Indicate whether the following costs of procter & gamble (pg), a maker of consumer products, would be classified as direct m
1 answer:
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Answer: 1. Goodwill
2. a. Record no entry in the books
b. Record a loss in the books
Explanation:
1. The Special asset created by Heartland Telecom's acquisition of Surety Wireless is Goodwill.
Goodwill is the difference between what the company was worth and what it was purchased for if the purchase price was higher than the worth (market value).
2. a. Goodwill should be accounted for by recoding it in the Long term Assets under Intangible Assets in the balance sheet. It should not be amotrized. If Goodwill increases, there should be no recording this <u>gain</u> on the books.
b. If the value of the asset has decreased, Heartland should record a loss in the books to represent the loss on this account.
Answer:
Contribution margin per unit = $45.90
Contribution margin as sales percentage = 43.97%
Explanation:
As for the information provided we have,
Normal Sales = Normal sales per month, before the overseas order.
For such normal sales, the cost and sales data has been provided,
Selling price per unit = $104.40
Variable costs = Direct material + Direct Labor + Variable Manufacturing + Variable selling & Administrative
= $43.80 + $10.40 + $1.90 + $2.40 = $58.50
Contribution margin per unit = Selling price - Variable cost per unit = $104.40 - $58.50 = $45.90
Contribution margin as sales percentage = 43.97%