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Gekata [30.6K]
3 years ago
5

When switching from a traditional costing system to an activity-based costing system that contains some batch-level costs: Multi

ple Choice the unit product costs of both high and low volume products typically increase. the unit product costs of both high and low volume products typically decrease. the unit product costs of high volume products typically increase and the unit product costs of low volume products typically decrease. the unit product costs of high volume products typically decrease and the unit product costs of low volume products typically increase.
Business
1 answer:
Naddika [18.5K]3 years ago
3 0

Answer:

Option D- The unit product costs of high volume products typically decrease and the unit product costs of low volume products typically increase.

Explanation:

The reason is that the company has batch level costs which are fixed indirect costs that are to be assigned to the product and are fixed amounts say $100. Also assume that there are two type of units, Unit A and B. Suppose that the batch cost any number of units of A produced will remain the same and similarly for product B. This means if the units produced of A are at 20 unit per batch and product B produced are 10 units per batch then Activity Based Costing says that the unit cost of batch cost absorbed in Product A would be $5 ($100 / 20) and that for product B would be $10 ($100 / 10). So this example better explains cost behavior of batch cost which is fixed for different levels of production.

This means the fixed cost per unit which decreases with increase in production will keep decreasing if the number of units produced starts increasing. In other words, the similar class of units if are produced in higher quantity then the cost per unit will be decreased due to decrease in fixed cost per unit and vice versa.

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home country spendable

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The term that is being mentioned in this question is known as home country spendable. Like mentioned, this is income that represents the specific part of the home-country income that the assignee uses in order to pay the day-to-day purchases, unless the cost of the goods/services is higher in the host location, in which case a compensation package needs to be added.

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O’Connell & Co. expects its EBIT to be $83,000 every year forever. The firm can borrow at 11 percent. O’Connell currently ha
andrew11 [14]

Answer:

1. $3,59,666.66

2. $4,10,066.66

Explanation:

1. The computation of value of firm is shown below:-

As the Earning before interest and tax given remains the same, this impact that there is no growth rate in the earnings to consider.

= Earning before interest and tax × (1 - Tax) ÷ Cost of equity

= $83,000 × (1 - 0.35) ÷ (0.15)

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7 0
3 years ago
For a recent year, Best Buy reported sales of $42,410 million. Its gross profit was $9,690 million. What was the amount of Best
LiRa [457]

Answer:

The amount of Best Buy's cost of goods sold was $32,720 million

Explanation:

cost of goods sold = sales - gross profit

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Therefore, The amount of Best Buy's cost of goods sold was $32,720 million

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