Answer:
1. $44
2.$36
Explanation:
Absorption Costing
Include all manufacturing costs, both variable and fixed in product cost.
<u>Product Cost </u>
Direct materials $13
Direct labor $19
Variable overhead $4
Fixed overhead $8
Total $44
Variable Costing
Include only the variable manufacturing cost in product costing.
<u>Product Cost </u>
Direct materials $13
Direct labor $19
Variable overhead $4
Total $36
Answer:
Correct answer is (a) customers are making payments quickly
Explanation:
Accounts receivable turnover analysis is used to determine if a company is experiencing problem collecting the sales make on credit from the customers. A high receivables turnover ratio can indicate that a company's collection of accounts receivable is efficient and that the company has a high proportion of quality customers that pay their debts quickly
Answer:
B. The rational decision making model assumes that an individual is able to identify all the relevant options in an unbiased manner
Explanation:
Rational decision making is a process wherein a problem is identified, solution to such a problem is found, which helps in taking right and logically correct decisions.
The process stresses upon objectivity and analysis rather than taking decisions based upon intuition or subjectivity.
The model has certain assumptions such as , availability of perfect information to the decision maker and the availability of time with the decision maker to evaluate and analyse each and every option with other options.
One of the limitations of the model being it's assumption that individuals will be able to identify all relevant options in an objective unbiased manner.
Answer:
The answer is: the following three should be used.
- net present value (NPV)
- traditional payback period (PB)
- the modified internal rate of return (MIRR)
Explanation:
First of all, the NPV of the four projects must be positive. Only NPV positive projects should be financed. If the NPV is negative, the project should be tossed away. This is like a golden rule in investment.
Now comes the "if" part. What does the company value more, a short payback period or a higher rate of return.
If the company values more a shorter payback period (usually high tech companies do this due to obsolescence), then they should choose the project with the shortest payback period.
If the company isn't that concerned about payback periods, then it should choose to finance the project with the highest modified rate of return. This means that the most profitable project should be financed.