True. <span>The actual inventory holding cost incurred by an item depends on how long it actually spends in inventory. Holding costs are costs that happen when the inventory stays put and does not sell. The costs are calculated into the inventory costs along side of ordering and shortage costs. Holding costs can include the goods being damaged or spoiling due to the length of being held. Since they can be held for 5 days or 100 days (example) the total cost that is held depends on the length the items were held for. </span>
Answer:
a. The total profit would be positively affected as it increases
Explanation:
1. We calculate the value of revenue per 8000 gallons with the initial chemical compound and processed into the new variant
Revenue Initial Chemical Compound= 8000 gallons X ($52/gallon)
Revenue Initial Chemical Compound=<em><u> $ 416.000</u></em>
Revenue Chemical compound processed into the new variant=8000 gallons X ($83/gallon)
Revenue Chemical compound processed into the new variant= <u><em>$ 664.000</em></u>
2. If we consider that the other production costs will be the same for the two chemical compounds, then the only difference will be the processing cost to refine the basic compound into the new variant. For this reason, we substract only the value of processing the basic compound into the new variant for the revenue of this.
<u><em>$ 664.000 - $160.000= $504.000</em></u>
3. The benefit values for each case are:
Initial Chemical Compound: $416.000
Chemical compound processed into the new variant: $504.000
In conclusion, greater benefit is obtained by processing the basic compound in the new variant than if the basic compound were sold only
The amount of gain or loss does bli recognize if the transaction is structured as a direct asset sale to amy and brian
Net cash received by Ernesto = 590300-108675 = 481625
Gain or loss recognized = 481625-106000 = $375625
In financial accounting, an asset is a resource owned or controlled by a company or entity. It is anything that can be used to create positive economic value. An asset represents the value of an asset that can be converted into cash.
Examples of personal financial assets include cash and bank accounts, real estate, personal property such as furniture and vehicles, and investments such as stocks, mutual funds, and retirement benefits. Something or someone that is an asset is considered useful or helps a person or organization succeed. Our creativity in technology is our greatest asset. Plural noun. Company or personal property is anything that a person owns. [work]
Learn more about assets here
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