You are considering a stock investment in one of two firms (Lots of Debt, Inc. and Lots of Equity, Inc.), both of which operate
1 answer:
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Answer:
option (c) $25 million
Explanation:
Data provided in the question:
The marginal propensity to consume in Frugalia, MPC = 0.60
Increase in spending = $10 million
Now,
The total increase in income
= × Increase in spending
on substituting the respective values, we get
= × $10 million
= × $10 million
or
= 2.5 × $10 million
or
= $25 million
Hence,
The answer is option (c) $25 million
Answer:
Balance for the Factory Overhead account: 19,000 credit
Explanation:
We will first, calculate the overhead rate based on the predetermination overhead rate:
The total manufacturing cost will be distributed over the cost driver. In this case, labor cost:
360,000/180,000 = 2 overhead rate
Then, we calculate the applied overhead 203,000 x 2 = 406,000
Now, the balance for factory overhead account:
Actual overhead: 387,000 debit
payable, accumulated depreicaiton and other 387,000 credit
WIP 406,000 debit
Applied Overhead 406,000 credit
Balance:
406,000 - 387,000 = 19,000 credit