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3 years ago

If a company uses LIFO, a LIFO liquidation causes a company's income taxes to increase:_______

Business

1 answer:

olasank [31]3 years ago

4 0

Answer: a. When inventory purchase costs are rising.

Explanation:

Last In First Out is an inventory stock valuation method where newer inventory is sold first and older inventory are sold last.

When a LIFO liquidation occurs, it means that the company has sold off its new stock and are now selling the older one.

This will lead them to have a lower cost of goods sold as the older stock is usually cheaper. If Inventory purchase costs are increasing in the market, then sales prices will have to increase as well. The company will sell at this new price but will still have that lower cost of goods sold.

This means that they would have more profits as a result which will lead to more taxes being charged on them.

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Sheen Co. manufacturers laser printers. It has outlined the following overhead cost drivers: Overhead Costs Pool Cost Driver Ove

mylen [45]

Answer:

$200

Explanation:

As for the information provided,

Quality control rate = $\frac{72,000}{1,200} =\ $60 per hour$

Machine operation = $\frac{150,000}{1,500} =\ $100 per hour$

Material Handling = $\frac{1,200}{30} =\ $40\ per batch$

Miscellaneous Overhead = $ $\frac{57,000}{5,700} =\ $10 per hour$

The order of 1,000 laser printers

Require:

Quality control cost = $60 $\times$ 265 = $15,900

Machine operation = $100 $\times$ 225 = $22,500

Material Handling = $40 $\times$ 5 = $200

Miscellaneous Overheads = $10 $\times$ 740 = $7,400

Therefore, correct option is:

$200

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3 years ago

The following information is available for Lock-Tite Company, which produces special-order security products and uses a job orde

lakkis [162]

Answer:

1.Cost of direct material used =$168000

2.cost of direct labor used =$100000

3.Cost of goods manufactured =$396800

4.cost of goods sold =$422100

5.Gross profit = $577900

6.Under applied factory overhead =$84000

Explanation:

Direct labour= (D/L)

Direct material = (D/M)

Factory overhead =( FOH)

Raw material used = material (open) +purchased -material (end)

= 30000+194000-56000

= 168000.

Entry: Dr work in process 168000

Cr raw material 168000

Manufacturing cost = Raw material used + direct labor cost + factory overhead.

= 168000+100000+(16000+23000+100000) = $407000.

COGM= Manufacturing cost+work in process (open)-work in process (end)

= 407000+9900 - 20100 = $396800.

Applied factory overhead= direct labor * predetermined rate

= 100000*55% = $55000.

entry: Dr work in process 55000

Cr Applied factory overhead 55000.

Cost of goods sold = Cost of goods manufactured + finished goods (open) -finished goods (end).

= 396800+59000-33700 =$422100.

T-account

Raw material Work in process

Dr___________Cr__ __ DR ___________CR

30000-- (open) 9900 ----

194000--- (D/L) 100000 ---

---- 56000 (FOH) 55000 --- 20100

---- bal figure 168000 168000 -- bal fig 312800.

Actual factory overhead = $139000

Applied factory overhead =$55000

Under applied factory overhead = 84000.

Sales = 1000000

Less cost of goods sold = (422100)

Gross profit 577900

6 0

3 years ago

When a firm initiates or increases a cash discount, the net effect on the accounts receivable investment is difficult to determi

Scilla [17]

Answer:

Yes is True that when a firm initiates or increases a cash discount, the net effect on the accounts receivable investment is difficult to determine because the nondiscount takers paying earlier will reduce the accounts receivable investment, while the new customer accounts will increase this investment.

Explanation:

Accounts Receivable is any amount of money owed by customers for purchases made on credit. It is an asset account on the balance sheet since it is money due in the short run.

As a current asset, Accounts Receivable is an important aspect of a businesses' fundamental analysis used to measures a company's liquidity or ability to cover short-term obligations without additional cash flows.

Accounts receivable Investment will be reduced if the firm initiates or increases a cash discount.

6 0

3 years ago

Suppose the U.S. Treasury announces plans to issue $50 billion of new bonds. Assuming the announcement was not expected, what ef

Sidana [21]

Answer:

Prices would decline and interest rates would rise

Explanation:

This is because the market will be flooded with additional 50 billion dollars of bond increasing the supply causing the price to fall. Interest rate are inversely proportional to prices thus interest rate will rise.

4 0

3 years ago

How much will a company's net operating income change if it undertakes an advertising campaign given the following data: Cost of

Olegator [25]

Answer:

Increase in net operating is $9,800

Explanation:

Computation table

Increase in sales $60,000

Less:Variable expense (42%) $25,200

Increase in contribution $34,800

Less:Cost of advertising $ 25,000

Increase in net operating $9,800

5 0

3 years ago