Answer:
$105,260 lower than under absorption costing
Explanation:
The computation of the net operating income for the year is shown below;
Change in units in inventory is
= Units produced - Units sold
= 30,140 units - 24,600 units
= 5,540 units
Now the fixed overhead per unit is
= Fixed manufacturing overhead ÷ Units produced
= $572,660 ÷ 30,140
= $19 per unit
Now the total amount would be
= 5,540 units × $19 per unit
= $105,260
Since the units produced is more than the units sold that means the net income under absorption costing is more than the net income under variable costing
hence, $105,260 lower than under absorption costing
Answer:
The firm must save $45,172.02 monthly for 24 months to be able to pay $1,130,000 at 4.3% compounded monthly as found in the attached
Explanation:
In calculating the monthly saving , I used the PMT function in excel,whose formula is given as PMT(rate,nper,pv,-fv)
r represents the rate on the savings given as 4.3% annually but 0.36% per month (4.3%/12 months), as the compounding is done monthly.
nper represents the duration of savings,given as two years but multiplied by 12 months to reflect monthly compounding horizon
pv is the present value zero as it is not given and not required
Fv is future value given as $1,130,000
Find detailed computation in the attached.
Answer:
The company should increase the number of units she is producing
Explanation:
Since the elasticity of demand for the product is greater than one (1.4), it means the demand for the new drug is elastic, meaning the demand for the new drug is sensitive to price – the higher the price, the lower the quantity demanded and the vice-versa. So the pharmaceutical company should be careful of charging higher than the other competitors.
What the company needs to do to increase its revenue is to produce large quantity of the drug in order to earn higher and gain larger market share and probably economies of scale.
For example, If the company produces 400 units of the drug at $2, the revenue will be $800.
To increase the revenue, the company needs to increase its production.
For example, the increases the production to 500 units at the prevailing price of $2, therefore, the revenue will be $1000
False should be the answer
Answer:
Othello company understated its inventory by $20,000 at December 31 2017
This error was not corrected In 2017 or 2018
Therefore as a result of this Othello stockholder equity was understated in the year 2014, December 31 and properly stated at 2015, December 31
