That would be a "media plan"
Answer:
C. $1,370,000
Explanation:
Calculation to determine the cost figures that should be used in setting a minimum bid price if Harlen has excess capacity
Direct material $340,000
Direct labor $610,000
Allocated variable overhead $420,000
Minimum bid price $1,370,000
($340,000+$610,000+$420,000)
Therefore the cost figures that should be used in setting a minimum bid price if Harlen has excess capacity is $1,370,000
Answer: A. the sales price less the present value of the residual value
Explanation:
Sales revenue is calculated as the selling price less the cost of the commodity being sold. In this case the cost will be the value of the asset. The sales revenue will therefore be the selling price less the value of the asset when it is to be sold so the relevant value is the residual value.
Even though the residual value is unguaranteed, the current estimate will be treated as the value to be deducted from the selling price. The difference is what will be reported as sales revenue.
