Oscar's fixed costs of production is $3,000
Answer:
C. Significant amounts of indirect costs are allocated using only one or two cost pools.
D. All or most indirect costs are identified as output unit-level costs.
E. Products make diverse demands on resources because of differences in volume, process steps, batch size, or complexity.
F. Products that a company is well suited to make and sell show small profits, whereas products that a company is less suited to produce and sell show large profits.
Explanation:
ABC (activity based costs) method focuses on individual activities as the main cost objects. After it determines the cost of individual activities, it uses them as the basis for assigning costs to products and services. ABC method allocates overhead costs based on the main cost objects.
Answer:
d. $74,749.60 ( depreciation allowance @ 8.92% )
Explanation:
Under Modified Accelerated Cost Recovery System the Office furniture and fixtures, agricultural machinery and equipment, any other property not associated with another class is classified as 7-years property.
These assets are depreciated as follows:
Year Percentage Depreciate
1 14.29%
2 24.49%
3 17.49%
4 12.49%
5 8.93%
6 8.92%
7 8.93%
8 4.46%
In the Sixth year depreciation will be charged by 8.92%.
Asset Value = $838,000
Depreciation Allowance in 6th year = $838,000 x 8.92%
Depreciation Allowance in 6th year = $74749.60
*Option for the given Mcqs are missing and written as follows:
Select one:
a. $80,411.60
b. $74,833.40
c. $89,108.00
d. $74,749.60
e. $89,327.08
Answer:
Liabilities until the product or service is provided
Explanation:
The accrual principle of accounting implies that cash received in advance will be treated as liability until its earned in form of cash
Accounting treatment of advance payments is: Cash Dr and Liability Cr
The cash received from customer in advance would not be treated as revenue until the goods are delivered or services are rendered to the customer.
.
Answer:
The smaller factory will face diminishing returns first.
Explanation:
The smaller factory will most likely have fewer resources as compared to the larger one. The amount of capital will also be comparatively lower. It will also be producing a lower output.
So, when the number of workers in both the factories has increased the workers in the smaller factory will need to operate with less capital. So, they are likely to face diminishing returns first.