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3 years ago

The direct method of allocating service department costs allocates those costs to operating departments only

1 answer:

3 0

The given statement " The direct method of allocating service department costs allocates those costs to operating departments only " is TRUE.

Explanation:

The direct approach transfers costs to each service department depending on the share of the procurement value of each agency. Many support branches are neglected in their programs.

The direct method simply transfers the expenses of each helping department to the operational divisions.

The direct method directly assigns costs to the operating departments, without any allocation to the rest of the services. The method is easy to apply but it does not take into account that other services require services, so it is less accurate.

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The situation in which a person places greater value on a good as fewer and fewer people possess it is called the

Phantasy [73]

Answer:

The correct answer is: Snob effect.

Explanation:

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3 years ago

On January 1, 2017, Culver Company issued 10-year, $2,140,000 face value, 6% bonds, at par. Each $1,000 bond is convertible into

Dvinal [7]

Answer:

a) diluted earnings per share = 0

Explanation:

Diluted earnings per share (DEPS) is a recalculation of the basic EPS. The difference between DEPS and EPS is, EPS represents the current position of earnings per share. No changes in number shares and/or earnings in the future are incorporated in the basic EPS.

Whereas DEPS is a representation of not only the current position of earnings and shares but also includes the commitments an entity has already made whose occurrence may result in an increase/decrease in the amount of earnings and/or number of shares. For example, in the question Culver Company has issued 10-year convertible bonds which right now have no impact on basic EPS but if in the future these bond holders exercise their right of conversion, this would result in an increase in number of ordinary shares hence decreasing/diluting the basic EPS. The entities use DEPS to show shareholders the impact of such commitments on the basic EPS to improve their decision making.

So in 2017 none of the bonds were converted therefore no diluted earnings per share is calculated in 2017.

If all of the bonds were converted in 2017 the DEPS would have been calculated as follows:

The formula for calculating DEPS is as follows;

DEPS = (Net income + interest savings) ÷ number of ordinary shares + increase in ordinary shares as a result of conversion.

Tax savings as a result of conversion=$128400 ($2140000×6%). Because if bond holders convert into ordinary shares then Culver company will not have to pay them interest and hence the amount of interest is saved.

Increase in ordinary shares upon conversion= 29960 ($2140000÷$1000=2140 bonds. Each bond is convertible into 14 shares therefore, 2140×14=29960).

Now Lets calculate DEPS as follows;

DEPS = ($296000+$128400) ÷ 91000+29960

DEPS =$424400÷120960

DEPS = $3.5

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Answer:

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Mall Critical decisions on how to operate the company.

Some people don't want to work for a boss. Others have an innovative mind or brilliant idea

People also engage in business to make a difference in the world.

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