Why is it crucial that H.R managers be fully aware of their company's

A company's Office Supplies account shows a beginning balance of $630 and an ending balance of $460. If office supplies expense

nalin [4]

The correct answer is that there was $3,080 worth of office supplies purchased during the period.

In order to answer this question you know that the company started with $630 worth of office supplies and ended the year with $460 worth, or $170 less than they started with. The company used $170 of supplies from inventory, so they needed to purchase another $3,080 in order arrive at the $3,250 that we know was the total expense during the reporting period.

5 0

3 years ago

If management wants the most accurate product cost, which of the following costing methods should be used? a. Volume-based costi

Fynjy0 [20]

1. If management wants the most accurate product cost, which of the following costing methods should be used?

Answer:

c. Activity-based costing

Explanation:

In activity based costing, You only assign cost to a certain products and services based on your actual consumption. This will include indirect cost that might be overlooked by other from of costing methods.

For example, other type of costing might only account the total material or price of the machines when calculating the total cost of creating product. As a matter of fact, this will undervalue the total cost.

You need to calculate the expense that is not directly involved in the production but still necessary for the operation (such as the cost of fixing broken parts, the cost of daily maintenance, etc). All of these things will be included in activity-based costing.

2. Which costing method tends to overstate the cost of high-volume products?

Answer:

A. traditional volume based accounting

Explanation

Traditional volume based costing will calculate all overhead costs (such as salary paid per hour to employees) and include it to the overall cost of the production without any additional adjustment.

This will cause an overstate in the cost of high-volume products Because longer hours of work does not necessarily translate to proportionate increase in productivity.,

3. Disadvantages of activity-based costing include

Answer:

-It is not acceptable under GAAP for external reporting.

-It can be costly to implement.

Explanation:

GAAP does not accept activity-based costing becasue it overlooked Organization-sustaining costs that will exist regardless of how much goods the company produce. (For example Cost of factory security, Cost of electricity for heating and air conditioning and office administration rent).

Activity based costing can be costly because it need a more precise evaluation of their indirect cost. Which means that they need to hire more experts to specifically pay attention to indirect cost which often time untraceable by common employees.

5 0

3 years ago

Perit Industries has $135,000 to invest. The company is trying to decide between two alternative uses of the funds. The alternat

Juli2301 [7.4K]

Answer:

1. Net present value of Project A = -41,449.96

2. Net present value of Project B = $143,746.85

3. I would recommend that company accept Project B.

Explanation:

Note: This question is not complete as the requirement are omitted. The requirements are therefore provided to complete the question before answering it as follows:

Perit Industries has $135,000 to invest. The company is trying to decide between two alternative uses of the funds. The alternatives are:

Project A Project B

Cost of equipment required $ 135,000 $ 0

Working capital investment required $ 0 $ 135,000

Annual cash inflows $ 25,000 $ 63,000

Salvage value of equipment in six years $ 9,800 $ 0

Life of the project 6 years 6 years

The working capital needed for project B will be released at the end of six years for investment elsewhere. Perit Industries’ discount rate is 17%.

Required:

1. Compute the net present value of Project A. (Enter negative values with a minus sign. Round your final answer to the nearest whole dollar amount.)

2. Compute the net present value of Project B. (Enter negative values with a minus sign. Round your final answer to the nearest whole dollar amount.)

3. Which investment alternative (if either) would you recommend that the company accept?

The explanation of the answers is now provided as follows:

1. Compute the net present value of Project A. (Enter negative values with a minus sign. Round your final answer to the nearest whole dollar amount.)

Cost of equipment required = $135,000

Using the formula for calculating the present value of an ordinary annuity, the present value (PV) of the annual cash inflows can be calculated as follows:

PV of annual cash inflow = Annual cash inflow * (1 - (1 / (1 + discount rate))^Project life) / discount rate) = $25,000 * ((1 - (1 / (1 + 0.17))^6) / 0.17) = $89,729.62

The present value (PV) of the salvage value can be calculated as follows:

PV of salvage value = Salvage value / (1 + + discount rate)^Project life = $9,800 / (1 + 0.17)^6 = $3,820.42

Net present value of Project A = PV of annual cash inflow + PV of salvage value - Cost of equipment required = $89,729.62 + $3,820.42 - $135,000 = -41,449.96

2. Compute the net present value of Project B. (Enter negative values with a minus sign. Round your final answer to the nearest whole dollar amount.)

Working capital investment required = $135,000

Using the formula for calculating the present value of an ordinary annuity, the present value (PV) of the annual cash inflows can be calculated as follows:

PV of annual cash inflow = Annual cash inflow * (1 - (1 / (1 + discount rate))^Project life) / discount rate) = $63,000 * ((1 - (1 / (1 + 0.17))^6) / 0.17) = $226,118.64

The present value (PV) of the Working capital investment required can be calculated as follows:

PV of Working capital investment required = Working capital investment required / (1 + + discount rate)^Project life = $135,000 / (1 + 0.17)^6 = $52,628.21

Net present value of Project B = PV of annual cash inflow + PV of Working capital investment required - Working capital investment required = = $226,118.64 + $52,628.21 - $135,000 = $143,746.85

3. Which investment alternative (if either) would you recommend that the company accept?

From parts 1 and 2 above, we have:

Net present value of Project A = -41,449.96

Net present value of Project B = $143,746.85

Since the Net present value of Project A is negative, it should be rejected.

Since the Net present value of Project B is positive, it should be accepted.

Therefore, I would recommend that company accept Project B.

6 0

3 years ago

Yesterday a transformer in tenisha’s neighborhood blew and her entire block lost electricity. because she must upload her week 4

V125BC [204]

Public hotspots such as the one Tenisha encountered in a local coffee shop allows people to gain Wi-fi through a Wireless Local Area Network (WLAN) which uses a router that is connected to an internet service provider. Tenisha, upon clicking the hotspot name, will be prompted to connect to the network. Afterwards, she may be required to type in a password in order to be connected to the internet.

8 0

3 years ago

A company had the following purchases during its first year of operations: Purchases January: 26 units at $113 February: 36 unit

monitta

Answer:

$6490

Explanation:

The computation of the ending inventory is shown below:

= (January ending inventory in units × price) + (February ending inventory in units × price) + (May ending inventory in units × price) + (September ending inventory in units × price) + (November ending inventory in units × price)

= (8 units × $113) + (9 units × $124) + (13 units × $136) + (7 units × $144) + (11 units × $154)

= $904 + $1,116 + $1,768 + $1,008 + $1,694

= $6,490

3 0

2 years ago