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4 years ago

1. Choose a real or made up example of a company, and describe at least three variable costs the

Business

1 answer:

Softa [21]4 years ago

4 0

Answer:

Let Sanguine Wines Ltd. refer to a hypothetical company for the purpose. Following would constitute Sanguine Wines Ltd's variable costs:

Raw Material or input prices: The raw material or inputs of sanguine wines limited purchases from suppliers such as dried grapes, sugar and the likes. The price of such inputs is prone to seasonal fluctuation and thus variable
The performance related incentive for employees for number of bottles of wine created, would be variable cost as it would vary with the no of bottles produced.
Discount allowed to distributors which varies based upon the number of bottles purchased by them.
Commission paid to wine salesperson which varies with respect to bottles sold.

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Mercury Inc. purchased equipment in 2019 at a cost of $400,000. The equipment was expected to produce 700,000 units over the nex

Wittaler [7]

Answer:

See explanation section

Explanation:

We know,

Annual depreciation rate under Units-of-production = Depreciable amount/Overall (expected) production

Given,

Purchase value = $400,000

Residual value = $50,000

Expected production = 700,000 units

Depreciable Amount = $(400,000 - 50,000) = $350,000

Annual depreciation rate = $350,000/700,000

Depreciation rate = $0.50

Thrrefore, Accumulated depreciation from 2019 to 2021 = (100,000 + 160,000 + 80,000)*$0.50

= $170,000

We know, Book value of asset = Cost price - Accumulated depreciation

Book value = $400,000 - $170,000 = $230,000

Again, Loss on sale of equipment = Book value - Sales price

Loss on sale of equipment = $230,000 - $210,000

Loss on sale of equipment = $20,000

The journal entry to record the sale =

Debit Cash $210,000

Debit Accumulated Depreciation $170,000

Debit Loss on sale $20,000

Credit Equipment $400,000

7 0

3 years ago

Read 2 more answers

The Borio Company had an asset with an $8 book value and a $7 market value; it decided to distribute the asset as a property div

ankoles [38]

Answer:

The net income will decrease and also the total assets will also decrease

Explanation:

Here, we want to know the combined effect on net income and total assets of company that made a decision of distributing assets as a property dividend.

As the asset value is down the entry is asset (credit) and loss on asset (debit)

This will effect the net income as it will come down and total assets value also come down

7 0

3 years ago

If it costs $100000 to put on an event for four weeks (28 consecutive nights) how much revenue per night is needed to make $2000

12345 [234]

Answer:

the answer would 4285.7142 per night

8 0

3 years ago

Read 2 more answers

A cartel is difficult to maintain for which of the following reasons? A. Consumers substitute away from the good when the price

Ulleksa [173]

Answer:

The correct answer is option B.

Explanation:

A cartel can be defined as a group of independent producers who come together to form a group in order to improve profits. In an oligopoly market, there are few firms in the market. The firms are such that the economic decisions of one firm or producer affects their rivals.

In such a situation, the firms come together to form a cartel to protect their interests. In a cartel, production limits are set for all producers so that the price is high. But cartels are generally short-lived.

This is because the individual producers have incentives to cheat the cartel by producing more than a set limit so that they can increase their profit and market share.

4 0

3 years ago

Sally is in the business of purchasing accounts receivable. Last year, Sally purchased an account receivable with a face value o

marusya05 [52]

Answer:

Sally’s basis in the Account Receivable is $60,000

She has a bad debt deduction of $0. There is no Bad debt deduction for Sally. Rather she made a profit on the transaction.

Explanation:

The Account Receivable can be defined as a Debt Instruments. Debt instruments in accounting are valued at Lower of Cost or Net Realizable Value.

Cost is the amount of cash or its equivalent that was expended to obtain an asset. The cost of this Account Receivable therefore is 60,000

Net realizable value (NRV) is the value that can be realized from the sale of an asset. Net Realizable value of the Account Receivable therefore is 80,000.

Therefore the value to be utilized as the value of the Account Receivable 60,000.

Below is the accounting entries to record the transaction and recognized profit.

For the Face Value of the Debt

Debit: Account Receivable Account(Debtors) 60,000.00

Credit: Account Receivable Purchase Account 60,000.00

For the payment of the A/R

Debit: Account Receivable Purchase Account 60,000.00

Credit: Bank 60,000.00

For the settlement received on the A/R

Debit: Bank 65,000.00

Credit: Account Receivable Account(Debtors) 60,000.00

Credit: Profit & Loss 5,000.00

8 0

3 years ago