What are the five C's of credit?

An asset was purchased for $126,000 on January 1, Year 1, and originally estimated to have a useful life of 8 years with a resid

katrin [286]

Answer:

The correct answer is $23,663

Explanation:

Spreadsheet is attached with the calculus.

Depreciation expense is the difference between the cost of the asset and the residual value, divided by the useful life of the asset.

Depreciation expense=(original cost-residual cost) /useful life

In this case, conditions change at third year. First, we must calculate the depreciation expense with the first situation. The first 2 years , we are going to decrease the asset value with this depreciation expense.

Situation 1 Depreciation expense 14375

At third year , we must recalculate the depreciation expense. The final value of second years is the new "original value".

Situation 2

Original Value 97250

Residual Value 2600

Useful life 4

Depreciation expense= (97250 - 2600 )/4

Depreciation expense= 23,663

Download xlsx

4 0

3 years ago

A business manager finds that the building expense each month is completely uncorrelated with revenue levels. What should the bu

Westkost [7]

Answer:

The business manager should assume that the building expense is fixed.

Explanation:

Fixed costs are not correlated with the revenue levels. Within the relevant range, fixed costs remain constant. They do not vary with the activity levels as variable costs do. For example, a manufacturer must pay for rent, repairs and maintenance, and utility bills irrespective of the revenue levels at which it is operating. This is why the business manager always discovers that the building expense each month does not correlate with the revenue levels, unlike the product's variable costs.

3 0

3 years ago

The budget for the month of May was for 11,200 units at a direct materials cost of $19 per unit. Direct labor was budgeted at 28

rjkz [21]

Answer:

Direct labor price(rate) variance = $1,675 (unfavorable)

Direct labor efficiency variance = 0

Explanation:

As per the data given in the question,

Number of units = 11,200

cost = $19 per unit

Labor budgeted = at 28 minutes per unit

Total budget = $100,800

Actual output = 8,900 units

Direct material expense = $137,500

Direct labor expense = $81,775

As per the following formula,

Direct labor price variance = (Actual price - Standard price) × Actual hour

= ($81,775 ÷ 8900 × 2 - $100,800 ÷ 11,200 × 2) × 8,900 ÷ 2

= $1,675 (unfavorable)

Direct labor efficiency variance = (Actual hour - Standard hour) × Standard price

= (8,900 × 28 ÷ 60 - 8,900 × 28 ÷ 60 ) × $100,800 ÷ 11,200 × 2

= 0

5 0

4 years ago

Marcy and Liz developed a new jewelry design. They were fortunate to get the attention of a large online retailer who was willin

snow_tiger [21]

Answer: Exclusive distribution

Explanation:

Exclusive distribution is defined as the agreement in which a parties involved are manufacturer and distributor.It states that the particular distributor cannot sell their service or item to any other party .It binds the agreement that product can be sold to the exclusive distributor.

According to the situation mentioned in the question, designers are asked for exclusive distribution by the retailer.Retailer does not wants that design of jewelry to be sold through any other source or retailer for effective sale.Thus agreement upon this matter is proposed by the retailer.

6 0

3 years ago

Suppose that Verizon Wireless has hired you as a consultant to determine what price it should set for calling services. Suppose

Feliz [49]

Answer:

If Verizon charges an optimal two-part price thenconsumer surplus will be zero.

Explanation:

Given a competitive market the consumer surplus will be the area of the demand curve above the market price

This is, between the intersection point with Y axis and a parallel at market price. Ofter represent as a triangle

If a monopolistic company maximize profit It will decrease this consumer surplus as much as it can to gain it from itself.

First it will set price equal to his marginal revenue.

Then, if possible it will charge two tariff a fixed component and a variable component per usage This will extrac all consumer surplus in favor of the firm leaving a consumer surplus of zero.

If Verizon charges an optimal two-part price thenconsumer surplus will be zero.

3 0

3 years ago