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3 years ago

In preparing a statement of cash flows using the indirectmethod, the Depreciation Expense ________

Business

2 answers:

motikmotik3 years ago

8 0

Answer:B -

Explanation:Depreciation is added back as an adjustment to the net income in the operating activities section.

egoroff_w [7]3 years ago

5 0

Answer:

The correct answer is letter "B": is added back as an adjustment to Net Income in the operating activities section.

Explanation:

Since net income is a starting point for calculating cash flows from operating activities, depreciation costs must be added back to net income if the method being used is the indirect process. Therefore, depreciation spending is recorded in the cash flow statement.

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Operating profit is essentially a measure of how efficient management is in generating revenues and controlling expenses. True F

Paul [167]

Answer:

true

Explanation:

Operating profit is referred to as the profit gained by the corporation in business. it is calculated by subtracting all expenses from the total profit over the given period.

it is considered to be the best way to determine how management tactics are helpful or beneficial for the organization. it helps to decide on the working policy for future goals.

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3 years ago

Crane, Inc. manufactures two products: missile range instruments and space pressure gauges. During April, 50 range instruments a

grigory [225]

Answer:

Requirement: Determine the overhead rate for each activity "Materials handling, Machine setups, Quality inspections"

Materials handling overhead rate = Total cost / Cost driver volume

Materials handling overhead rate = $30,000 / 1,000

Materials handling overhead rate = $30

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Machine setups overhead rate = $23,750 / 475

Machine setups overhead rate = $50

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Quality inspections overhead rate = $19,000 / 475

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3 years ago

Kasapreko Company Limited is a wholly Ghanaian-owned company with branches in Nigeria, South Africa and Germany. With relevant e

Tema [17]

Answer:

Explanation:

It should be understood that Kasapreko company limited is a Ghanian company that specialises in the production of herbal beverage products.

And the primary aim or goal of the company is to be able to have branches in every country of the world. But before this could be achieved, the company must be able to meet the demands of its country of production, and be able to attain or collect the necessary documents that will allow it to have branches outside the country it was founded. It must also be able to acquire the necessary licenses to operate in its desired countries.

Presently, the company has branches in countries like Nigeria and South Africa.

7 0

3 years ago

EB5.

rusak2 [61]

Answer:

1. Break-even in units is 6,000 units

2. Break-even in dollars is $720,000

3. Contribution Income Statement for 10,000 units

Sales revenue (10,000 x 120) $1,200,000

Variable cost (10,000 x 90) (900,000)

Contribution margin $300,000

Fixed cost (180,000)

Profit $120,000

4. Units to sell is 16,000

5. Dollars sale is $1,920,000

6. Contribution Income Statement for $2,400,000 sales revenue

Sales revenue (20,000 x 120) $2,400,000

Variable cost (120,000 x 90) (1,800,000)

Contribution margin $600,000

Fixed cost (180,000)

Profit $420,000

Explanation:

1. To compute the Break-even point in units,

Formula is BEP = total fixed cost / unit contribution margin

Step 1. Compute the unit contribution margin

Unit selling price $120

Less : variable cost 90

Unit contribution margin $30

Step 2. compute the unit break-even in units using the formula.

BEP = total fixed cost / unit contribution margin

BEP = $180,000 / 30

BEP = 6,000 units

2. To compute the Break-even point in dollars,

Formula is BES = total fixed cost / contribution margin ratio

Step 1. Compute the contribution margin ratio

Unit selling price $120

Less : variable cost 90

Unit contribution margin $30

So, $30 divided by $120 equals 25% (CMR)

Step 2. compute the unit break-even in dollars using the formula.

BEP = total fixed cost / contribution margin ratio

BEP = $180,000 / 25%

BEP = $720,000

3. To prepare the contribution margin income statement, we will multiply the units sold of 10,000 units by $120 to get the sales revenue. Then multiply 10,000 units by $90 to get the variable cost. Further illustration below;

Sales revenue (10,000 x 120) $1,200,000

Variable cost (10,000 x 90) (900,000)

Contribution margin $300,000

Fixed cost (180,000)

Profit $120,000

4. To compute the units to sell to realize the target profit we will use the formula:

(Total fixed cost + Target profit )/ unit contribution margin

Step 1. Compute the unit contribution margin

Unit selling price $120

Less : variable cost 90

Unit contribution margin $30

Step 2. compute the units to sell using the formula.

(Total fixed cost + target profit) / unit contribution margin

($180,000 + $300,000) / 30

Answer is 16,000 units

5. To compute the sales in dollars to realize the target profit of $300,000,

Formula is (Total fixed cost + target profit) / contribution margin ratio

Step 1. Compute the contribution margin ratio

Unit selling price $120

Less : variable cost 90

Unit contribution margin $30

So, $30 divided by $120 equals 25% (CMR)

Step 2. compute the target sales in dollars using the formula.

(Total fixed cost + target profit) / contribution margin ratio

($180,000 + $300,000) / 25%

$480,000 / 25%

Answer is $1,920,000

6. Contribution Income Statement for $2,400,000 sales revenue. FIRST we must determine how many unit are sold to have that sales revenue. $2,400,000 sales revenue divided by unit selling price equals 20,000 units. To further illustrate, see presentation below.

$2,400,000 / $120 = 20,000 units

Sales revenue (20,000 x 120) $2,400,000

Variable cost (120,000 x 90) (1,800,000)

Contribution margin $600,000

Fixed cost (180,000)

Profit $420,000

4 0

3 years ago

Walters Corporation sells radios for $50 per unit. The fixed costs are $525,000 and the variable costs are 60% of the selling pr

anyanavicka [17]

Answer:

26,000 units

Explanation:

The computation of the new break even point in units is shown below:

= (Fixed expenses ) ÷ (Contribution margin per unit)

where,

Fixed cost = $525,000 + $125,000 = $650,000

Contribution margin per unit = Selling price per unit - Variable expense per unit

= $50 - $25

= $25

So, the break even point in units is

= $650,000 ÷ $25

= 26,000 units

3 0

3 years ago

Read 2 more answers

In preparing a statement of cash flows using the indirect​method, the Depreciation Expense​ ________

In preparing a statement of cash flows using the indirectmethod, the Depreciation Expense ________