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2 years ago

LO 2.2Which of the following are prime costs?

Business

1 answer:

sesenic [268]2 years ago

4 0

Answer:

OPTION D: Direct Labor and Direct Material

Explanation:

Prime cost of a product is defined as the direct costs of producing a product including direct material costs and direct labor costs. Any other manufacturing overheads, indirect expenses and indirect materials/labor cost are not included in the calculation of PRIME COSTS .

Prime Cost = Direct Material Cost + Direct Labor Cost

Therefore, OPTION D: direct Labor and direct materials is the correct definition of prime costs.

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On January 1, Hillcrest Co. acquired a 40% interest in Preston, Inc. with the excess of purchase price over book value solely at

olasank [31]

Answer:

C. $190,000

Explanation:

As per the given question the solution of Income reported on Income statement is provided below:-

here, we ill find first share in equity income and depreciation expenses on undervalue equipment to reach the i ncome reported on Income statement

Share in equity income = Net income × Interest

= $500,000 × 40%

= $200,000

Depreciation expenses on undervalue equipment = undervaluation ÷ Number of years × Interest

= $250,000 ÷ 10 × 40%

= $10,000

Income reported on Income statement = Share in equity income -Depreciation expenses on undervalue equipment

= $200,000 - $10,000

= $190,000

4 0

2 years ago

Journalize the following transactions in the accounts of Sedona Interiors Company, a restaurant supply company that uses the all

Vaselesa [24]

Answer:

The journal entries are made below;

Explanation:

May 1. Account Receivable-Beijing Palace Co. Dr.$18,900

Sales Revenue Cr.$18,900

Cost of Goods Sold Dr.$11,200

Inventory Stock Cr.$11,200

Aug 30. Cash Dr.$8,000

Bad Debt Expense Dr.$10,900

A/R-Beijing Palace Co. Cr.$18,900

Dec 8. A/R Beijing Palace Dr.$10,900

Bad Debt Expense Cr.$10,900

Cash Dr.$10,900

A/R Beijing Palace Co. Cr.$10,900

6 0

2 years ago

When the laptop market overtook the desktop market, blue tech inc., a leader in desktop technology, was left at a competitive di

Sedaia [141]

In this scenario, Blue Tech Inc.'s failure can be best attributed to "Time compression diseconomies."

We accept time compression diseconomies where the snappier a firm builds up the asset, the higher the improvement cost. We demonstrate that time compression diseconomies normally offer ascent to asset heterogeneity and henceforth upper hand in that one firm builds up the asset quicker than the other. We evaluate the supportability of the upper hand, determine conditions

under which the asset is "incomparable" and demonstrate that firm benefits are nonmonotonic in the degree of time compression diseconomies.

5 0

2 years ago

"The company will pay a dividend of $15 per share 10 years from today and will increase the dividend by 5 percent per year there

statuscvo [17]

Answer:

Current Share price= $114.21

Explanation:

The Dividend Valuation Model is a technique adopted to detremine the value of an asset. According to this model, the value of an asset is the sum of the present values of the future cash flows that would arise from the asset discounted at the required rate of return (discount rate)

The model is premised on the concept of the time value of money. The idea that $1 today is not the same as $1 tomorrow. The $1 of today is worth more than that of tomorrow; because of the opportunity to earn interest. So to determine the worth of a future cash flow, we compute its worth today- its present value.

The Present Value of a future cash flow is the amount that needs to be invested today at a particular rate of return to equal the same cash flow in the future. Present value means the value in year 0 or now

The process of calculating the present value of a future sum is called discounting. So to calculate the current stock price in this question, we shall discount the future dividends using the required rate of return and then add them together.

So if an asset (e.g a stock) promises some cash flows in the future, those cash flows need to be brought to their present values and then be added to arrive at the value of the asset

In this question, the cash flows are the dividends as given and the rate of return (discount rate) is 15%

So we apply this model as follows:

Step 1 : PV of div from year 1 to 10 = 15× ((1-1.15)^(-10))/0.15) = 75.282

Step 2:PV (in year 10)of div from year 11 onward=(15×1.05)/(0.15-0.05)= 157.5

Step 3:PV(in year 0) of div from year 11 onward = 157.5 × (1.15)^ (-10) = 38.93

Current Share price= $75.282 + $38.93 = $114.21

Note: step 3 is important because the the cash flows from year 11 onward were discounted to arrive at their values in year 10. Since we are interested in the current price i.e year 0 value, it is important that we re-discount again to bring them to their PV in year 0.

8 0

2 years ago

What is the difference between a change in aggregate supply and a change in aggregate output supplied?

trapecia [35]

The aggregate demand curve, like most typical demand curves, slopes downward from left to right. Demand increases or decreases along the curve as prices for goods and services either increase or decrease. In addition, the curve can shift due to changes in the money supply, or increases and decreases in tax rates.

4 0

3 years ago