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3 years ago

Activities Costs Cost Driver Account inquiry (number of hours) $61,000 2,400 hours

Business

2 answers:

11Alexandr11 [23.1K]3 years ago

6 0

Answer:

A. $25.42

Explanation:

Calculations:

The cost per hour for the account inquiry is calculated as by using below formula;

Total cost of Account Inquiry ÷ Total Hours of Account Inquiry.

$61,000 ÷ 2,400 = $25.42 per hour.

Dafna11 [192]3 years ago

6 0

Answer:

a) 25.41 per hour

Explanation:

Under activity-based costing method, overheads are charged to units produced using cost drivers unlike the traditional absorption costing where overhead are charged using volume-related bases only like direct labour hours.

Cost drivers are the most important factors that cause a change in the amount of overhead incurred. For example, an appropriate cost driver for account inquiry overhead would be number of hours . And this would be used to charged overhead accordingly

Activity Overheads rate = Activity overhead / number of cost drivers

Account inquiry overhead per hour

=$61,000 /2,400 hours

 = 25.41 per hour

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4 years ago

An investor owns 5,000 shares of IBM stock, $105 per share. He thinks that there is no large rise and possible drop in price. Th

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Answer:

If IBM stock price rises from $105 to $112, the profit associated with the passive strategy is $ 35,000 and the profit associated with the covered call writing strategy is $ 45,000 .

Explanation:

Shares = 5000

Price of shares = $105

Sell Price = $112

The profit associated with the passive strategy = $(112 - 105) × 5000

= $ 35,000

Now with covered call also included in the strategy the profit/loss from covered call can be calculated as

Strike Price = $110

Spot Price = $112

Total Shares on which Call options are sold = 50 × 100 = $5000

Total Premium received = 5000 × 4 = $20000

(Spot Price - Strike Price ) × Total Shares

= $(112 - 110) × 5000

= $10,000

Hence Net Profit = Premium received - $10,000 = $20,000 - $10,000

= $ 10000

Hence the profit associated with the covered call writing strategy

= $35,000 + $10,000

= $ 45,000

5 0

4 years ago

On January 1, 2017, Alison, Inc., paid $60,000 for a 40 percent interest in Holister Corporation’s common stock. This investee h

diamong [38]

Answer:

It will be valued at:

investment 70,000

goodwilll 1,000

patent 4,000

total 75,000

Explanation:

first we calcualte the equity of the company:

200,000 - 75,000 = 125,000 equity

then we calcualtethe investment proportion:

125,000 x 0.4 = 50,000 investment

15,000 x 0.4 = 6,000 patent

goodwill: 4,000 (60,000 - 56,000)

2017

income: 30,000 x 0.4 = 12,000

dividneds: 10,000 x 0.4 = (4,000)

amortization on patent

6,000 / 6 = 1,000 per year

2018

income: 50,000 x 0.4 = 20,000

dividneds: 15,000 x 0.4 = ( 6,000 )

amortization on patent: ( 1,000 )

50,000 + 12,000 - 4,000 - 1,000 + 20,000 - 6,000 - 1,000 = 70,000

then we add the patent and the goodwill

70,000 + 4,000 + 4,000 = 78,000

and wecheck for impairment:

as the fair value is 75,000 we decrease goodwill

6 0

3 years ago

April 2 Invested $34,620 cash and equipment valued at $15,500 in the business.

Tems11 [23]

Answer:

General Journal:

April 2:

Debit Cash $34,620

Debit Equipment $15,500

Credit Common Stock $50,120

To record the investment of capital in the business.

April 2: N/A

April 3:

Debit Supplies $771

Credit Accounts Payable $771

To record the purchase of supplies on account.

April 7:

Debit Rent Expense $663

Credit Cash $663

To record the payment of rent for the month.

April 11:

Debit Accounts Receivable $1,202

Credit Service Revenue $1,202

To record services rendered to a client.

April 12:

Debit Cash $2,679

Credit Unearned Service Revenue $2,679

To record the receipt in advance for management consulting.

April 17:

Debit Cash $2,580

Credit Service Revenue $2,580

To record the services rendered to Ferengi Co.

April 21:

Debit Insurance Expense $118

Credit Cash $118

To record the payment of insurance expense.

April 30:

Debit Salaries $1,196

Credit Cash $1,196

To record the payment of salaries for the month.

April 30:

Debit Supplies Expense $131

Credit Supplies $131

To record supplies used.

April 30:

Debit Office Computer $6,293

Credit Common Stock $6,293

To record the purchase of a new computer for office use with personal funds.

Explanation:

General journals are used to record all kinds of business transactions as they occur on a daily basis. They show the accounts to be debited and the ones to be credited. They are used to initially record transactions before they are posted to the general ledger.

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3 years ago

Taylor Company's attorney informs its client that it is possible, but not probable, that the company will lose a currently litig

mixas84 [53]

Answer:

Disclose the contingency and state that an estimate cannot be made.

Explanation:

Taylor Company's attorney informs its client that it is possible, but not probable, that the company will lose a currently litigated lawsuit. No reliable estimate of the potential loss is currently available. Taylor should accrue and/or disclose this potential loss BY DISCLOSING THE CONTINGENCY AND STATE THAT AN ESTIMATE CANNOT BE MADE.

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3 years ago