Calculation of the ending inventory with the first-in-first-out (FIFO) method:
Number of units in the ending inventory = Units in the beginning inventory + Units Purchased – Units sold
Number of units in the ending inventory = 1200+(500+2000)-2150 = 1550 units
Under the FIFO method the ending inventory belongs to the latest purchases. Hence, 1550 units shall belong to the latest purchase @ $13.50 per unit.
Hence, Cost of ending inventory using FIFO method = 1550 units @$13.50 = <u>$20,925</u>
Answer: D. During an economic downturn, a company changes its computer policy to only allow purchases of windows-based laptops and see profits go down. The company concludes that windows-based laptops cause profits to go down
Explanation:
In the other options, the new activity done by the company were definite causes of the effects that followed. A more efficient production process will cause gains in productivity. Coupons will bring in more sales and paying employees more will encourage them to engage in more sales.
Concluding that a computer type causes profits to go down however in a period where the economy as a whole is buying less, is simply correlation. In an economic downturn, people are buying less goods in general. The laptops will be no exception and it is not a reflection of people's preference or lack thereof of them.
Answer:
A) Yes, because the firm could sell the warehouse if it didn’t use it for the new project.
Explanation:
- The option A is correct in our scenario, because the firm still have the option to sale the warehouse even they want to use it for the new project.
- The option B is not correct as the cost of warehouse is not sunk cost, such a cost that has been utilized and can't be recovered, but we can sale the warehouse and get the payment.
- The option C is incorrect as once the project is complete then it would be a part of that project so they will not sale the warehouse.
Answer:
Earning Before Interest and Taxes $3,704
Explanation:
Sales (2,200 * 16.25) 35,750
Less: Variable Costs (2,200 * 8.43) <u>(18,546)</u>
Contribution Margin 17,204
Less: Fixed Cost (9,500)
Depreciation Expense <u>(4,000)</u>
Earning Before Interest and Taxes <u>$3,704</u>
Answer:
The equivalent units of production for materials during the period is 32,250 units.
Explanation:
Using first-in, first-out
Units Started and completed are the units received from the previous department - ending
34,500- 4,500=30,000
Units in production for materials
Beginning WIP 0 ( the whole materials were added at the previous period)
Started and completed 30,000
Ending WIP 2,250 (4,500 x 0,50) (50% complete as to materials)
Total materials 32,250
