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4 years ago

Which of the following statements is correct?

Business

1 answer:

choli [55]4 years ago

6 0

Answer:

The answer is: A) If a firm follows the residual dividend model, then a sudden increase in the number of profitable projects would be likely to lead to a reduction of the firm's dividend payout ratio

Explanation:

If a company uses the residual divided policy it means that it will decide the amount to distribute as dividends using the following formula:

dividends = earnings - money required to finance projects

So if the number of profitable projects suddenly increases, then the amount of money needed to fund those projects will also increase, therefore reducing the amount left for dividends.

On the long run those profitable projects should increase the earnings of the company and the dividends.

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Cash receipts A firm has actual sales of $ 60 comma 000 in April and $ 64 comma 000 in May. It expects sales of $ 75 comma 000 i

nirvana33 [79]

Answer:

Month incurred Amount June July August

June 75,000 37500 18,750 18,750

July 95,000 47,500 23,750

August 95,000 47,500

37,500 66,250 90,000

The expected cash receipts are:

June = $37,500

July = $66,250

August = $90,000

Explanation:

The pattern of collection of sales is that 50% are collected in the months of sales while 25% each will be collected in the following month and following 2 months. For instance, 50% of June sales are collected in June, 25% are realized in July and 25% are collected in August. 50% of July sales are realized in July and 25% are collected in August.

7 0

4 years ago

The general principle on setting transfer prices that are in the organization's best interests is: A) outlay cost plus opportuni

r-ruslan [8.4K]

Answer:

The correct answer is A) outlay cost plus opportunity cost of the resource at the point of transfer.

Explanation:

In the commercial operations of companies, prices are usually set so that companies obtain a sufficient profit margin to carry out their exploitation cycle, obtain profitability for shareholders and at the same time be competitive in the market.

However, there are certain operations in which the intervenors can manipulate the sale prices of the goods or services they provide, since these transactions are carried out between entities or related persons. In these cases, a company can sell to another at a different price than the market, either higher or lower, so that the transfer price would not follow the rules of the free market, regulated by supply and demand, being able to transfer benefits or losses artificially from one company to another.

To avoid the alteration of prices between entities or related persons, transfer prices are used, whose fundamental principle is that the price to be fixed in transactions between related parties must be the market value (arm's length principle). This principle has been adopted by most of the world's economies and, in particular, by the countries that make up the Organization for Economic Cooperation and Development (OECD), which has established guidelines and doctrine on transfer pricing.

Therefore, companies that belong to the same group or have another type of relationship, should set prices in the same way as they would in normal conditions between independent parties, or what is the same, according to market value.

The pricing between related parties must also be documented, since the Tax Administration may adjust the transfer prices if it considers that they differ from those that would occur between independent parties.

3 0

3 years ago

The Bennett Company uses a job-costing system at itsDover, Delaware, plant. The plant has a machining department and a finishi

zimovet [89]

Answer:

Explanation:

1) is attached below

2) Budgeted manufacturing overhead rate :

In Machining Department = Manufacturing overhead cost / Machine hrs

= $9065000 /185,000 = $49 per machine hour

In Finishing Department = Manufacturing overhead cost / Direct Manufacturing labor cost

= $8,058000 / $3950,000 = 2.04

3) Machining Department overhead = $20 per machine hr * 100 hrs

= $2000

Finishing Department overhead = $1400 * 204% = $2856

Total manufacturing overhead = $4856

4). Total costs of Job 431:

Direct material - Machining Department = $14500

- Finishing Department = $4000

Direct manufacturing labor - Machining Department = $800

- Finishing Department = $1400

Manufacturing overhead = $4856

Total Cost = $25556

Cost per unit = $25556 / 100 = $255.56

Actual manufacturing overhead machining finishing

Actual manufacturing overhead $12,010,000 $9,184,000

Manufacturing overhead allocated $11,760,000 $9,384,000

($49×240,000) (204%×4600,000)

Under allocated(over allocated) $250,000 $(200,000.00)

For plant as whole:

(12,010,000+$9184,000)-(11760,000+$9384,000)

50000 Under applied.

6) In machining department main focal points is machines , so machine hours is selected for this.In finishing department, labor cost is key area.so it is selected by the company .In both department key area is different so different cost drivers are selected for both departments.

6 0

3 years ago

A piece of equipment was acquired on January 1, 2018, at a cost of $55,000, with an estimated residual value of $5,000 and an es

nalin [4]

Answer:

Book value 2020= $18,000

Explanation:

Giving the following information:

Purchasing price= $55,000

Residual value= $5,000

Useful life= 5 years

First, we need to determine the depreciation expense for 2018 and 2019. We will use the following formula:

Annual depreciation= 2*[(book value)/estimated life (years)]

2018= 2*[(55,000 - 5,000)/5]= 20,000

2019= 2*[(50,000 - 20,000)/5]= 12,000

Book value 2020= 30,000 - 12,000

Book value 2020= $18,000

8 0

3 years ago

what is one of the major reasons that many people end up financial trouble and have to consider bankrupcy

IRISSAK [1]

One of he reasons is Excessive Medical Expenses.

If you’ve been involved in any type of serious accident or have mounting medical bills due to illness, you may be at risk for financial problems that lead to bankruptcy. Excessive medical expenses are the number one cause of bankruptcy and account for nearly two-thirds of all personal bankruptcies, statistics show.

Even though the majority of people filing for bankruptcy due to medical bills have health insurance, their out-of-pocket expenses still end up being too high.

3 0

3 years ago