
Assuming direct labor for a month is paid on the fifth day of the following month, journalize the direct labor in the Assembly Department on March 31.
Answer:
Debit Work in process for $15,625
Debit Direct labor time variance for $625
Credit Direct labor rate variance for $650
Credit Wage payable for $15,600
Explanation:
Before preparing the journal, the following calculations are done first:
Wage payable = Actual hours * Actual rate per hour = 1,300 * $12 = $15,600
Direct labor time variance = (Actual hours - Standard hours) * Standard direct labor rate = (1,300 - (1,000 * 1.25)) * $12.50 = $625 Unfavorable
Note: Direct labor time variance is Unfavorable because Actual hours is greater than Standard hours.
Direct labor rate variance = (Actual rate - Standard rate) * Actual hours = ($12 - $12.50) * 1,300 = -$650 Favorable
Note: Direct labor rate variance if Favorable because Actual rate is lower than the Standard rate.
Work in process = Wage payable + Absolute value of direct labor rate variance - Direct labor time variance = $15,600 + $650 - $625 = $15,625
The journal entries will now look as follows:
Date Particulars Debit ($) Credit ($)
Mar. 31 Work in process 15,625
Direct labor time variance 625
Direct labor rate variance 650
Wage payable 15,600
(To record the direct labor in the Assembly Department.)
If contribution margin is $220000, sales is $400000, and net income is $180000, then variable and fixed expenses are:________
Answer:
Total variable cost= $180,000
Fixed costs= $40,000
Explanation:
Giving the following information:
Contribution margin= $220,000
Sales= $400,000
Net income= $180,000
The contribution margin formula is as follow:
Total Contribution margin= sales - total variable cost
Therefore, we need to isolate the total variable cost and replace the variable with the data:
Total variable cost= sales - total contribution margin
Total variable cost= 400,000 - 220,000
Total variable cost= $180,000
Finally, the fixed costs:
Fixed costs= total contribution margin - net income
Fixed costs= 220,000 - 180,000
Fixed costs= $40,000
Selected current year company information follows:
Net income $15,953
Net Sales 712,855
Total liabilities, beginning-year 83,932
Total liabilities, end-of-year 103,201
Total stockholders' equity, beginning-year 198,935
Total stockholders' equity, end-of-year 121,851
Total asset turnover is:________.
a. 2.24 times
b. 2.81 times
c. 3.64 times
d. 4.67 times
e. 6.28 times
Answer:
b. 2.81 times
Explanation:
Calculation to determine Total stockholders' equity, end-of-year 121,851
Total asset turnover is:
First step is to calculate the Total assets
Beginning Ending
Total liabilities $83,932 $103,201
Total equity 198,935 121,851
Total assets $282,867 $225,052
Now let determine the Total asset turnover
Total asset turnover = $712,855/[($282,867 + $225,052)/2]
Total asset turnover= 2.81 Times
Therefore Total stockholders' equity, end-of-year 121,851
Total asset turnover is:2.81 Times
phân tích phạm trù hàng hoá sức loa động theo quan điểm cua chủ nghĩa mác.Thực trạng thị trường sức lao động ở nước ta hiện nay. Là sinh viên trường đại học anh chị nhận thấy mình có trách nhiệm gì trong việc nâng cao chất lượng nguồn nhân lực đáp ứng yêu cầu của sự nghiệp công nghiệp hoá đất nước
Emmitt uses his leadership and position to produce effects on others and influence his followers. What term is used to describe this ability of leadership?
a. Coercion
b. Force
c. Power
d. Authority
Answer:
c. Power
Explanation:
Leadership can be defined as a process which typically involves motivating, encouraging and inspiring employees working under an individual to be innovative and create positive changes that will foster growth and enhance the success of a business firm or company in the future.
A leader can be defined as an individual who is saddled with the responsibility of controlling, managing and maintaining a group of people under him or her. Some types of power expressed by leaders are referent power, legitimate power, coercive power, etc.
Generally, leaders use their powers to get other people to follow them. Some forms of power result from a formalized position in the organization while others are derived from personal characteristics or knowledge.
In this scenario, Emmitt uses his leadership and formal position to produce effects on others and influence his followers. Thus, the terminology which is used to describe Emmit's ability of leadership is power.
In conclusion, power is based on three (3) main factors, which are leader, follower and situation.
Daphne Inc., a steel manufacturing company, is planning to buy a new plant at $1,090,000. The life of the plant is estimated to be 5 years and has cash flows of $109,000, $218,000, $327,000, $436,000, and $545,000. Calculate the payback period for the new plant.
a. 5 years
b. 2 years
c. 4 years
d. 3 years
Answer:
The payback period is exactly 4 years.
Explanation:
Giving the following information:
Initial investment= $1,090,000
Cf1= 109,000
Cf2= 218,000
Cf3= 327,000
Cf4= 436,000
Cf5= 545,000
The payback period is the time required to cover the initial investment:
Year 1= 109,000 - 1,090,000= -981,000
Year 2= 218,000 - 981,000= -763,000
Year 3= 327,000 - 763,000= 436,000
Year 4= 436,000 - 436,000= 0
The payback period is exactly 4 years.
At the end of the first year of operations, 21,500 units remained in the finished goods inventory. The unit manufacturing costs during the year were as follows:
Direct materials $30
Direct labor 18
Fixed factory overhead 22
Variable factory overhead 14
Required:
Determine the cost of the finished goods inventory reported on the balance sheet under (a) the absorption costing concept and (b) the variable costing concept.
Answer and Explanation:
The computation of the cost of the finished goods inventory reported is as follows:
Absorption costing is
= ($30 + $18 + $22 + $14) × 21,500 units
= $1,806,000
And,
Variable costing is
= ($30 + $18 + 14) × 21,500
= $1,333,000
In this way the cost of the finished goods inventory should be determined
The following production data were taken from the records of the Finishing Department for June: Inventory in process, June 1 (35% completed) 5,000 units Completed units during June 64,500 units Ending inventory (63% complete) 4,400 units What is the number of material equivalent units of production in the June 30, Finishing Department inventory, assuming that the first-in, first-out method is used to cost inventories and materials were added at the beginning of the process?
a. 4,400 units
b. 59,500 units
c. 68,900 units
d. 63,900 units
Answer:
d. 63,900 units
Explanation:
Particulars Unit
Beginning inventory -
Units started and completed 59,500 [64,500 - 5,000]
Closing WIP for materials 4,400
Equivalent units for materials 63,900
So, the number of material equivalent units of production in the June 30, Finishing Department inventory is 63,900 units
Front Company had net income of $73,500 based on variable costing. Beginning and ending inventories were 900 units and 1,400 units, respectively. Assume the fixed overhead per unit was $7.95 for both the beginning and ending inventory. What is net income under absorption costing
Answer:
$77,475
Explanation:
Calculation to determine net income under absorption costing
Using this formula
Net income=Net income+(Ending inventories×fixed overhead per unit)- (Beginning Inventories × Fixed overhead per unit)
Let plug in the formula
Net income=$73,500 + (1,400 units x $7.95) - (900 x $7.95)
Net income=$73,500+$11,130-$7,155
Net income=$77,475
Therefore net income under absorption costing is $77,475
High-Low Method
The manufacturing costs of Ackerman Industries for the first three months of the year follow:
Total Costs Units Produced
January $1,900,000 20,000 units
February 2,250,000 27,000
March 2,400,000 30,000
Using the high-low method, determine (a) the variable cost per unit and (b) the total fixed cost.
a. Variable cost per unit $
b. Total fixed cost $
Answer:
Variable cost per unit= $50
Fixed costs= $900,000
Explanation:
Giving the following information:
Total Costs Units Produced
January $1,900,000 20,000 units
February 2,250,000 27,000
March 2,400,000 30,000
To calculate the unitary variable cost and the fixed cost under the high-low method, we need to use the following formulas:
Variable cost per unit= (Highest activity cost - Lowest activity cost)/ (Highest activity units - Lowest activity units)
Variable cost per unit= (2,400,000 - 1,900,000) / (30,000 - 20,000)
Variable cost per unit= $50
Fixed costs= Highest activity cost - (Variable cost per unit * HAU)
Fixed costs= 2,400,000 - (50*30,000)
Fixed costs= $900,000
Fixed costs= LAC - (Variable cost per unit* LAU)
Fixed costs= 1,900,000 - (50*20,000)
Fixed costs= $900,000
