Answer:
Cost tracing is important because it helps a firm to make wise decisions.
Explanation:
Cost tracing can be defined as the process of matching a cost directly with a product being produced.
Variable cost that are accompanied with inventory are direct materials, direct labour and variable manufacturing overheard. the variable manufacturing overheard flunctuates based on amount of production. example is cost of electricity and gas.
Variable costing can also be used in determining cost-volume-profit relationships. This cost-volume-profit analysis aids managers in comprehending the minimum amount of inventory they need to produce to break even on their cost.
Variable costing can also be used in valuing inventory which makes it easier to compare the profitability of a product.
Absorption costing on the other hand, is advantageous for a small business because it complies with GAAP ( Generally Accepted Accounting Principle).
Absorption costing systems are easy to setup and less complicated than other costing systems. but the drawback of absorption costing is the way they handle fixed overheard cost.
Answer:
The cost of goods sold for last year was $795,000
Explanation:
Last year, in Jasper Company, beginning and ending inventories of work in process and finished goods equaled zero. Therefore,
The cost of goods sold for last year = Total cost of units were produced = Direct materials + Direct labor + Manufacturing overhead
Jasper Company had Direct materials of $180,000, Direct labor of $505,000, Manufacturing overhead of $110,000
The cost of goods sold for last year = $180,000 + $505,000 + $110,000 = $795,000
Answer: Debit to Raw and In Process Inventory $ 110,000
Credit to Accounts Payable $ 110,000
Explanation:
Budgeted Conversion Cost = $ 244,720
Total Production hours = 3,800 hours
Material cost per unit = $ 50 per unit
Material purchase for 2,200units (50 x 2,200) = $ 110,000
Journal to record purchase of raw material for 2200 units at $50
Accounts title and explanation Debit Credit
Raw and In process Inventory $ 110,000
Accounts Payable $110,000
Answer:
The correct option is E ,all investors are fully informed,are rational and are mean-variance optimizers
Explanation:
The Capital Asset Pricing Model is used in analyzing investment opportunities to determine the required rate of return for a given level of risk.The higher the risk the higher the investor's return as a compensation for taking higher risk.
The model assumes that there is free access to information,hence investors are well informed.
They are also rational since they demand for return depending on the risk to be taken.
Finally,they try as much as possible to put invest where it is most profitable,hence they mean-variance optimizers.