Complete Question:
Pribuss Engineering prepares its financial statements according to International Financial Reporting Standards. During 2018, the company incurred the following costs related to a new product design:
Research for New Design $2.4M
DVMPT of New Product $1.3M
Patent Filing Fees $52K
The development costs were incurred after technological and commercial feasibility was established and after the future economic benefits were deemed probable. The project was successfully completed and the new product was patented before the end of the 2018 fiscal year. What amount should Pribuss expense in its 2018 income statement related to the above expenditures?
Answer:
The Research expenses of $2.4M that are written as expense in the Income statement and the Development costs of $1.3M and patent legal fees of $53k are capitalized.
Explanation:
The reason is that the International Standard IAS 38 Intangible Assets says that the expenditure incurred on the research that hasn't entered development phase must be written as expense in the year and the expenditure incurred on the development phase of the research outcomes must be capitalized to the extent it is ready for use. In this case $1.3M is clearly a development cost and patent legal fees of $53k is the expenditure that will prepare the asset and making it ready for use, so it must also be capitalized.
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Answer:
$216
Explanation:
Calculation to determine What would be the transfer price if Division A uses full cost plus markup
Using this formula
Transfer price = Direct Material + Direct Labor + Variable Overhead + Fixed Overhead
Let plug in the formula
Transfer price = (70 + 40 + 20 + 30)+(70 + 40 + 20 + 30*35)
Transfer price = 160+(160*35%)
Transfer price = 160 + 56
Transfer price = 216
Therefore What would be the transfer price if Division A uses full cost plus markup is $216
Answer:
The answer is "Option E".
Explanation:
Please find the complete question in the attached file.
Varied portfolios and mixes of diversified assets get a different relationship, eliminating uncontrolled danger and only risk premium. Its total risk is a combination of non - systematic and systematic risks. Therefore, the diversification principle reduces some portion of the risk profile, and that is why distributing an investment across a range of varied assets reduces some of the risk profile.
