All categories

4 years ago

A company sells goods for $150,000 that cost $54,000 to manufacture. Which statement is true?

Business

1 answer:

sasho [114]4 years ago

3 0

Answer:

Option B is the correct answer.

Explanation:

The sale of finished goods worth $54000 for an amount of $150000 will require us to recognize a revenue of $150000 and a reduction in inventory of finished goods worth $54000.

Option a is incorrect as the gross profit is not recognized on balance sheet. The gross profit is an income statement item.

Option c is incorrect as the sale of finished goods will cause a reduction in the finished goods inventory for the amount of goods sold.

Option d is incorrect as the sale will be recognized in sales revenue on the profit and loss statement and not on the balance sheet as revenue is a profit and loss statement account.

Thus, option b is the correct answer as the sale of finished goods will be represented by a reduction in finished goods inventory by the cost of the goods sold which is $54000.

You might be interested in

The growing demand for biofuels in the U.S. that has led to a growing supply of soybeans from Brazil is an example of all of the

Annette [7]

Answer:

Localized economics

Explanation:

Localized economics :

Localisation implies the grouping of a specific industry in a specific region, region or area. Localisation is identified with the regional division of work, that is, specialization by regions or areas.

A specific town or district will in general have practical experience in the creation of a specific item.

These are benefits for a firm got from the nearness of firms having a place with a similar industry in a region. Urbanization economies are those advantages acquired by a firm emerging from the size of a region and the decent variety of its economy.

5 0

3 years ago

Break-Even Sales Under Present and Proposed Conditions

solong [7]

Answer:

<h3>Portmann Company</h3>

1. Total variable costs = $89,000,000

Total fixed costs = $40,600,000

2. a Unit variable cost = $89

b. Unit contribution margin = $100

3. Break-even sales (units) = Fixed cost/Contribution margin per unit

= $40,600,000/$100

= 406,000 units

4. Break-even sales (units) = Fixed cost/Contribution margin per unit

= $45,100,000/$100

= 451,000 units

5. Break-even sales (units) to achieve target profit = (Fixed cost + Target Profit)/Contribution margin per unit

= ($45,100,000 + $59,400,000)/$100

= 1,045,000 units

6. Maximum operating income possible with the expanded plant is:

= $61,900,000

7. Operating income if the proposal is accepted and sales remain at the current level is:

= $54,900,000

Explanation:

a) Data and Calculations:

Sales volume during current year = 1,000,000

Sales price per unit during current year = $189

Income statement is as follows:

Sales $189,000,000

Cost of goods sold (101,000,000)

Gross profit $88,000,000

Expenses:

Selling expenses $16,000,000

Administrative expenses 12,600,000

Total expenses (28,600,000)

Operating income $59,400,000

Variable Fixed

Cost of goods sold 70% 30%

Selling expenses 75% 25%

Administrative expenses 50% 50%

Total variable costs for the current year:

Variable

Cost of goods sold 70% * $101,000,000 = $70,700,000

Selling expenses 75% * $16,000,000 = 12,000,000

Administrative expenses 50% * $12,600,000 = 6,300,000

Total variable costs = $89,000,000

Variable unit cost = $89 ($89,000,000/1,000,000)

Contribution per unit = $100 ($189 - $89)

Total fixed costs for the current year:

Fixed

Cost of goods sold 30% * $101,000,000 = $30,300,000

Selling expenses 25% * $16,000,000 = 4,000,000

Administrative expenses 50% * $12,600,000 = 6,300,000

Total fixed costs = $40,600,000

Projected sales for the next year = $202,230,000 ($189,000,000 + $13,230,000)

Percentage Increase in sales for the next year = $13,250,000/$189,000,000 * 100 = 7%

Fixed costs caused by expansion = $4,500,000

Total fixed costs = $45,100,000 ($40,600,000 + $4,500,000)

Variable costs = $95,230,000 ($89,000,000 * 1.07)

Contribution margin:

Sales $202,230,000

Variable costs 95,230,000

Contribution margin $107,000,000

Expenses:

Fixed costs 45,100,000

Operating income $61,900,000

Sales volume = 1,070,000 units (1,000,000 * 1.07)

Contribution per unit = $107,000,000/1,070,000 = $100

Sales at current level:

Sales $189,000,000

Variable costs 89,000,000

Contribution $100,000,000

Fixed costs 45,100,000

Operating income $54,900,000

6 0

3 years ago

When $2,500 of accounts receivable are determined to be uncollectible, which of the following should the company record to write

never [62]

Answer:

d. A debit to Allowance for Uncollectible accounts and a credit to accounts receivable

Explanation:

In an entity using the allowance method all write offs of receivables are routed through the allowance account.

The allowance account is credited with the estimated amount of uncollectible accounts and the bad debts expense account is debited.

When an account receivable is written off it is debited to the allowance for uncollectible accounts is debited and receivable accounts is credited.

5 0

3 years ago

Dell first chooses whether to offer Symantec $30 or $20 for each copy of its software, and then Symantec responds by either acce

Veronika [31]

Answer:

The correct answer is Dell will offer $20 per copy of the software and Symantec will accept the offer.

Explanation:

A Nash equilibrium is a situation in which all players have put into practice, and know that they have done so, a strategy that maximizes their earnings given the strategies of others. Consequently, no player has any incentive to individually modify their strategy.

It is important to keep in mind that a Nash equilibrium does not imply that the best joint result for the participants is achieved, but only the best result for each of them considered individually. It is perfectly possible that the result would be better for everyone if, in some way, the players coordinated their action.

In economic terms, it is a kind of imperfect balance of competition that describes the situation of several companies competing for the market of the same good and who can choose how much to produce to try to maximize their profit.

5 0

3 years ago

Countercyclical monetary policy means that _________________. Select the correct answer below: the Fed lowers interest rates dur

vlabodo [156]

Answer:

the Fed lowers interest rates during recessions and raises them during economic booms

Explanation:

Countercyclical monetary policy is a monetary policy used to work against any cyclical tendencies in order to slow down the economy when it is booming, and to stimulate economic activity then there is a recession.

Example of such policy is therefore a reduction of interest by the Fed during recessions and an increase of interest rate when there are economic booms.

5 0

3 years ago