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Aleonysh [2.5K]
3 years ago
5

Aurora Corporation operated without insurance coverage for the first month of 2019. Then, on February 1, 2019, the company paid

the $4,800 premium on a two-year insurance policy with benefits beginning on that date. The company uses the accrual basis. How much insurance expense will be reported on the company's income statement for the year ended December 31, 2019? a) $200 b) $2,200 c) $4.600 d) $4,800
Business
1 answer:
Genrish500 [490]3 years ago
3 0

Answer:

Correct answer is letter B, $2,200

Explanation:

Using accrual basis method, revenue and expenses will be recognized when incurred.

The $4,800 is a 24 months policy, therefore we must compute the insurance expense applicable for the year covering from February 1 to December 31 (11 months)

An adjusting entry to recognize the expire portion of the insurance must be done at the year end in the amount of $2,200.

($4,800 / 24 months = $200 x 11 months = $2,200)

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Answer:

weighted-average contribution margin= $4.7

Explanation:

Giving the following information:

Hurricane lamps account for 70 percent of the units sold, while the flashlights account for the remaining 30 percent of unit sales. The unit sales price of the lamps is $9.00, and the unit variable cost is $4.00. The unit sales price of the flashlights is $7.00, and the unit variable cost is $3.00.

<u>To calculate the weighted-average contribution margin, we need to calculate first the weighted-average selling price and weighted average variable cost for each product.</u>

weighted average selling price= (selling price* weighted sales participation)

weighted average selling price= (0.7*9 + 0.3*7)= $8.4

weighted average variable cost= (variable cost* weighted sales participation)

weighted average variable cost= (0.7*4 + 0.3*3)= 3.7

<u>Now, we can calculate the weighted average contribution margin:</u>

weighted-average contribution margin= 8.4 - 3.7= $4.7

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Answer:

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