Two methods of accounting for uncollectible accounts are the direct write-off method and the allowance method.
<u>Explanation:</u>
Direct written-off method:
Here, the charging of bad debts in expense only when individual invoices are identified as uncollectible.
Allowance method:
Here, an estimate of future value of bad debt is charged in reserve account after a sale is completed.
<em>Difference between direct write-off method and the allowance method:</em>
Accuracy: The accurate amount of the bad debt expense is noted under direct write-off method as specific invoice is being noted, while only approximate value is charged off under allowance method.
Timing: The bad debt expense identification is delayed under direct write-off method, while it is quick under the allowance method.
Receivable line item: It is low under allowance method, since reserve is being evaluated against receivable amount.
Answer:
$38,675
Explanation:
sales price per pillow $97.50
total production 2,000 units
total sales 1,750 units
costs:
variable costs $22.10 per unit
fixed manufacturing $13.00 per unit
fixed administrative expenses $19.50 per unit
variable costing assigns only variable costs to inventory and COGS, so the COGS using variable costing = 1,750 units x $22.10 = $38,675
under variable costing, all fixed costs are period costs (fixed manufacturing and fixed administrative).
A point of purchase display has information about the product and encouragements to buy it. This term is a specialized form of sales promotion that costumers can come across next to a checkout counter. The purpose of a point of purchase display is to grab costumers' attention and make them be interested in products. It usually can be viewed as 'seasonal offer',or 'new in store' or some discount offer that draw people's attention.
Answer:
The reporting difference is not an ethical breach of confidence between the consumer and the industry.
Explanation:
The information being presented is not confidential information. As a result, there is no ethical breach of confidence. Usually, such a lawsuit for breach of confidence is an action originating in common law concerning information between the airline and the consumers, when one of these parties decides to use the available confidential information for an unfair gain or advantage. This is not the case here between the airlines and the consumers of its services. Therefore, the case for breach of confidence should deal with the restriction of the dissemination of commercially viable information.