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3 years ago

When reporting inventory using the lower of cost or market, market should not be less than:

Business

1 answer:

Natali5045456 [20]3 years ago

3 0

Answer:

Net realizable value less a normal profit margin.

Explanation:

Lower of cost or market rule of inventory states that cost of inventory recorded must be that at which cost is lower, and the original cost is the current market price.

This occurs when the inventory has become obsolete, market price has declined, or inventory has deteriorated

Net realisable value is defined as selling price minus estimated cost of completion.

So the market value should not be less than net realizable value less a normal profit margin.

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The differences between the two are that ________ involve(s) both manufacturing and procurement with multiple manufacturers, sup

maks197457 [2]

The differences between the two are that <u>supply chain </u>involve(s) both manufacturing and procurement with multiple manufacturers, suppliers, and retail companies.<u> logistics </u> refers to distribution activities in one company.

<h3>What is Supply chain and logistics?</h3>

Supply chain has to do with production or manufacturing and distribution of goods produce to suppliers, retailers or customers while logistics has to do transporting or distribution of goods or products.

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Logistics involve:

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Inconclusion <u>supply chain </u>involve(s) both manufacturing and procurement with multiple manufacturers, suppliers, and retail companies.<u> logistics </u> refers to distribution activities in one company.

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2 years ago

Is giving a speech on job specialization for her business class. She will most likely tell the class that one of the reasons for

Eduardwww [97]

Answer:

Answer D.

Explanation:

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2 years ago

All of the following are arguments against increased social responsibility except:________.

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3 years ago

Read 2 more answers

Sunset Travel Agency specializes in flights between Toronto and Jamaica. It books passengers on Hamilton Air. Sunset’s fixed cos

xxTIMURxx [149]

Answer:

See the explanation below.

Explanation:

1 a. Calculate the number of tickets Sunset must sell each month to break even.

Selling price = 6% * $1,500 = $90 per ticket

Variable cost per unit = $43 per ticket

Contribution margin per unit = $90 – $43 = $47 per ticket

Fixed cost = $23,500

Break-even tickets per month = Fixed cost / Contribution margin per unit = $23,500 / $47 = 500 tickets

1 b. Calculate the number of tickets Sunset must sell each month to make a target operating income of $10,000 per month.

Number of tickets = (Fixed cost + Targeted profit) / Contribution margin per unit = ($23,500 + $10,000) / $47 = 712.77, or 713 tickets

2 a. Calculate the number of tickets Sunset must sell each month to break even.

Selling price = 6% * $1,500 = $90 per ticket

Variable cost per unit = $40 per ticket

Contribution margin per unit = $90 – $40 = $50 per ticket

Fixed cost = $23,500

Break-even tickets per month = Fixed cost / Contribution margin per unit = $23,500 / $50 = 470 tickets

2 b. Calculate the number of tickets Sunset must sell each month to make a target operating income of $10,000 per month.

Number of tickets = (Fixed cost + Targeted profit) / Contribution margin per unit = ($23,500 + $10,000) / $50 = 670 tickets

3 a. Calculate the number of tickets Sunset must sell each month to break even.

Selling price = $60 per ticket

Variable cost per unit = $40 per ticket

Contribution margin per unit = $60 – $40 = $20 per ticket

Fixed cost = $23,500

Break-even tickets per month = Fixed cost / Contribution margin per unit = $23,500 / $20 = 1,175 tickets

3 b. Calculate the number of tickets Sunset must sell each month to make a target operating income of $10,000 per month.

Number of tickets = (Fixed cost + Targeted profit) / Contribution margin per unit = ($23,500 + $10,000) / $20 = 1,675 tickets

Comment:

Due a fall in commission, there are appreciable increases in the break-even point and the number tickets that have to be sold to meet a targeted operating income of $10,000.

4 a. Calculate the number of tickets Sunset must sell each month to break even.

Selling price = $60 + $5 = $65 per ticket

Variable cost per unit = $40 per ticket

Contribution margin per unit = $65 – $40 = $25 per ticket

Fixed cost = $23,500

Break-even tickets per month = Fixed cost / Contribution margin per unit = $23,500 / $25 = 940 tickets

4 b. Calculate the number of tickets Sunset must sell each month to make a target operating income of $10,000 per month.

Number of tickets = (Fixed cost + Targeted profit) / Contribution margin per unit = ($23,500 + $10,000) / $25 = 1,340 tickets

Comment:

The $5 delivery fee brings about an increased contribution margin higher than before, which makes both the break-even point and the tickets sold to achieve operating income of $10,000 to fall.

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3 years ago