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1 year ago

Only variable costs can be differential costs. Do you agree? Explain.

Business

1 answer:

Nostrana [21]1 year ago

5 0

I do not agree with the given statement that is "Only variable costs can be differential costs.".

The difference in the costs of two alternative decisions is referred to as differential cost.

When a company is faced with several similar options, it must make a decision by selecting one and discarding the other.

Variable costs in cost accounting are costs that vary according to how much a company produces.

Variable costs are typically proportional to output.

As a result, the cost difference between two alternatives, rather than the fixed and variable nature of costs, is relevant for decision-making.

Hence, I disagree with the statement given in the question.

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The December 31, 2018, adjusted trial balance for Fightin' Blue Hens Corporation is presented below.Accounts Debit CreditCash $1

zepelin [54]

Answer:

These can be prepared as shown below:

Explanation:

1. Prepare a statement of stockholder equity for the year ends December 31, 2018, assuming no common stock was issued during 2018.

To do this, the income statement is first prepared by ignoring tax as follows:

Fightin' Blue Hens Corporation

Income Statement

for the year ended December 31, 2018.

Details $

Service Revenue 300,000

Salaries Expense (200,000)

Rent Expense (10,000)

Depreciation Expense (20,000)

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Earnings for the year  67,000 

Therefore, we have:

Fightin' Blue Hens Corporation

Statement of Stockholder Equity

for the year ends December 31, 2018

Details $

Common stock 100,000

Retained Earnings 40,000

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Stockholder Equity 207,000

2. Prepare a classified balance sheet as of December 31, 2018.

A balance sheet is a balance sheet that have different classifications suchas fixed assets, current assets and liabilities, long-term liabilities, and stockholder equity. This can be prepared as follows:

Fightin' Blue Hens Corporation

Classified Balance Sheet

for the year ends December 31, 2018

Details $ $

Fixed Assets

Equipment 200,000

Accumulated Depreciation (115,000)

Net Fixed Assets 85,000

Current Assets

Cash 10,000

Accounts Receivable 130,000

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Supplies 20,000

Total current assets 164,000

Current Liabilities

Accounts Payable (10,000)

Salaries Payable (9,000)

Interest Payable (3,000)

Working capital 142,000

Long-term Liabilities

Notes Payable (due in two years) (20,000)

Net Total Assets  207,000

Financed by:

Common stock 100,000

Retained Earnings 40,000

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Stockholder Equity 207,000

Note: When a balance sheet is accurately prepared, the net total assets and the stockholder equity must be equal as above with both equaling $207,000.

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3 years ago

On time transport verified that it had a receipt showing that 2,000 air filtration units had been delivered to its warehouse. Wh

melisa1 [442]

The bill of lading is the type of receipt that provides information showing that 2,000 air filtration units had been delivered to its warehouse.

<h3>What is a bill of lading?</h3>

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9 months ago

Which estimating technique uses a statistical relationship to calculate cost or duration based on historical data and other proj

Yuliya22 [10]

Answer:

parametric estimating

Explanation:

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2 years ago

What are the forces that together comprise the invisible hand?

nalin [4]

The answer to the question asked above are self-interest, competition, and supply and demand, it was noted for having the capaility of allocating resources in society.

Hope my answer would be a great help for you. If you have more questions feel free to ask here at Brainly.

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3 years ago

Read 2 more answers

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hoa [83]

Answer:

Diseconomies of Scale

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On the contrary to economies of scale which save costs when production levels go up, diseconomies of scale make costs go higher when their is an increase in the size of the organization.

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2 years ago