Answer and Explanation:
Respected Sir,
Sub: Absorption costing to analyze product costs and subsequent cost-volume-profit decisions
As per your requirement please find the explanation below:
Absorption costing is a process by which we add part of the fixed overhead to the production expense of the goods. If we do on a per-unit basis. Here we will compute by dividing the fixed costs by the number of units that we built and sold over the era. Whereas Variable costing includes fixed overhead as a lump sum instead of a per-unit price.
Under this process, all your variable costs like equipment, raw materials, and shipping are included. We will add the maximum fixed overhead costs for the duration. Such costs are not calculated on a per-unit basis. Rather than we deduct them as a lump-sum expense from your income amount.
Variable costing is really useful as it reveals the earnings after all the expenses are paid for the accounting period. While you would not have earned revenue for the goods we purchased as some may be in the inventory, we are showing you have paid all of your expenses for the time. We have excess revenue when you actually sell the finished goods in the warehouse.
The absorption approach is not all that effective as absorption costing will inflate the income figures excessively in any given span of accounting. Since you're not going to subtract any of your fixed costs as we did not sell any of us produced goods, our profit and loss report doesn't reflect the maximum expenses you've had for the time. Therefore, these results may mislead us when our profitability is analyzed.
Regards
ABC
Book Value Of Asset
Book Value of Assets is the asset's value in the books of records of a company or an institution at any given instance.
Assets Book Value Formula = Total Value of an Asset – Depreciation – Other Expenses
Book Value Of Asset is
and the fair value of asset exchanged is
As there is a change in the value, this substance exists in the transaction.
Commercial substance exists in business transactions where the outcome is anticipated to change the company's cash flows in the future and is considered only when there is a significant alteration in the risk of cash inflow, the timing of cash inflow, and the amount paid as a result of the transaction.
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Answer:
The correct answer is B.
Explanation:
Giving the following information:
The current price of a market basket of goods is $2,500 and the base year price of the same market basket is $2,000.
To calculate the price index we need to make a simple division:
Price index= P1/P0
PI= 2,500/2,000= 1.25*100= 125%
The objective of <u>Fact-finding</u> is to gather data about project usability, costs, benefits, and schedules.
<h3>What is a fact finding process?</h3>
Fact-finding is known to be a kind of a non-binding process or an act that entails a qualified impartial third party that tends to make some written findings of fact as well as recommendations for the solving or handling of any issue.
Note that All costs incurred of fact-finding are borne by the employer and the union and as such, The objective of <u>Fact-finding</u> is to gather data about project usability, costs, benefits, and schedules.
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