Answer:
False
Explanation:
It is 'Incremental cost allocation method' that ranks the individual users of a cost object in order of users most responsible for a common cost (the most responsible will be primary user) and then uses these rankings to allocate the costs among the users (incremental users).
Stand-alone cost allocation method allocates cost proportionately among all users based on a basis which relates to each users proportion of the total. For example the basis could be proportion of sales of responsibility centers to total sales of organization.
Answer:
C) 4.2 years
Explanation:
The computation of the payback period is as follows;
As we know that
Payback Period = Initial cost ÷ Annual net cash flow
Here
Initial cost = $278000
Annual net cash flow = Incremental after tax + Depreciation per year
where,
Depreciation per year = (Original cost - Salvage value) ÷ Estimated Life
= ($278,000 - $30,000) ÷ 8 years
= $31,000
Annual net cash flow is
= $35000 + $31000
= $66000
So,
Payback Period is
= $278000 ÷ $66000
= 4.2 Years
Answer:
$3,500
Explanation:
Under variable costing method, product costs are calculated on variable manufacturing costs only.
Step 1 : Determine unit Product Cost
Product Cost = Variable Manufacturing Costs
= $ 35
Step 2 : Determine the units in Inventory
Units in Inventory = Opening Stock + Production - Sales
= 0 + 7,210 - 7,110
= 100 units
Step 3 : Determine Inventory value
Inventory value = Units x Cost per unit
= 100 units x $ 35
= $3,500
Conclusion :
the ending inventory of finished goods under variable costing would be: $3,500
Answer:
b-the costs incurred to process the units to this point
Explanation:
Since in the question it is given that the company want to decide whether to sell partially completed goods or should incurred extra cost in order to finished the goods and sells them as a completed unit
So there should be the decision regarding selling price for the units that are completed, the selling price for the units that are partially completed and the cost i.e to be incurred for finishing the units
