Answer:
The correct answer is letter "B": Often reveal products that were under- or over-costed by traditional costing systems.
Explanation:
Activity-Based Costing or ABC is a managerial accounting method that assigns certain indirect costs to the products incurring the bulk of those costs. ABC is primarily used in the manufacturing sector to make a better calculation of the true cost of production per unit. Compared to the traditional costing method, ABC spots products that could be under-costed or over-costed.
Answer:
Option (C) is correct.
Explanation:
We have to use MM proposition that cost of equity will change itself in such a manner so that it can take care of its debt.
Cost of equity:
= WACC of all equity firm + (WACC of all equity - Cost of debt ) × (Debt -to-equity ratio)
At the beginning, when there was no debt,
WACC = cost of equity = 12 %
Levered cost of equity:
= 12% + ( 12% - 6%) × 0.5
= 15%
Therefore, Rearden's levered cost of equity would be closest to 15%.
Answer:
Gross profit= 131,500
Explanation:
Giving the following information:
Last quarter, RP Enterprises earned $220,000 in sales revenue and had $90,000 cost of goods sold (at standard). RP also experienced these variances: Materials price: $2,400 F Materials quantity: $1,400 U Labor price: $2,000 U Labor quantity: $1,000 F Overhead: $1,500 F
To calculate the cost of goods sold, we use actaul costs and quantity of direct labor and direct materials. Therefore, the only estimated cost is overhead.
Gross profit= 220,000 - 90,000 + 1,500= 131,500
Answer:
Virtuous Circle
Explanation:
Virtuous circle occurs when one good events feeds on itself to improve business further. In the question, blue inc. invested in social responsibilities initiative (a good event) which on turn generated profits for the company (improved the business), probably by the event leading them to having more loyal customers.
It is a self propagating advantageous situation in which a successful solution or events leads to more desired results or success. It creates a positive feedback loop, creating goodwill with the customers.
Available options are:
A. All of the choices are correct.
B. Average fixed costs would increase.
C. Marginal costs would increase.
D. Average variable costs would increase
Answer:
Option B. Average fixed costs would increase.
Explanation:
As the variable cost is the same which means that the marginal cost (All variable costs) would neither increase nor the average variable cost (Average variable cost due to fluctuating variable cost) would increase. Hence both Option C and D are incorrect.
Option B is correct because:
Average Fixed cost = (Initial Value + Value Now) / 2
Average Fixed cost = ($100 + $150) / 2 = $125
This means that the average cost has been increased.
