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3 years ago

Al's Donuts produces about 600 dozen doughnuts daily. If flour prices increase 20 percent

Business

1 answer:

Sergeeva-Olga [200]3 years ago

4 0

Answer:

(D) marginal cost, the average variable cost, and the average total cost will shift up.

Explanation:

Given the nature of business of AI's Donuts, flour prices is part of the variable cost of the business as it will change will any change in the output of the firm.

An increase in flour prices, a variable cost, will have the following effect on the following costs.

Average variable cost will increase since flour is a variable cost.

Average total cost will increase since average total cost = average variable cost + average fixed cost.

Marginal cost will increase since marginal cost = (change in total cost)/(change in quantity). Marginal cost will thus increase since total cost will increase.

Average fixed cost will however remain unchanged since only variable cost will increase.

Therefore, option (D) is correct as marginal cost, the average variable cost, and the average total cost will shift up.

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Lumpkin Company sells lamps and other lighting fixtures. The purchasing department manager prepared the following inventory purc

KATRIN_1 [288]

Answer:

February.

Desired ending inventory = 10% of March Cost of goods(COGS):

= 10% * 35,000

= $3,500

Inventory needed = COGS + ending inventory

= 32,000 + 3,500

= $35,500

Beginning inventory = January ending inventory = $3,200

Required Purchases = Inventory needed - Beginning inventory

= 35,500 - 3,200

= $32,300

March

Desired ending inventory = 10% of April COGS:

= 10% * 40,000

= $4,000

Inventory needed:

= 35,000 + 4,000

= $39,000

Beginning inventory = February ending inventory = $3,500

Required purchases:

= 39,000 - 3,500

= $35,500

8 0

3 years ago

Georgia Products Inc. completed and transferred 163,000 particle board units of production from the Pressing Department. There w

Lerok [7]

Answer:

Pressing Department. Round "cost per equivalent unit" answers to the nearest cent.

a. Total conversion cost $

b. Conversion cost per equivalent unit $

c. Direct materials cost per equivalent unit $

a. Total conversion cost 252.900

b. Conversion cost per equivalent unit 0.61

c. Direct materials cost per equivalent unit 3.20

Explanation:

Solution

a. Total conversion cost 252.900

b. Conversion cost per equivalent unit 0.61

c. Direct materials cost per equivalent unit 3.20

Statement of Equivalent Units(Weighted average)

Material Conversion cost

Units Complete % Equivalent units Complete % Equivalent units

Transferred out 163.000 100% 163,000 100% 163,000

Ending WIP 14,000 100% 14,000 40% 5,600

Total 177,000 Total 177,000 Total 168.600

Cost per Equivalent Units (Weighted average)

COST Material Conversion cost TOTAL

Beginning WIP Inventory Cost $ 0

Cost incurred during period 628.350 252.900 881.250

Total Cost to be accounted for 566,100 102,900 669,000

Total Equivalent Units 177,000 168.600

Cost per Equivalent Units 3.20 0.61 3.81

3 0

3 years ago

Tano issues bonds with a par value of $180,000 on January 1, 2016. The bonds' annual contract rate is 8%, and interest is paid s

Sauron [17]

Answer:

The discount on the bonds issuance is $9,138.00

Explanation:

discount on bonds at issuance=bonds face value-bonds cash proceeds

bonds face value is $180,000

bonds cash proceeds =$170,862

Discount on bonds at issuance=$180,000-$170,862

Discount on bonds at issuance=$9,138.00

The necessary journal entries to record the bonds issuance are follows:

Dr Cash $170,862.00

Dr discount on bonds issue $9,138.00

Cr Bonds payable $180,000

The discount on the bonds would amortized over relevant years

5 0

3 years ago

On January 1, 2021, Laramie Inc. acquired land for $6.2 million. Laramie paid $1.2 in cash and signed a 6% note requiring the co

stepladder [879]

Answer:

The amount Laramie should record the purchase of land is $6.2 million.

Explanation:

The costs of a fixed asset refer to the purchase price and other relevant costs which are incurred in order to the location and working condition required to operate the fixed asset in way that it is intended.

The other relevant costs that are added to the purchase price to arrive at the cost of the fixed assets include professional fees, non-refundable taxes or levies, and among others.

If any trade discount or rebate is given, this will be deducted from the purchase price to arrive at the cost.

Any interest required to be paid on the delayed payment in order to reflects the time value of money are not part of the cost of the asset but expensed in the year they are incurred.

From the question, the land acquired is a fixed asset. Based on the explanation above, the total cost of the asset is $6.2 million. The interest from the 6% interest rate on the remaining $5 million will be part of the cost of the land but it will be expensed in the year they are incurred.

Therefore, the amount Laramie should record the purchase of land is $6.2 million.

6 0

3 years ago

If a new firm was launched to help businesses comply with the affordable care act, that opportunity was created by ________.

vekshin1

That opportunity was created by political actions and regulatory changes, government subsidiaries. An opportunity is a favorable set of circumstances that creates need for a new product service or idea. An opportunity should have essential qualities such as attractive, timely durable and anchored in a product, service or business that adds value for its buyer or end user.

8 0

3 years ago