Answer:
C. Variable inflation is associated with high transaction costs
Explanation:
Because of uncertainty about future inflation, it may not uncertain relative to its price change. Therefore, option A is not correct.
In order to maximize financial position, inflation harms borrowers and helps lenders, so option B is also incorrect.
Option C is correct because variable inflation is associated with high transaction costs in order to maximize the financial position. For example, if the inflation rate is 5% during first quarter, the price level is not much to disrupt the financial position. Again, in the next quarter, if the inflation rate changes to 4%, the position will be effective more. However, if it increases, it will not affect too much.
Answer:
0.1333
Explanation:
Given that,
Selling price = $5
Variable cost = $3
Annual sales = $20,000
Total sales = $60,000
Contribution margin:
= Selling price - Variable cost
= $5 - $3
= $2
Number of units sold:
= Annual sales ÷ Selling price
= $20,000 ÷ $5
= 4,000 units
Total contribution sales:
= Number of units sold × Contribution margin per unit
= 4,000 units × $2
= $8,000
Weighted contribution:
= Total contribution sales ÷ Total sales
= $8,000 ÷ $60,000
= 0.1333
Answer:
a. Variable costing income from operations <u>is greater than </u>absorption costing income from operations.
b. $870,000
Explanation:
a. Under Variable costing, only the variable manufacturing costs are apportioned to the units produced.
Cost under Variable costing are;
= 114 * 14,500
= $1,653,000
Under Absorption Costing, both fixed and variable costs are apportioned to the units produced.
Cost therefore is;
= (114 + 60) * 14,500
= $2,523,000
Variable costing income from operations is greater than absorption costing income from operations because Absorption costs yields more cost.
b.= Absorption cost - Variable cost
= 2,523,000 - 1,653,000
= $870,000
<em>Variable costing income from operation will be $870,000 higher than Absorption costing income from operations.</em>
it depends what it is for
