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aalyn [17]
3 years ago
12

When comparing absorption costing and variable costing, if units produced are units sold, what is the effect on net operating in

come?
Business
1 answer:
11111nata11111 [884]3 years ago
8 0

Answer:

The Net Operating income will be the same for both methods.

Explanation:

Net Operating income under absorption costing and variable costing methods usually differ because of existence of inventory.

Fixed overheads are deferred in Inventory when using absorption costing. Meaning that a higher income is obtained under absorption costing than variable costing when there is inventory and a lower income under absorption costing than variable costing.

When units produced are units sold, there is no inventory. Therefore, the Net Operating income will be the same for both methods.

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You own a house near the beach. Your Home Owners insurance has an annual premium of $1,250. However,since you live only 112 feet
vampirchik [111]

Answer:

1,437.50

Explanation:

6 0
3 years ago
The key feature of this circular flow is the _______________.
soldier1979 [14.2K]

Answer: B, market.

Explanation: Hope this helps you out. <3

7 0
3 years ago
Badgersize Company has the following information for its Forming Department for the month of August.
sergiy2304 [10]

Question Completion:

Costs incurred in August:

Direct materials $154,000

Conversion costs $264,000

Answer:

Badgersize Company

                                          Materials      Conversion

a. Equivalent units              74,000          69,500

b. Cost per equivalent unit $3.162          $4.144

Explanation:

a) Data and Calculations:

                                            Units      Materials      Conversion      Total

Beginning WIP inventory   20,000       100%              20%

Units started  August        54,000

Total units available          74,000

Transferred out                 59,000

Ending WIP inventory        15,000       100%                70%

Cost of beginning WIP                     $80,000          $24,000       $104,000

Costs incurred in August                 154,000          264,000          418,000

Total production costs                  $234,000        $288,000      $522,000

Equivalent unit             Units      Materials      Conversion

Units transferred out  59,000     59,000          59,000

Ending WIP inventory  15,000      15,000           10,500

Equivalent units                            74,000          69,500

Cost per equivalent unit

Total production costs           $234,000      $288,000

Equivalent units                          74,000          69,500

Cost per equivalent unit         $3.162              $4.144

8 0
3 years ago
Bill and Mike go in together to purchase 342 acres of land to use for hunting and family vacations. Ten years later, Bill dies a
romanna [79]

Answer:

Joint Tenancy

Explanation:

Joint tenancy represents a legal contractual arrangement that involves two or more people who have agreed to own a single property sharing both obligations and rights equally.

The terms of join tenancy is such that no one whether the partner or an inheritor of will is able to sell the property in future without the consent of other partners. Secondly, when a partner dies joint tenancy does not transfer assets to heirs instead it is vested in the surviving partner.

It becomes that Bill did not name his wife as his beneficiary, hence Mike inherits the entire 342 acres of land after Bill's death.

4 0
3 years ago
Local Co. has sales of $ 10.1 million and cost of sales of $ 5.5 million. Its​ selling, general and administrative expenses are
Firlakuza [10]

Answer:

1. 45.5%

2. 13.3%

3. 7.2%

Explanation:

The formulas and calculations are shown below:

1. Gross margin = (Sales - cost of sales) ÷ (sales) × 100

                          = ($10.1 million - $5.5 million) ÷ ($10.1 million) × 100

                          =  ($4.6 million) ÷ ($10.1 million) × 100

                          = 45.5%

Gross profit = Sales - cost of sales

2. Operating margin = (Gross profit - selling, general and administrative expenses - research and development - annual depreciation charges) ÷ (sales) × 100

= ($4.6 million -  $460,000 or $0.46 million - $1.4 million - $1.4 million) ÷ ($10.1 million) × 100

= ($1.34 million) ÷ ($10.1 million) × 100

= 13.3%

Operating income = Gross profit - selling, general and administrative expenses - research and development - annual depreciation charges

3. Net profit margin = (Operating income - taxes) ÷ (sales) × 100

= ($1.34 million - $0.6097 million) ÷ ($10.1 million) × 100

= ($0.7303 million) ÷ ($10.1 million) × 100

= 7.2%

The income tax expense =  Operating income × income tax rate

                                          = $1.34 million × 45.5%

                                           = $0.6097 million

6 0
3 years ago
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