Answer:
1)
cost of making (14000*22) = 308000
cost of buying (14000*(18+6)) = 336000
Difference cost = 28000
2)
No, Since, there is not other use of fixed cost, therefore, fixed cost will be a part of cost of buying.
3-a)
cost of making (14000*22) = 308000
cost of buying (14000*18) = 252000
3-b)
Yes, Since, there is other use of fixed cost, therefore, fixed cost will not be a part of cost of buying.
These gains and losses may be described or classified as either operating or nonoperating, depending on their relation to an entity's major ongoing or central operations.
<h3>What does Conceptual Framework say about profit and loss?</h3>
- The Exposure Draft proposed that, because profit or loss is the primary source of information about an entity's financial performance for the period, the framework should include a presumption that all income and all expenses will be included in that statement.
- The FASB's conceptual framework classifies gains and losses based on whether they are related to an entity's major ongoing or central operations.
- Nonoperating are “other” gains and losses.
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Sales forecasts <u>help auditors understand </u><u>management's strategy</u>
<u>can be used in valuing </u><u>inventory</u>
<u />
What are sales forecasts?
A sales forecast is an indication of predicted sales revenue. What your business expects to sell during a specific time period is estimated by a sales forecast (like a quarter or year). The most accurate sales projections do this. By providing knowledge of the probable behavior of your most valued clients, sales forecasting aids in achieving this revenue efficiency. In addition to enhancing pricing, advertising, and product development, you may forecast future sales. The ability of your business to predict future revenues across particular time periods in order to better manage resources is one of the benefits of sales forecasting.
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Answer:
The correct answer is 10.72% ( Approx.).
Explanation:
According to the scenario, the given data are as follows:
Debt ratio = 46.5%
Capital intensity ratio = 2.51 times
Profit margins = 21%
Dividend payout = 38%
Formula to calculate sustainable growth rate ae as follows:
Sustainable growth rate = (Earnings retention rate × Return on equity ) / ( 1 - (ROE × RR)
where, Retention rate =(1 - dividend payout rate)
= (1-0.38) = 0.62
ROE = Profit margin × Total asset turonver × Equity multipler
= Profit margin × 1/capital intensity ratio × 1/(1-debt ratio)
= .21 × (1/2.51) × 1/(1-.465)
= .21 × 0.398 × 1.869
= 0.1562
=15.62%
So, Sustainable growth rate = (0.1562*0.62) / 1 - (0.1562*0.62)
= 0.096844 / 0.903156
= 0.1072
= 10.72% (approx.)
Hence, the correct answer is 10.72% (approx.).