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2 years ago

Why do you think the accounting requirements for job-order costing are more demanding than those for process costing

1 answer:

8 0

Since there is a cost involved in allocating the specific material and labor to the product, job order cost systems are sometimes more expensive to operate than a straightforward process costing system.

<h3>What is job order costing?</h3>

Job order costing is a costing approach used to calculate the cost of producing each product. This pricing approach is typically used when a company creates a number of items that are distinct from one another and wants to assess the cost of performing a single operation. Direct labor, direct supplies, and manufacturing overhead are all included in task pricing.

Job order costing can be used to determine if a job is profitable. Efficient task order costing enables businesses to generate bids that are competitive while being profitable.

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Jim is evaluating project that will pay him $5,000 per year for 5 years, and then cost him $4,000 per year for 12 years. Jim’s o

FinnZ [79.3K]

Answer:

4.25%

Explanation:

We need to calculate the net present value of the cash flows to determine the IRR.

NPV = PV of Cash inflows - PV of Cash outflows

As the cash inflow and outflow are fixed for specific period of time so, we will use the annuity formula to calculate the NPV.

NPV = [ $5,000 x ( 1 - ( 1 + 18% )^-5) /18% ] - [ ( $4,000 x ( 1 - ( 1 + 18% )^-12) /18%) x ( 1 + 18%)^-6 ]

NPV = $15,636 - $7,102 = $8,534

We need NPV on a higher rate of 10%

NPV = [ $5,000 x ( 1 - ( 1 + 10% )^-5) /10% ] - [ ( $4,000 x ( 1 - ( 1 + 10% )^-12) /10%) x ( 1 + 10%)^-6 ]

NPV = $18,954 - $15,385 = $3,569

IRR = Lower rate + [ Lower rate NPV / (Lower rate NPV - Higher rate NPV) ] (higher rate - lower rate)

IRR = 10% + [ 3,569 / ($3,569 - $8,534) ] (18% - 10%)

IRR = 4.25%

4 0

4 years ago

In two companies making the same product and with the same total sales and total expenses, the contribution margin ratio will be

Bas_tet [7]

Answer:

False

Explanation:

The contribution margin will be higher for the company with the highest fixed expenses. Contribution margin = selling price - variable cost

For example:

Company A Company B

sales price per unit $100 $100

total costs per unit $80 $80

variable costs per unit $50 $40

<u>fixed costs per unit $30 $40 </u>

contribution margin $50 $60

4 0

3 years ago

An increase in the price of bread produced domestically will be reflected in:

Zina [86]

The increase will reflect in the GDP deflator and the Consumer price index.

The GDP Deflator is used to measure the level of prices of all new and domestically produced goods and services in an economy.

So, when there is an increase in price, the nominal GDP (Increased), so the GDP deflator Increased as well.

Consumer Price index is used to measure the inflated price of goods and services which are faced by all consumer households.

So, when there is an increase in price, there is change in CPI .

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3 0

3 years ago

The ability to read, understand, and analyze accounting reports and financial statements is critical in understanding ______.

Pie

Answer:

business operations

Explanation:

7 0

2 years ago

Units: Beginning Inventory: 34,000 units, 55% complete as to conversion. Units started and completed: 128,000. Units completed a

liq [111]

Answer:

the cost per equivalent unit of conversion is $3.49

Explanation:

The computation of the cost per equivalent unit of conversion is as follows;

= Total conversion cost ÷ equivalent units

where

total conversion cost is $608,150

And, the equivalent units is

= 162,000 units × 100% + 34,500 units × 35%

= 162,000 units + 12,075 units

= 174,075 units

Now the cost per equivalent unit of conversion is

= $608,150 ÷ 174,075 units

= $3.49 per unit

Hence, the cost per equivalent unit of conversion is $3.49

This is the answer but the same is not provided in the given options

3 0

3 years ago