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3 years ago

Which of the following statements is true of an activity-based costing system?

Business

1 answer:

eimsori [14]3 years ago

7 0

Answer:

The correct answer is A. It uses separate predetermined overhead allocation rates for each activity.

Explanation:

he ABC cost model allocates and distributes indirect costs according to the activities carried out in the process of manufacturing the product or service, identifying the origin of the cost with the necessary activity, not only for production but also for distribution and sale; The activity is understood as the set of actions that aims to incorporate added value to the product through the manufacturing process. Complementing the definition of activity, it should be mentioned that the ABC Model is based on the fact that products and services consume activities, and these in turn are the ones that generate costs.

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A(n) _____ is something a person wants to get out of a job or that brings them job satisfaction.

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Work value because it is part of a job

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2 years ago

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3 years ago

Machines A and B are mutually exclusive and have the following investment and operating costs. Machine A has a life of 3 years w

olganol [36]

Answer:

$-1081.01

$-2536.89

Explanation:

Equivalent annual cost method is a capital budgeting method used to choose between two projects with an unequal life span

The decision rule is to choose the product with the higher Equivalent annual cost

Equivalent annual annuity method is better for making this decision because if net present value is used, the project with the higher useful life would be chosen. this does not mean it is more profitable

EAA = $\frac{r(NPV)}{1 - \frac{1}{(1+ r)^{n} } }$

Net present value is the present value of after-tax cash flows from an investment less the amount invested.

NPV can be calculated using a financial calculator

Machine A

Cash flow in year 0 = - $5,000

Cash flow in year 1 = $800

Cash flow in year 2 = $900

Cash flow in year 3 = $1,000

I = 9%

NPV A = -2736.35

Machine B

Cash flow in year 0 = -$6,000

Cash flow in year 1 = $850

Cash flow in year 2 = $900

I = 9%

NPV B = -4462.67

EAA =

(0.09 x -2736.35) / ( 1 - (1.09)^3) = $-1081.01

(0.09 x -4462.67) / ( 1 - (1.09)^2)= $-2536.89

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2 years ago

Please answer these questions about opportunity cost

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3 years ago

The Candle Shop experienced the following events during its first year of operations, 2016:

Alik [6]

Answer:

(1) Acquired cash by issuing common stock. - Asset sources

(2) Paid a cash dividend to the stockholders. - Asset use

(3) Paid cash for operating expenses. - Asset use

(4) Borrowed cash from a bank. - Asset sources

(5) Provided services and collected cash. - Asset source

(6) Purchased land with cash. - Exchange transaction

(7) Determined that the market value of the land is higher than the historical cost. - Neither of all

Explanation:

1) The issue of stocks by the Shop for cash means there would be an increase in cash as well as equity

2) Payment of dividend requires an outflow of cash and as such asset is being used

3) Payment of cash for operating expenses also requires an outflow of cash and therefore an asset use

4) Borrowing cash from the bank is a liability that increases the cash (asset base of the shop) and therefore an asset source

5) Provision of services leads to revenue that leads to cash inflow and therefore an asset source

6) Purchase of land with cash involves an outflow of cash but increase in land and hence an exchange of cash for land in the asset base of the shop

7) Determining that the market value of land is higher that the historical cost does not directly reflect an accounting transaction as according to US GAAP all fixed assets are accounted for using the historical cost model which stipulates that non-current assets are initially recognized at cost and are subsequently carried at cost less accumulated depreciation and cumulative impairment losses.

Any upward adjustments due to changing circumstances are prohibited.

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3 years ago

Which of the following statements is true of an​ activity-based costing​ system?

Which of the following statements is true of an activity-based costing system?