Answer:
value of ending inventory under variable production is $104375
Explanation:
given data
Variable production costs = $12.50 per unit
variable selling and administrative expenses = $3.50 per unit
Fixed manufacturing overhead totals = $41,000
Fixed selling and administration expenses total = $45,000
production = 4,500 units
sales = 3,850 units
to find out
the dollar value of the ending inventory under variable costing would be
solution
we find here ending inventory that is express as
ending inventory = production - sale
ending inventory = 4500 - 3850
ending inventory = 8350
so
variable production cost of 8350 units are
variable production cost = 8350 × $12.50
variable production cost = $104375
so value of ending inventory under variable production is $104375
Answer: Marginal revenue is equal to price times quantity
Explanation:
A perfectly competitive market is a market where there's a large number of both the producers and the consumers have full and symmetric information.
In a perfectly competitive market, the marginal revenue is the same as price and the marginal revenue curve is the same as the demand curve facing sellers.
It should be noted that the statement that the marginal revenue is equal to price times quantity is incorrect. The total revenue is equal to price times quantity.
Answer:
Debit : Bad Debts account : $2000 (appearing in the income statement)
Credit : Provision for doubtful debts account : $2000 (appearing in the balance sheet)
Explanation:
This is an example of provision for doubtful debts. Provision for doubtful debts is an estimated amount of bad debts from accounts receivables that has been issues but not yet collected. This is done under the accrual accounting concept where an expense is identified as soon as invoices have been issued rather than waiting long periods to find out which invoice is irrecoverable. It is typically an estimate based on past experience.
In this question, the sales value has not been provided, hence an assumption is made:
Sales : $200,000
If provision for doubtful debts is 1% of sales and all sales is on credit, then the provision for doubtful debts amount is = 1% x $200,000 = $2000
Provision for doubtful debts is an accounts receivable contra account and thus has a credit balance and is recorded in the balance sheet, listed directly under accounts receivables.
The entry is recorded as:
Debit : Bad Debts account : $2000 (appearing in the income statement)
Credit : Provision for doubtful debts account : $2000 (appearing in the balance sheet)
Answer:
(a) Operating activity
(b) Financing activity
(c) Operating activity
(d) Investing activity
Explanation:
Basically there are three types of activities:
1. Operating activities: It includes those transactions which affect the working capital, and it records transactions of cash receipts and cash payments.
2. Investing activities: It records those activities which include purchase and sale of the fixed assets
3. Financing activities: It records those activities which affect the long term liability and shareholder equity balance.
So,
(a) Increase in accounts receivable come under the operating activities, and this is to be in a negative amount
(b) Issue of preference shares comes under financing activity, and this is added while computing the financing activities
(c) The depreciation expenses are added in the net income whereas the bond premium amortization is to be deducted from the net income. These both items have come under operating activities
(d) An increase in land value comes under the investing activity.
