This is known as a service agreement. A service agreement is used by companies who want to have a transaction with service providers in order to avail of their services. This is to ensure that both of the parties involved agree on each other terms and that there will be no confusion or conflict.
Answer:
$48,100
Explanation:
Computation of total manufacturing cost incurred during the year is seen below;
Direct materials used
$13,700
Direct labor used
$27,700
Total factory overhead
$6,700
Total manufacturing cost incurred
$48,100
Therefore, the total manufacturing cost incurred during the year is $48,100
Answer:
d. If the manager invests in the additional project, residual income of the division will increase.
Explanation:
RI = Operating Income - (Operating Assets x Minimum Required Rate of Return)
with adding the additional project
Operating Income: $60000 +6000 =$66000
Operating Assets: $375000+$40000 =$415000
Residual income =$66000-14%*$415000 =$7900
Consider the attached information.
