Answer:
Cost tracing is important because it helps a firm to make wise decisions.
Explanation:
Cost tracing can be defined as the process of matching a cost directly with a product being produced.
Variable cost that are accompanied with inventory are direct materials, direct labour and variable manufacturing overheard. the variable manufacturing overheard flunctuates based on amount of production. example is cost of electricity and gas.
Variable costing can also be used in determining cost-volume-profit relationships. This cost-volume-profit analysis aids managers in comprehending the minimum amount of inventory they need to produce to break even on their cost.
Variable costing can also be used in valuing inventory which makes it easier to compare the profitability of a product.
Absorption costing on the other hand, is advantageous for a small business because it complies with GAAP ( Generally Accepted Accounting Principle).
Absorption costing systems are easy to setup and less complicated than other costing systems. but the drawback of absorption costing is the way they handle fixed overheard cost.
Answer:
why just 5 points? :( but thanks for the 5points atleast
Explanation:
Answer:
1. Dr Equipment 36000
Cr Cash 9000
Cr Notes payable 27000
( To record entry of equipment purchase on cash and on promissory note)
Explanation:
Equipment = 36000
Paid in cash = 36000 /4 =9000 and balance 36000-9000=27000 to be signed promissory note.
Answer:
The company’s return on common stockholders’ equity for the present year is 7.9%
Explanation:
The return on common stockholders’ equity of the company for the present year is computed as:
= Net Income - (Shares x 6% x Rate of shares)
where
Net Income is $171,000
Shares is 10,000
Rate is $100
Putting the values in the above:
=$171,000 - (10,000 x .06 x $100)
= $171,000 - $60,000
= $111,000
Return on common stockholders’ equity = [ $111,000 / Common stockholders’ equity on January 1 + Common stockholders’ equity on December 31 / 2 )]
= ([$111,000($1,200,000+$1,600,000 /2 )]
= $111,000 / ($28,00,000 / 2)
= $111,000 / $14,00,000
= 0.079 or 7.9%