Answer:
Dr Material Inventory $13,020
Cr Trade Payables $13,020
Dr Work In Progress $9,742
Cr Material Inventory $9,742
Explanation:
On 7th May the double entry would be to record the inventory purchases on credit which would increase the inventory by $13,020 (620*21) as under:
Dr Material Inventory $13,020
Cr Trade Payables $13,020
The material sent to production or manufacturing team would be recorded as increase in the work in progress by the value of the material issued which is $9,742 (211*$19 + 273*$21).
Dr Work In Progress $9,742
Cr Material Inventory $9,742
Materials that become independent components of the finished product and whose cost can be easily and conveniently traced to the finished products are <u>direct materials.</u>
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<h3>What are direct materials?</h3>
Those components pass into a manufactured product are called as Direct materials. Direct materials cost refers to the cost of direct materials which may be without problems recognized with the unit of production.
For example, the value of glass is an immediate substance cost in light bulb manufacturing.
Hence, Materials that become independent components of the finished product and whose cost can be easily and conveniently traced to the finished products are <u>direct materials.</u>
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learn more about direct materials:
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Answer:
A. Liquidity management is a balancing act, managers try to find liquidity levels that are neither too high not too low.
Explanation:
Maintaining proper liquidity is an important financial objective of management. Proper liquidity management demands that an entity should be able to meet his short term financial obligation and making sure that liquid assets of the entity are not idle. In order to achieve this, the best way to go is to maintain a level that is neither too high and not too low. Not too high means the entity is not holding too much cash or liquid assets than it currently need to meet its short term financial obligation.
For example, not keeping too much cash in current account but investing them in interest-earning investment assets.
Not too low means the cash or liquid assets held by an entity should not less than the amount needed to meet its short term financial obligation. For example, making sure that the entity has enough cash or readily convertible liquid assets that can be used to pay vendors, rent, interest and meet other short term financial obligation.
Option B is false because keeping too much does not help to maximize short term earnings which is a feature of proper liquidity management. Option C is wrong because there is no guideline to support that deferring coupon payment won`t attract payment and this does not connote proper liquidity management.
Option D is obviously false and does not describe proper liquidity management.
Answer:
The correct answer is 160,800 pounds.
Explanation:
According to the scenario, the computation of the given data are as follows:
Budget production in Jan = 39,000 units
Raw material per unit = 4 pounds
So, total raw material needed = 39,000 × 4 pounds = 156,000 pounds
Beginning inventory = 46,800 pounds
Ending inventory = (43,000 × 4 pounds ) × 30% = 51,600 pounds
So, Budgeted material needed = Total raw material + Ending inventory - Beginning inventory
= 156,000 + 51,600 - 46,800
= 160,800 pounds
