Answer:
The answer is d. payment to hire a security worker to guard the gate to the factory around the clock.
Explanation:
Let re-visit to the concept of Fixed cost before applying to the questions.
Fixed costs are costs which are unchanged given changes in production level.
a. payment to a electric utility is not fixed cost because higher level of production required higher electricity consumption which leads to higher cost of electricity.
b. cost of raw material is not fixed cost because the higher the production level, the higher the raw material required for production.
c. wages to hire assembly line workers is not fixed cost because the higher the production level, the more workers required and the higher the wages will be.
d. payment to hire a security worker to guard the gate to the factory around the clock is fixed cost because regardless of the production level, the security worker will work for the same amount of time and receive the same level of payment as his workload is much likely to remain the same.
So, d is the correct choice.
The answer is during the period of inventory valuation. It is
the cost linked with an entity’s inventory at every end of the accounting
period. The FIFO method means first in, first out technique which undertakes
that the first product that was obtained are also the first ones to be retailed
or sold.
Answer:
The overhead application rate was: $0.20 per direct labor cost
Explanation:
The overhead application rate is used to apportion the factory overheads to jobs or departments
The overhead application rate = Budgeted Overheads / Budgeted Activity
= $6,000/$30,000
= $0.20 per direct labor cost
Answer:
(a) In case when Appraisal Department has excess capacity then minimum transfer will be:
($130.21 - $7.82) = $122.39
Minimum Transfer Price = $122.39
(b) In case when Appraisal Department has no excess capacity then minimum transfer price will be:
($130.21 - $7.82) + ($163 - $130.21) = $155.18
Minimum Transfer Price = $155.18
(c) No, the management should not force to charge the Home- Loan department only $150.42.
