How do public disclosure requirements protect consumers?

Atkinson Construction assembles residential houses. It uses a job-costing system with two direct-cost categories (direct materia

Oduvanchick [21]

Answer:

1. Compute the

(a) budgeted indirect-cost rate

$40 per labor hour

and (b) actual indirect-cost rate.

$42 per labor hour

Why do they differ?

Because total assembly support costs and labor hours were different.They both were actually lower than expected, but the labor hours were 9% lower while the costs were around 5% lower. That is why the actual rate increased (denominator decreased more than numerator).

2. What are the job costs of the Laguna Model and the Mission Model using (a) normal costing

Laguna Model Mission Model

assembly-support cost $38,800 $40,000

and (b) actual costing?

Laguna Model Mission Model

assembly-support cost $40,7400 $42,000

3. Why might Atkinson Construction prefer normal costing over actual costing?

The problem with actual costing is that they cannot be budgeted, you can only budget normal costing. Any business has to prepare budgets in order to control how their operations are being carried out and then they need to adjust them to the actual costs incurred.

Explanation:

Laguna Model Mission Model

Construction period Feb-June 2017 May-0ct 2017

Direct material costs $106,550 $127,450

Direct labor costs $36,250 $41,130

Direct labor-hours 970 1,000

budgeted indirect cost rate:

assembly-support costs $8,800,000

direct labor-hours 220,000

budgeted assembly-support cost per labor hour = $8,800,000 / 220,000 = $40 per hour

Laguna Model Mission Model

assembly-support cost $38,800 $40,000

actual indirect cost rate:

assembly-support costs $8,400,000

direct labor-hours 200,000

actual assembly-support cost per labor hour = $8,400,000 / 200,000 = $42 per hour

Laguna Model Mission Model

assembly-support cost $40,7400 $42,000

7 0

3 years ago

Suppose that the rural part of a country is hit by a major earthquake

stiv31 [10]

Answer:

(a) How this episode is likely to affect the economic well-being of people in the country

In the short-run, there will be an increase in labor demanded, increasing jobs to build homes and repair the damage caused by the earthquake. In the long-run, things will begin to go back to normal.

(b) How this episode is likely to affect the economy’s measured GDP

In this case, GDP measurements will shift causing less of an input in private spending and an increase in government spending due to subsidies to increase home-building.

6 0

3 years ago

Under an acceptable method of costing by-products, inventory costs of the by- product are based on the portion of the joint prod

saw5 [17]

Answer:

b. plus any subsequent processing cost.

Explanation:

In the case of the acceptable costing method for by-products the inventory cost that are depend upon the joint cost should be distribution to the by-product plus if there is any processing cost

that means

Inventory cost of the bu-product = joint cost + processing cost

Therefore the same should be considered

5 0

2 years ago

Which of the following BEST describes a company's proper liquidity management?

Naddika [18.5K]

Answer:

A. Liquidity management is a balancing act, managers try to find liquidity levels that are neither too high not too low.

Explanation:

Maintaining proper liquidity is an important financial objective of management. Proper liquidity management demands that an entity should be able to meet his short term financial obligation and making sure that liquid assets of the entity are not idle. In order to achieve this, the best way to go is to maintain a level that is neither too high and not too low. Not too high means the entity is not holding too much cash or liquid assets than it currently need to meet its short term financial obligation.

For example, not keeping too much cash in current account but investing them in interest-earning investment assets.

Not too low means the cash or liquid assets held by an entity should not less than the amount needed to meet its short term financial obligation. For example, making sure that the entity has enough cash or readily convertible liquid assets that can be used to pay vendors, rent, interest and meet other short term financial obligation.

Option B is false because keeping too much does not help to maximize short term earnings which is a feature of proper liquidity management. Option C is wrong because there is no guideline to support that deferring coupon payment won`t attract payment and this does not connote proper liquidity management.

Option D is obviously false and does not describe proper liquidity management.

4 0

3 years ago

Read 2 more answers

In the late 1950s and 1960s, television Westerns were extremely popular and included Gunsmoke, Bonanza, Wagon Train, and The Big

notsponge [240]

Answer: (C) Decline

Explanation:

The decline stage is one of the type of last stage in the product life cycle as it basically representing the actual behavior of the product in the market which results in the form of negative growth.

The decline stage basically demonstrating about the decrease sales and also the profit of the products in an organization.

According to the given scenario, the television western is one of the type of category that entering into the decline stage due to the change in the taste of the customers.

Therefore, Option (C) is correct answer.

7 0

3 years ago