If Martin and Beasley switched from its current accounting method to an activity-based costing system, the amount of administrative cost chargeable to consulting services would change by an amount other than those listed above
Option D
Solution:
Total amount of administrative cost chargeable to consulting services in ABC costing is given below
( $200000 x 35% ) + ( $50000 x 30% ) + ( $20000 x 20% )
= $70000 + $15000 + $4000
= $89000
Hence, Using ABC costing administrative cost chargeable to consulting services decreases by ($270000 - $89000)
decreases by $181000
Hence, D. change by an amount other than those listed above.
Answer:
Which of the following statements best decribes an indirect cost?
An indirect cost is assigned to a cost object using allocation
Explanation:
A cost or expense that is not directly traceable to a department, product, activity, customer, etc. As a result indirect costs and expenses are often allocated to the department, product, etc.
Answer:
$94,610
Explanation:
Invested assets (A) = $1,103,000
Sales = $1,278,000
Income from operations (I) = $238,000
minimum rate of return (r) = 13%.
Residual income (RI) is the generated income that exceeds the minimum rate of return and can be defined as:
The residual income for Mason Corporation is $94,610
Answer:
Student loan.
Explanation:
Student loans are given to assist students pay for university education. Loans can cover turion, living expenses, and books.
Interest rate charged is very low and repayment can be deferred till after the student graduates.
The most common type of student loan are federal loans(offered by the federal government). They have a lower interest rate than student loans offered by private institutions like banks, schools and credit unions.
Answer:
4.96%
Explanation:
In order to determine the component after-tax cost of debt first we need to compute the before tax cost of debt by applying the RATE formula which is to be shown in the attachment below:
Given that,
Present value = $1,155
Future value or Face value = $1,000
PMT = 1,000 × 8.25% ÷ 2 = $41.25
NPER = 40 years × 2 = 80 years
The formula is shown below:
= Rate(NPER;PMT;-PV;FV;type)
The present value come in negative
So, after applying the above formula
1. The pretax cost of debt is 3.54% × 2 = 7.08%
2. And, the after tax cost of debt would be
= Pretax cost of debt × ( 1 - tax rate)
= 7.08% × ( 1 - 0.30)
= 4.96%