The switching between the two goods allows the line to linear rather than bowed out.
I got that message about 10 times still don’t care lol
Answer:
Part 1
Absorption Costing Net Income = $760,700
Part 2
Income under absorption costing will be: Lower than income using variable costing
Explanation:
The difference in net income under absorption costing and variable costing is because of fixed costs that are in closing inventory.
If we are given net income under one method we can find the net income under the other method by performing a reconciliation as follows :
Reconciliation of Variable Costing Income to Absorption Costing Income
Variable Costing Net Income $767, 200
Add fixed cost in closing stock (4, 700 × $2.50) $11,750
Less fixed costs in opening stock (7, 300 × $2.50) ($18,250)
Absorption Costing Net Income $760,700
Answer:
(a)
(1) return on assets = 8.6%
(2) asset turnover = 2.5 times
(3) profit margin = 3.45%
Explanation:
Given
Net sales = $10,700.0
Net earnings = $365.0
Total assets, ending = $4,155.0
total assets, beginning = $4,340.0
(a)
(1) Return on assets = net income/average total assets
= 365/((4155 + 4340)/2)
= 365/(8495/2)
= 730/8495
= 0.0859
≈ 0.086 ≈ 8.6% (rounded to 1 decimal place)
(2) Asset turnover = net revenue/average total assets
= 10700/((4155 + 4340)/2)
= 10700/(8495/2)
= 21400/8495
= 2.5 times (rounded to 1 decimal place)
(3) Profit margin = net earning/net sales
= 365/10700
= 0.034 ≈ 3.45% (rounded to 1 decimal place)
The terms state there is a rent fee of 4% of sales up to $100,000 and 2.5% of sales over $100,000.
Monthly sales average $270,000. $250 Maintenance fee.
What is the average monthly rent plus maintenance fee?
($100,000)(0.04) = $4,000
($170,000)(0.025) = $4,250
Add the two amounts together = $4,000 + $4,250 = $8,250
Monthly rent averages $8,250 and the maintenance fee is $250 = $8,500/month.
