If product costs are misclassified as selling costs, the average cost per unit will be understated.a. Trueb. False

Business

1 answer:

gladu [14]3 years ago

5 0

Answer:

Product costs are mostly prime costs (Variable cost). Now lets check where this misclassification occurs.

There are 3 stages of absorption costing.

Stage 1: Allocation

Stage 2: Apportionment

Stage 3: Absorption

Misclassification of product cost of product A occurs at Stage 1.

This means that the share of product cost of A, which is misclassified as selling cost will be equally shared with other products in the stage 2. This sharing of cost will lower the average cost per unit of product A and increase the average cost per unit of other products. Hence, Its true.

You might be interested in

___ are poorly trained and inadequately managed employees who mean well but have the potential to cause much damage.

madam [21]

Answer:

Negligent insider.

Explanation:

<u>Negligent insider</u> are poorly trained and inadequately managed employees who mean well but have the potential to cause much damage.

Negligent insiders are the employees who are given access to the organization network. They are the ones who unintentionally make an error with the security privacy or due to their negligence they get trapped in phishing emails, risky websites, leakage of the company´s confidential data, etc. These mistakes cause a big loss to the company and these insiders turn out to be a threat to the organization. The company needs to strategies on how to mitigate these threats. They can mitigate these issues by properly training and controlling the accessibility of employees.

3 0

3 years ago

You are considering purchasing stock in Canyon Echo. You feel the company will increase its dividend at 4.6 percent indefinitely

MAXImum [283]

price per share of the company's stock is $53.28

Explanation:

Under dividend growth model a stock is overvalued or undervalued assuming that the firm’s expected dividends grow at a value g forever, which is subtracted from the required rate of return or k.

Therefore, the stable dividend growth model formula calculates the fair value of the stock as P =D1 / ( k – g ).

P= price per share

D1 = current dividend

k = required return

g = growth rate

P= $3.41 ÷ (11 % - 4.6% ) =( 3.41 ÷ 0.064 )= $53.28

$P= $3.41 ÷ (0.11 - 0.046 ) =( 3.41 ÷ 0.064 )= $53.28$