Answer:
Companies that use ABC allocate all costs including direct materials, direct labour and manufacturing overhead to the product based on an activity cost allocation rate.
This statement is False.
Explanation:
In ABC, it is only the overhead that will be allocated to the product based on an activity cost allocation rate (cost drivers). Direct material cost and direct labour cost will be recorded at the actual cost incurred on direct material and direct labour.
Answer:
$1.45
Explanation:
Data provided in the question
Variable cost per component = $1.45
Full cost = $1.91
Selling price per component = $4.95
By considering the above information, the lowest price that would be accepted for the component is equal to the variable cost per unit i.e $1.91 and plus the full cost includes both the variable and fixed cost plus the fixed cost would be recovered by normal sale also
So in this case we only considered the variable cost per component
Answer:
The correct Answer is B.
The seller is likely to recognize interest revenue.
Explanation:
What is interest revenue?
Interest revenue is the earnings that an entity receives from any investments it makes, or on debt it owns.
The Logic here posits that for every money invested or loaned out, some interest should accrue. The goods which have been taken delivery of to the buyer becomes a debt which normally should be paid with no strings attached.
However, because of the term in the contract which stipulates, that the payment will be made after 15 months, the concept of the <em>Time Value of Money</em> which is the bedrock of the Principle of Interest Revenue engages.
The Time Value of Money is a basic financial concept that holds that money in the present is worth more than the same sum of money to be received in the future. This is true because money that you have right now can be invested and earn a return, thus creating a larger amount of money in the future.
It therefore follows that if a party in a business transaction is being asked to forfeit the time value of money then it ought to be compensated for such, hence Interest Revenue.
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Answer:
Bulla should choose to achieve 41% of dividend payout ratio with this growth.
Explanation:
Debt to Equity ratio = 0.3
Debt / Equity = 0.3
As we know the debt ratio to Equity is calculated when equity is considered one.
So,
Total Asset to sales = 1.55
Profit Margin ratio = 6.2%
ROE = Profit Margin x Total Assets to sales ratio
ROE = 6.2% x 1.55
ROE = 0.0961
Sustainable Growth rate = (ROE * Retention Ratio)/(1 - ROE*Retention Ratio)
14% = ( 0.0961 x retention rate) / ( 1 - retention rate)
0.14 x ( 1 - retention rate) = 0.0961 x retention rate
0.14 - 0.14 retention rate = 0.0961 retention rate
0.14 = 0.0961 retention rate + 0.14 retention rate
0.14 = 0.2361 retention rate
Retention rate = 0.14 / 0.2361
Retention rate = 0.5930
Retention rate = 59.30%
Payout ratio = 100% - 59.3% = 40.7%
A master plan is devised for C) long-range goals
