Answer:
A- A change in the technology used by firms.
Explanation:
A change in technology can affect the demand of products and services. It can lead to the increased demand for a certain product, reducing the demand for an older product.
With the use of technology to upgrade products and services, demand curves will continually shift, according to preferences of customers.
Technology could be used by firms to produce upgrades and newer variations of products at more favorable prices for customers than existing products. This leads to competition and the demand for the newer device goes up since people see the new product as 'getting more for less'. A good example is computers and tablets. Tablets which could match up with the work of computers were produced at lower prices. This shifted the demand towards tablets, making computers more obsolete.
Answer:
a. multiplies the activity-based overhead rates per cost driver by the number of cost drivers expected to be used per product.
Explanation:
Costing is the measurement of the cost of production of goods and services by assessing the fixed costs and variable costs associated with each step of production.
Generally, an activity-based costing uses multiple cost pools such as manufacturing cost or customer services and multiple cost drivers such as direct labor hours worked, number of changes used in engineering department, etc.
Cost pool is simply the amount of money spent by a firm on a particular activity.
Hence, to assign overhead costs to each product, the company multiplies the activity-based overhead rates per cost driver by the number of cost drivers expected to be used per product.
In activity-based costing, the activity rate for an activity cost pool is calculated by using the following formula;
Activity rate = total overhead cost/activity for the activity cost pool.
Answer:
1. $2.5 million
2. $0
Explanation:
1. Since the book value is more than the generated future cash flows so book value cannot be recovered. In this case, the generated future cash flows are ignored
In this scenario, we compare the values between book value and the fair value of machinery, the difference would be the loss on impairment of the asset
In mathematically,
= Book value - fair value
= $6.5 million - $4.0 million
= $2.5 million
2. In this case, the sum of future cash flows is exceeded than the book value. So, no impairment loss would be recognized i.e zero amount
Answer:
B
Explanation:
As more consumers move in, the demand curve for the store's products would increase (shift to the right) as it is influenced by factors other than price.
While option A could be an eventual outcome, it would only follow an increase in Demand. Note that a change in price would result in movement along the curve.
There is not sufficient information to support Option C
Option D is wrong because higher demand would result in higher revenues, assuming all else remains constant.
Answer:
$810,000
Explanation:
incremental revenues = 20,000 x $13 = $260,000
incremental direct materials costs = 20,000 x $2 = ($40,000)
incremental direct labor costs = 20,000 x $4 = ($80,000)
additional overhead costs = $200,000 x 15% = ($30,000)
additional administrative expenses = ($86,000)
incremental net income = $24,000
combined net income = incremental net income + regular net income = $24,000 + $786,000 = $810,000
