Answer: A.) Contribution Margin analysis
Explanation: The contribution margin analysis could be explained as an analytical tool in accounting which helps managers in observing variation or differences in the budgeted and actual contribution margin of a product. The contribution margin is used to determine the revenue made on a product after deducting the fixed cost incurred in it's production. It is also used to evaluate the performance of individual product derived from the amount of residual profit after deducting necessary production cost.
Answer:
The correct answer to the following question will be Option e (0 $ 200,000).
Explanation:
Residual dividend policy should be used for businesses that fund their capital needs by wealth earned at home. Such that, companies can make investments only if all investment requirements are satisfied by something like internal resources instead of moving to something like the marketplace.
Capital Budget = $2,000,000
Capital structure will be:
Debt = 40%
Equity
= 60%
Income = $1,000,000
So let us measure the balance of our Expected Debt and Equity first:
Debt = 
= 
Equity = 
= 
As we know our income will be $1,000,000.
Then maybe we can have been using our inner income of $1,000,000 to funding everyone's capital requirement of $1,2000,000.
So,
Residual amount = 
= 
This suggests that our organization has to sell upwards of $200,000 shares of assets and therefore will not be capable to afford to pay some distributions yet. So that option e would be the right answer.
Answer:
Increasing the promotional budget for a product in order to increase awareness is not advisable in the short run under which of the following circumstances?
Production capacity is maxed out (200% plant utilization) and the company is stocking out of the product.
Explanation:
Since the production capacity has been exceeded and the company is still running out of stock of the product, there will be no need to increase the promotional budget for the product in order to increase awareness, especially in the short-run. The implication of the scenario is that the demand for the product is far outstripping the supply and there is an apparent scarcity or shortage of the entity's product in the marketplace. Until production the capacity has been expanded, the promotional budget for product awareness can be stopped and saved.
Answer:
Sunk cost
Explanation:
The sunken cost is the expense previously incurred that will not be compensated in future. Plus, it's also called past expense.
The cost at the time of decision-making is not significant and it should be ignored.
In the given question, the $3,500 spent which is not now recovered and hence represents the sunk cost
Answer:
The Journal entries are as follows:
(a) On August 2,
Stock Dividends A/c (1,500,000 × $70 × 4%) Dr. 4,200,000
To Stock dividend distributable (1,500,000 × $40 × 4%) 2,400,000
To Paid in Capital in excess of par- Common stock 1,800,000
(To record the stock dividend)
(b) On September 15,
No entry required
(c) On October 8,
Stock Dividend distributable A/c Dr. $2,400,000
To Common stock $2,400,000
(To record the stock dividend issued to stockholders)
