Let us see it from a cost-efficiency point of view. We have that every unit of the first selles costs 40$. But the total cost might be higher, since there is a chance for defect. On average, on 3% of the cases the defect will happen and it will cost him 500$. Hence, on average, a fence unit from producer a costs 40$ and has a repair cost of 3%*500$=15$. The total thus is 55$. For the second provider of fences, the standard cost is 50$. Similarly, the average repair cost is 0,5%*500$=2,5$. Hence, the total cost per unit is 52,5$ (total cost=upfront payment+repair costs). We see thus that the lady should win the bid; even if you pay more upfront, the difference in durability makes up the cost difference.
Answer:
True
Explanation:
Machine is the key component while processing the raw material into finished goods.
This is related to the goods as machine hours are directly related with the number of units.
Accordingly, there is a belief of management that the overheads are directly related to machine hours.
And thus, they are allocated based on machine hours under traditional costing. As therefore, the statement is true as states all of the above things.
Answer:
Latinmore made money on the exchange rate movement. It was an exchange rate gain of $369,566. The marginal tax impact was $147,826.
Explanation:
Since the standard practice in accounting is to reflect the current situation of the company, any change in the exchange rate that affects the assets of the company abroad must be recognized. The financial income of exchange gains are registered in the Income Statement and affects the base to pay income tax.
Answer:
The depreciation expense for Year 1 under units of production method is $5200.
Explanation:
The units of production method of depreciation charges the depreciation expense based on the activity level for which the asset was used during a period. There is an estimated useful life of the asset in terms of how many units it is expected to produce through out its useful life. The formula for units of production method of depreciation is,
Depreciation charge per unit = (Cost - Salvage value) / Total estimated useful of asset in units
Thus, per unit depreciation is = (30000 - 6000) / 60000 = $0.4 per mile
In the first year, the asset is used for 13000 miles so depreciation expense for the year is,
Depreciation expense Year 1 = 0.4 * 13000 = $5200
