1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
vladimir2022 [97]
3 years ago
12

When the number of units in work in process and finished goods inventories decrease, absorption costing net operating income wil

l typically be greater than variable costing net operating income.
a. True
b. False
Business
1 answer:
Nastasia [14]3 years ago
7 0

Answer:

b. False

Explanation:

The difference between absorption costing net operating income and variable costing net operating income lies in the <em>fixed costs deferred in closing inventory</em>.

If Production is greater than Sales - <u>Increase in Finished Goods Inventory</u>, Absorption costing net operating income  will typically be greater than Variable costing net operating income.

However, If Production is less than Sales - <u>Decrease in Finished Goods Inventory</u>, Absorption costing net operating income  will typically be less than Variable costing net operating income.

You might be interested in
Number sixxxxxxxxxxxx
Licemer1 [7]

Answer:

bachelor degree in film

5 0
2 years ago
Read 2 more answers
Revenue is recorded when services have been performed or products have been delivered to customers. The accounting principle sup
VladimirAG [237]

Answer:

The revenue recognition principle

Explanation:

The revenue recognition principle states that revenue should be recorded when services have been performed or products have been delivered to customers and  not when cash is received for the service rendered

For example, if a supplier delivers 10,000 worth of goods to consumers in November and is paid for the goods in December. Revenue should be recognised in November and not December.

3 0
3 years ago
The Most recent financial statements for Moose Tours, Inc., appear below. Sales for 2016 are projected to grow by 20 percent. In
Aneli [31]

Answer:

$5,006.07

Explanation:

The external financing needed = Projected Increase in Assets - Increase in Liabilities - Increase in Retained Earnings

Projected Increase in Asset = Assets Value*Sales Growth Rate

Projected Increase in Assets = $364,720 * 20%

Projected Increase in Assets = $72,944

Increase in Liabilities = Liabilities * Sales Growth Rate

Increase in Liabilities = $69,600 * 20%

Increase in Liabilities = $13,920

<em>To calculate the Increase in Retained Earning, the below calculations are needed:</em>

a. Profit Margin Rate = Net Income / Sales * 100

Profit Margin Rate = 75,000 / 751,000 * 100

Profit Margin Rate = 9.99%

b. Dividend Payout Ratio = Dividend / Net Income * 100

Dividend Payout Ratio = 30,000 / 75,000 * 100

Dividend Payout Ratio = 0.4

Dividend Payout Ratio = 40%

Retention Rate = 1 - Dividend Payout Ratio

Retention Rate = 1 - 0.40

Retention Rate = 0.60

Retention Rate = 60%

c. Expected Sales = $751,000 * 1.20 = $901,200

So, the Increase in Retained Earning = Expected Sales * Profit Margin * Retention Rate = $901,200 *9.99% * 60% = $54,017.93

Therefore, External Fund Needed = $72,944 - $13,920 - $54,017.93 = $5,006.07

3 0
2 years ago
Shoe Box Stores is currently an all-equity firm with 25,000 shares of stock outstanding. Management is considering changing the
denpristay [2]

Answer:

d. Sell 210 shares and loan out the proceeds at 8 percent

Explanation:

Since the firm is using 35 percent leverage, Jamie can offset the firm's leverage by selling shares and loaning out 35 percent of her investment at 8 percent interest.

Number of shares to be sold = 600 shares * 0.35 = 210 shares

7 0
3 years ago
The cost of borrowing money is called _____.<br> risk<br> deposit<br> interest
GaryK [48]
<span>The cost of borrowing money is called the interest. Interest is what you pay to the loan company or lender when you borrow money from them. The interest is what they are charging when they give you money for a purchase now while you pay them back overtime. </span>
8 0
3 years ago
Read 2 more answers
Other questions:
  • Which of these terms means "limited resource"?
    10·2 answers
  • Callahan and megan plan to invest in corporate securities. while callahan plans to retire next year on his 65th birthday, megan
    15·1 answer
  • To find out how common domestic violence is in the general population, a questionnaire was sent out to a random sample of anonym
    11·1 answer
  • Should the law allow someone that becomes voluntarily incapacitated through intoxication or other means escape from a contractua
    11·1 answer
  • Under what section of the Statement of Cash Flows would you classify the purchase of equipment by issuing a long-term note payab
    7·1 answer
  • With respect to product quality, deming believed that a company should never ________. pay more attention to quality than to pri
    6·1 answer
  • The regression analysis at the bottom relates average annual per capita beef consumption (in pounds) and the independent variabl
    9·1 answer
  • What occurs when a business sells directly to the customer online and cuts out the middle man?
    12·1 answer
  • Sally hires a maid to work in her home for $280 per month. The maid is 25 years old and not related to Sally. During 2019, the m
    9·1 answer
  • Definition of tax fraud and tax reduction?
    14·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!