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Black_prince [1.1K]
3 years ago
14

Donovan Company incurred the following costs while producing 500 units: direct materials $10 per unit, direct labour $25 per uni

t, variable manufacturing overhead, $15 per unit, total fixed overhead costs, $10,000; variable selling and administrative costs, $5 per unit; total fixed selling and administrative costs, $7,500. There are no beginning inventories.
What is the operating income using absorption costing if 500 units are sold for $100 each?

a. $500
b. $2,500
c. $2,750
d. $5,000
Business
1 answer:
Dafna1 [17]3 years ago
8 0

Answer:

Option (D) is correct.

Explanation:

Unit product cost:

= Direct materials + Direct labor + Variable manufacturing overhead + Fixed manufacturing overhead

= $10 + $25 + $15 + $20

= $70

Operating income using absorption costing:

= (500 units × $100) - (500 units × $70) - (500 units × $5) - $7,500

= $50,000 - $35,000 - $2,500 - $7,500

= $5,000

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Acheson Corporation, which applies manufacturing overhead on the basis of machine-hours, has provided the following data for its
Amanda [17]

Answer:

Over-applied by $3,842

Explanation:

If<em>, Applied Overheads > Actual Overheads, overheads have been overapplied.</em>

<em>and</em>

<em>Since, Applied Overheads < Actual Overheads, overheads have been under- applied.</em>

Applied Overheads = Predetermined rate x Actual Activity

where,

Predetermined rate = Budgeted Overheads  ÷ Budgeted Activity

therefore,

Predetermined rate = $ 157,050 ÷ 4,500

                                  = $34.90

Applied Overheads = $34.90 x 4,580 = $159,842

<em>Since, Applied Overheads > Actual Overheads, overheads have been overapplied.</em>

Over-applied overheads = $159,842 - $ 156,000 = $3,842

5 0
2 years ago
________ is a financial institution owned by investors that focuses on business customers, providing bank accounts along with sp
Virty [35]

Answer:

Commercial bank.

Explanation:

A commercial bank is a financial institution that provides financial services to the public such as offering loan services, accepting deposits, foreign exchange, providing bank accounts. They encourage savings and are good sources of finance to businesses and industry.

3 0
3 years ago
Paul’s will creates a General Power of Appointment Trust (GPOA) that distributes income to his wife annually for life and gives
Ivanshal [37]

Answer: D. The GPOA Trust automatically qualifies for the unlimited marital deduction because Paul's wife has a general power of appointment over the trust's assets.

Explanation:

General Power of Appointment Trust (GPOA) refers to a power of appointment which is a legally binding provision that's contained in a trust such that the beneficiary possess the authority to alter the beneficiaries of the trust.

In this case, Paul's wife possess the power of appointment to anyone on her behalf. Therefore, The GPOA Trust automatically qualifies for the unlimited marital deduction because Paul's wife has a general power of appointment over the trust's assets.

3 0
2 years ago
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ki77a [65]

Answer:

Explanation:

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However, it is true that the quality of the institutions colonized by the Europeans is related to whether the climate or the diseases in the colonized regime allowed the European settlers to live in those areas.

(c) It is true that the low quality institutions make it difficult to protect property rights and enforce contracts. The rights of the people are all dependent on how the State allows the people to enjoy them.  

(d) It is true that the low-quality institutions are central to the theory of poverty traps that states that countries need a big push to felicitate convergence in living standards to the developed world.

 

8 0
3 years ago
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Karolina [17]

C. $1,000

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8 0
3 years ago
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