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3 years ago

When applying the lower of cost or market rule to inventory valuation, market generally means?

1 answer:

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The term that is being referred here is the REPLACEMENT COST. What the market generally means when lower of cost or market rule is being applied to inventory valuation, this refers to replacement cost. This is the cost applied to an item when it is being replaced. The cost is being applied is the same as its pre-loss condition.

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Windsor Industries acquired two copyrights during 2017. One copyright related to a textbook that was developed internally at a c

Art [367]

Answer:

Balance sheet extract:

Intangible assets:

Explanation:

The points to note in the question are enumerated as follows:

An internally generated intangible asset cannot be capitalized.By capitalization ,I mean its costs is treated as intangible asset to be amortized over its useful life.As a result,the $16,000 incurred on the internally generated intangible asset,specifically,the first copyright should be treated as expense when incurred.

However,the second copyright that was bought from University Press can be treated as asset but cannot be amortized since it has indefinite life,but would be tested for impairment on a yearly basis,with impairment losses charged to profit or loss account.

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3 years ago

Night Shades, Inc. (NSI), manufactures biotech sunglasses. The variable materials cost is $11.13 per unit, and the variable labo

dolphi86 [110]

Answer:

Part a. What is the variable cost per unit?

Variable Cost per Unit is $ 11.13+ $ 7.29 = $18.42

Part b. What are the total costs for the year?

Production for the year is 190000 units

Calculation of Total Production = Variable costs + Fixed Costs

= 190000 units × $18.42 + $875,000

=$ 4,374,800

Part c. If the selling price is $44.99 per unit, does the company break even on a cash basis?

The Company Breaks Even when

Total Sales Revenue = Total Production Costs

Total Sales Revenue = $44.99 × 190000

= $ 8,548,100

Total Sales Revenue $ 8,548,100 > Total Production Costs $ 4,374,800

Therefore Company does break even on a cash basis

Part c. If depreciation is $435,000 per year, what is the accounting break-even point?

Total Production Costs = $4,374,800+$435000

= $4,809,800

Therefore accounting break-even point is $4,809,800 Sales

Explanation:

Part a. What is the variable cost per unit?

Variable Cost are costs which Vary with the level of Activity.

Part b. What are the total costs for the year?

Calculation of Total Production Costs= Variable costs + Fixed Costs

Part c. If the selling price is $44.99 per unit, does the company break even on a cash basis?

Break-Even Point is the Point when the company neither makes a profit or a loss

Total Sales Revenue $ 8,548,100 > Total Production Costs $ 4,374,800

Therefore Company does break even on a cash basis

Part c. If depreciation is $435,000 per year, what is the accounting break-even point?

In simple terms the break even point in Sales Revenue is equal to all Variable plus fixed costs

5 0

3 years ago

svlad2 [7]

Answer:

Allocative efficiency is about distributing or allocating resources in the best possible manner. E.g. in order to fight the current pandemic, more resources ($) is allocated to different health care institutions.

Productive efficiency is about how a company or a person uses the resources that it has in order to produce the greatest amount of benefits at the lowest possible cost. E.g. in a hospital, if a doctor is able to treat 15 patients per day, his/her productive efficiency will be higher than another doctor that only treats 10 patients per day.

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3 years ago

QUESTION 11 Given the following information, calculate the equity dividend rate for this investment: first-year NOI: $18,750; be

Alja [10]

Answer: D. 2.2%

Explanation: Equity Dividend Rate is calculated by dividing the Before Tax Cash Flow by the Acquisition price. If you need the answer in percentage form, you then multiply by 100.

Here, before-tax cash flow = $11,440

Acquisition price = $520,000

So Equity Dividend Rate = $\frac{11440}{520000}$ X 100

Equity Dividend Rate = 2.2%

In this question, you do not need the Net Operating Income (NOI). You only need the NOI if the Before Tax Cash Flow is not given and the debt service payment is. If this is the case, you subtract the debt service payment from the NOI to get the Before Tax Cash Flow.

4 0

4 years ago

On January 1, Year 1, Friedman Company purchased a truck that cost $35,000. The truck had an expected useful life of 200,000 mil

Svetradugi [14.3K]

Answer:

$4620

Explanation:

Activity method based on hours worked = (hours worked that year / total hours of the machine) x (Cost of asset - Salvage value)

33,000 / 2000,000) x ($35,000 - $7000) = $4620

3 0

3 years ago