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____ [38]
3 years ago
13

Are the materials costs and processing costs relevant in the choice between alternatives A and B?

Business
1 answer:
podryga [215]3 years ago
4 0

Answer:

Please see explanation.

Explanation:

Material Cost = A cost which is used to prepare a goods or services is termed as material cost.

Processing Cost = When a cost incurs to satisfy customers want from taking orders to ensuring product delivery, it is called processing cost. It includes taking order, tracking, keeping and maintaining inventories, manufacturing products, customer support, and product delivery.

When there are two alternatives including processing and material costs, we have to use three scenarios:

A) In both the alternatives, the material cost is $50,000 and $55,000. The processing cost is $40,000 and $45,000.

In that case, since material cost and processing cost vary from one alternative to another, both the cost are relevant.

B) In both the alternatives, the material cost is $50,000 and $50,000. The processing cost is $40,000 and $45,000.

In that case, since the cost for material in alternative A and B is similar while the processing cost is different, therefore, only processing cost is relevant.

C) In both the alternatives, the material cost is $50,000 and $55,000. The processing cost is $40,000 and $40,000.

In that case, since the cost for material in both the alternatives are different while the processing cost is similar, only material cost is relevant.

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At a nominal interest rate of i i convertible semiannually, an investment of 1,000 immediately and 1,500 at the end of the first year will accumulate to 2,600 at the end of the second year. Calculate i i.
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2 years ago
Orange Inc., an orange juice producer with a current debt-to-equity ratio of 2, is considering expanding its operations to produ
postnew [5]

Answer:

8.25%

Explanation:

Orange, Inc. should calculate the MARR (minimum acceptable rate of return) for this project using the following:

Re = 12% (similar to Paste, Inc., so it can be considered the industry's average)

Rd = 6% x (1 - 25%) = 4.5%

MARR = (1/2 x 12%) + (1/2 x 4.5%) = 6% + 2.25% = 8.25%

This calculation is similar to calculating a company's WACC since you must determine the weighted cost of financing the project.

6 0
3 years ago
Jorge martinez hates to do performance appraisals of his subordinates because he always struggles when he has to evaluate their
frosja888 [35]

Jorge should provide feedback from all around the employee.

4 0
3 years ago
Read 2 more answers
During the month of June, Ace Incorporated purchased goods from two suppliers. The sequence of events was as follows: June 3 Pur
Alinara [238K]

Answer and Explanation:

The journal entries are shown below:

On June 3

Merchandise Inventory $4,100

                   To Accounts payable $4,100

(Being the purchase of goods on credit is recorded)  

On Jun 5

Accounts payable $1,100  

         To Merchandise   Inventory  $1,100

(To record purchase returns)  

On June 6

Merchandise Inventory $1,000

     Accounts payable  $1,000

(Being the purchase of goods on credit is recorded)  

On June 11

Accounts payable ($4,100 - $1,100) $3,000

               To Cash  $2,960

               To  Inventory ($4,100 - $1,100) × 2%  $60

(Being the payment is recorded)  

On June 22

Accounts Payable $2,000     ($3,000 - $1,000)

    To Cash  $2,000

(Being the payment on account in full is paid)

4 0
3 years ago
A furniture factory's employees work overtime to finish an order that is sold on January 31. The office sends a statement to the
Lana71 [14]

Answer:

January

Explanation:

The overtime wages should be expensed in January as in the month of february, wages will be accrued and it will be liablity for employer.

The overtime worked in month on january should be paid in january itself and overtime expense should be included in wages payable in the month of January. When wages are paid, the owner of the factory should debit the wages payable account and cash account should be credited as amount of casg paid to the employees. Wages are considered as operating expenses of factory.

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3 years ago
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