Neha is writing a report comparing the profits of three fashion design houses What type of organizational method should she use?
1 answer:
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Answer:
$222,100
Explanation:
Cost = $837,300
Residual value = $84,000
Useful life = 9 years
Now,
Annual straight line depreciation =
Annual straight line depreciation =
Annual straight line depreciation =
Annual straight line depreciation = $83,700
Accumulated depreciation for three years i.e., 2018, 2019 and 2020 would be:
Accumulated depreciation = 3 × $83,700
Accumulated depreciation = $251,100
Book value (at the end of year 2020) = Cost - Accumulated depreciation
Book value (at the end of year 2020) = $837,300 - $251,100
Book value (at the end of year 2020) = $586,200
Revised useful life = 5 years
No. years asset has been used = 3 years
Remaining useful life = 2 years
Revised salvage value = $142,000
Therefore, depreciation expense for the remaining three year would be:
Revised depreciation expense =
Revised depreciation expense =
Revised depreciation expense =
Revised depreciation expense = $222,100
Answer:
d. Selling Price
Explanation:
Break even point is calculated as
Thus, break even point in units only in two cases,
- Fixed cost is reduced that is decreased,
- Contribution per unit is increased.
Now, here the options are
a. Increase in units sales volume is of no relevance as will not impact the fixed cost or contribution per unit.
b. Increase in fixed cost will result in higher break even point, as numerator in the fraction will increase.
c. Increase in unit variable cost will ultimately decrease the contribution thus, it is of no relevance.
d. Increase in selling price will increase the contribution per unit, that is the increase in denominator value in fraction, thus, break even units will decrease.
Correct option is
d. Selling Price