The more ____ involved with delivering a service, the greater the degree of heterogeneity.

The cost principle relates most closely to the ______.

xeze [42]

The recognition point

4 0

3 years ago

Spin Cycle Architecture uses three activity pools to apply overhead to its projects. Each activity has a cost driver used to all

hammer [34]

Answer:

a. predetermined overhead rate for each activity

initial concept formation = $3,310 per Project Change

design = $3 per Square feet

construction oversight = $1,130 per Month

b. Classification

unit-level activities :

design

batch level activities :

initial concept formation

Product level activities :

design

Facility level activities :

initial concept formation

construction oversight

Explanation:

This question requires application of Activity Based Costing (ABC) method of allocating overheads.

For each overhead a rate is determined as follows :

initial concept formation

Predetermined overhead rate = Overhead Cost / Number of Project Changes

= $52,960/ 16

= $3,310 per Project Change

design

Predetermined overhead rate = Overhead Cost / Square feet

= $420,000/ 140,000

= $3 per Square feet

construction oversight

Predetermined overhead rate = Overhead Cost / Number of Months

= $118,650/ 105

= $1,130 per Month

Classification

The way the activity is to be absorbed in costing determine its classification

5 0

3 years ago

Blue Corporation manufactures drones. On December 31, 2019, it leased to Althaus Company a drone that had cost $156,000 to manuf

Sauron [17]

Answer:

See the journal entries below.

Lease receivable = $235,757.58

Explanation:

Before the journal entries are prepared, the present value of the annual rentals or lease receivable is first calculated using the formula for calculating the present value of an ordinary annuity due since the annual rentals is payable each December 31, beginning December 31, 2019 as follows:

PV = P * ((1 - (1 / (1 + r))^n) / r) * (1 + r) …………………………………. (1)

Where;

PV = Present value annual rentals or lease receivable = ?

P = Annual rentals = $52,800

r = Interest rate = 6%, or 0.06

n = number of years the lease agreement covered = 5

Substitute the values into equation (1), we have:

PV = $52,800 * ((1 - (1 / (1 + 0.06))^5) / 0.06) * (1 + 0.06)

PV = $235,757.58

The journal entries will now look as follows:

Date Account Tittle Debit ($) Credit ($)

31-Dec-19 Lease Receivable 235,757.58

Cost of Goods Sold 156,000.00

Sales Revenue 235,757.58

Inventory 156,000.00

(To record the lease.)

31-Dec-19 Cash 52,800.00

Lease Receivable 52,800.00

(To record the receipt of lease payment.)

7 0

3 years ago

Windsor, Inc. just took its physical inventory. The count of inventory items on hand at the company’s business locations resulte

svp [43]

Answer:

Actual Inventory $ 343640

Explanation:

FOB Shipping point means as soon as the goods are sold they are the buyer's property and must be excluded from the inventory.

FOB destination means that the goods are the seller's property and responsibility unless the goods reach the destination. They are included in the seller inventory unless the buyer gets them.

Inventory sent on consignment is also counted in the cosigner's inventory.

The inventory costing $20,800 that was sold on December 28, terms FOB shipping point will not be included in the seller's inventory. They are now the buyer's responsibility.

Windsor, Inc

Inventory Stock Count on 31 Dec $301,000

Add inventory sent on consignment $29,120

Add Inventory purchased FOB shipping $13,520

Actual Inventory $ 343640

8 0

3 years ago

TPW, a calendar year taxpayer, sold land with a $535,000 tax basis for $750,000 in February. The purchaser paid $75,000 cash at

statuscvo [17]

Answer:

Explanation:

Amount realized on sale:

Cash $75,000

Purchaser’s note 675,000

$750,000

Adjusted basis (535,000)

Gain realized on sale $215,000

b. $215,000 gain realized ÷ $750,000 contract price = 28.67% gross profit percentage.

Cash received in year of sale:

Cash at closing $75,000

August principal payment 33,750

$108,750

Gain recognized (108750*28.67%) $31,179

A. Book gain $215,000

Tax gain (31,179)

Book/tax difference $183,821

B. $183,821 × 35% = $64,338 deferred tax liability

The excess of book gain over tax gain is a favorable difference.

6 0

4 years ago