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Elanso [62]
3 years ago
15

Lewis Inc. owns 40% of Morgan and applies the equity method. During the current year, Lewis buys inventory costing $400,000 and

sells it to Morgan for $700,000. At the end of the year, Morgan still holds $140,000 of this merchandise. What amount of unrealized gross profit must Lewis defer in reporting this investment using the equity method?
A. $24,000
B. $56,000
C. $60,000
D. $140,000
Business
1 answer:
Alchen [17]3 years ago
7 0

Answer:

The correct answer is a) $24,000

Explanation:

At the end of the year, Morgan still holds $140,000 of this merchandise

Lewis Inc. owns 40% of Morgan and applies the equity method

40% = 0.4

$140,000 x 40% = $56,000

Lewis buys inventory costing $400,000 and sells it to Morgan for $700,000.

$700,000 - $400,000 = $300,000

=$56,000 x ($300,000 ÷ $700,000)

=$56,000 x 0,428571429

= $24,000

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At the high and low levels of activity during the month, direct labor hours are 90,000 and 40,000, respectively. The related cos
andre [41]

Answer:

The fixed cost at any level of activity is $48,000 while the variable cost per unit at any level of activity is $1.30

Explanation:

The total cost is a function of the fixed and variable cost. Whilst the fixed cost does not change at a certain range of activities level, the variable cost changes as the level of activities(units produced or sold).

Using the high and low levels of activities given, let the variable cost per unit be v and the fixed cost F

for the high level,

F + 90,000v = 165,000

For the low level

F + 40,000v = 100,00

Solving both equations simultaneously,

50,000v = 65,000

v = $1.30

F + 40,000($1.30) = 100,000

F = 100,000 - 52,000

F = $48,000

5 0
3 years ago
g explain which types of organizations (if any) will traditional HRM fit most and which types of organizations (if any) will str
valentinak56 [21]

Answer:

HR Function refers to areas such as recruitment, selection, recruitment and retention, performance evaluation, promotional preparing, and reimbursement managerial staff.

Explanation:

  • Throughout traditional HRM every one of these operations has been associated with capacity building and therefore are constrained even within the HR manager. Those other operations are not focused on an organization’s strategy.
  • Traditional HRM is therefore not focused on effective organizational culture, while strategy Implementation focuses on its philosophy.
4 0
3 years ago
7 pounds of raw material are required to make 1 finished unit. The company desires an ending raw materials inventory for each mo
timurjin [86]

Answer:

Instructions are below.

Explanation:

We weren't provided with enough information to answer the request. <u>But, I will give an example and formulas to guide an answer.</u>

<u>For example:</u>

Production in units:

May=20,000

June= 22,000

Beginning inventory of direct materials= 8,000

<u>To calculate the purchase for May, we need to use the following formula:</u>

Purchases= production + desired ending inventory - beginning inventory

Purchases= 20,000*7 + (22,000*7)*0.29 - 8,000

Purchases= 176,660 pounds

7 0
3 years ago
[Disappointing Boat Purchase] Ava went to purchase a new boat. She wanted a boat she could use in a nearby lake and also take to
LekaFEV [45]

Answer:

Implied warrenty

Explanation:

The sale itself constituted an implied warranty of merchantability but not an express warranty or a warranty of fitness for a particular purpose.

8 0
3 years ago
The following refers to units processed by a breakfast cereal maker in August. Compute the total equivalent units of production
madam [21]

Answer:

Equivalent units of production= 746,000 units

Explanation:

Giving the following information:

Units completed 620,000 100%

Ending Work in Process 180,000 70%

<u>The weighted average method blends the costs and units of the previous period with the costs and units of the current period.</u>

<u></u>

Units completed in the period + Equivalent units in ending inventory WIP (units*%completion) = Equivalent units of production

Equivalent units of production= 620,000 + (180,000*0.7)

Equivalent units of production= 746,000 units

7 0
3 years ago
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