Answer:
The correct answer is 2.39
Explanation:
TOTAL WAGES AND SALARIES = $433,000
DEPRECIATION = $160,000
OCCUPANCY = $169,000
TOTAL = $762,000
here for calculating the activity rate for activity cost pool , we will only use the given percentages of wages and salaries, depreciation and occupancy in the activity cost pool -
Amount Activity cost pool Amount allocated
Wages $433,000 20% $86,600
Depreciation $160,000 10% $16,000
Occupancy $169,000 10% $16,900
TOTAL $119,500
Cost driver machine hours 50,000
Rate per machine hour $119,500 / 50,000
2.39
Therefore the activity rate for activity cost pool is 2.39
Answer:
Explanation:
Because land never depreciates, Western Bank & Trust wanted to distribute a higher percentage of the purchase price to the building, rather than the land. By allocating 90% of the purchase price to the building, rather than a more accurate 70%, Western Bank & Trust increases the depreciation amount of the building each year. For tax purposes, the IRS requires that the Modified Accelerated Cost Recovery System (MACRS) be used as the depreciation method used by companies. Under this method, the IRS specifies the useful life for a specific asset. MACRS also ignores residual value of an asset at the end of its useful life. By stating that the building was worth 90% of the total purchase price, Western Bank is attempting to increase its tax deduction from the IRS, because only the building depreciates, not the land. This improper allocation of the total purchase amount violates GAAP principles, which require that accounting information be “relevant and have faithful representation.” The information must be “complete, neutral, and free from error” (Nobles, Mattison, & Matsumura, 2014). For Western Bank to provide complete, neutral, and free from error information, it should record the transaction honestly: 70% to the building, 30% to the land. This dishonest representation is harmful to the federal government in that it is allowing Western Bank to take more money than what it is owed. If these kinds of situations happen on a large scale, it could have a huge impact on the economy in general. Source: Nobles, T., Mattison, B., & Matsumura, E. M. (2014). Horngren's Accounting, 10th Edition. Pearson Education, Inc. Student 2
Answer:
Depreciation expense for 2018 and 2019 is $6,640 for each year
The amount of gain or loss that would be recognized on the asset disposal is -$2,920 (a loss)
Explanation:
Depreciation is the systematic recognition of the cost of an asset in the p/l overtime as a result of use. When accumulated, it is known as accumulated depreciation which is deducted from the cost of the asset to get the net book value or carrying amount of the asset. The cost of the asset includes all necessary cost incurred to make the asset available for use.
The cost less the salvage value divided by the estimated useful life gives the annual depreciation.
Total cost = $36,000 + $1,200
= $37,200
Annual depreciation
= ($37,200 - $4,000)/5
=$6,640
Net book value on 1 January 2020
= $37,200 - 2($6,640)
= $23,920
Gain/(loss) on disposal
=$21,000 - $23,920
= -$2,920
Answer:
cannot be reduced by producing less output.
Explanation:
In the case of the fixed cost of production that lies in the short run does not decreased while generating the lower output as the fixed cost are considered to be the independent on the other hand the variable cost changes with the output. Moreover, the total cost could be divided into the fixed cost where the firm could incurred prior generating an output
So the above statement should be considered
Answer:
A. Cross- Functional Group
Explanation:
A Cross Functional team/group or simply referred to as CFT represents a team that comprise of persons drawn from different areas, departments and functions within an organisation. For instance members of a CFT can be from sales, human resource, marketing and accounting among others.
Members of a CFT are usually personnels from the lower cadres in an organisation and their coming together can be good for making decisions, deliberating on issues bothering the company and they can even be put together by top management as a working group to achieve certain goals.
A unique advantage for Carla to set up a Cross-functional group is inherent in the fact that employees of the lower levels of management that are affected by the action would cut across several units and departments and brining personnel together from this various departments will help to develop solutions to the problem at hand.
