Answer:
The correct answer is letter "A": Accrual-basis revenues exceed cash collections from customers.
Explanation:
Revenue collected in advance are profits collected usually at the beginning of a contractual agreement that implies obligations from the firm for a certain time. For instance, insurance companies charging a one-time payment for an annual policy fall into this category.
The accrual basis of accounting states that profits are reported on the income statement as they are earned. In that case, if the revenue collected in advance decreases, the accrual-basis revenues will be higher than the cash collections from customers under the advanced payment method.
The value added is 0, because if we added the value they spend on sugar and the other supplies and etc. it will be $1,000
Answer:
producing 200 units of Model A would be the best of the 25,000 lbs of steel and 4,000 zinc available
With a profit of 200 units x $90 each = 18,000 dollars
Explanation:
Model A contribution:
90 / 125 = 0.72
90 / 20 = 4.5
Model B contribution:
70/ 100 = 0.7
70/ 30 = 2.33
As model B generates lower contribution for both scarse resources is not convinient to produced altogether.
It should produce Model A as much as it can and only fill with Model B if needed
25,000 lbs of steel / 125 per Model A = 200 units of A
200 units of A x 20 lbs of zinc each = 4,000 lbs of zinc
producing 200 units of Model A would be the best of the 25,000 lbs of steel and 4,000 zinc available
