Answer:
Explanation:
Multi step income statement is a more detailed way of reporting profit and loss compared to the single step as it entails the use of series of equation to arrive at the net income.
Workings
Income Statement for Save - the - Earth for the year Ended Dec. 31
Sales 28,000
Sales discount 790
sales return 290 (1080)
and allowance
Net sales 26,920
Cost of goods 9,800
Gross profit 17,120
Expenses
Selling expenses
Staff Salary 2900
Rent 1900
Advertising 580
Total Selling expenses 5380
General admin expenses
Office salary 2400
Insurance expenses 1400
Office supplies 580
Total general admin expenses 4380
Total expenses 9,760
Net income 7,360
Answer:
D. are incurred even if nothing is produced.
Explanation:
There are primarily two types of costs, i.e. the variable cost and the fixed cost. The variable cost is the cost that varies when the level of production changes, while the fixed cost is the cost that remains unchanged whether the level of production changes or not
So, by the above explanation, we can conclude that the fixed cost can be incurred if there is nothing to be produced.
Answer:
No
Explanation:
The estimation of the net present value is shown below:
= Present value of all yearly cash inflows after applying discount factor - initial investment
where,
The Initial investment is $180,000
All yearly cash flows would be
= Annual cost savings × PVIFA for 8 years at 12%
= $35,000 × 4.9676
= $173,886
Refer to the PVIFA table
Now set these values to the formula above
So, the value would equal to
= $173,886 - $180,000
= -$6,134
Since the net present value is negative, so the project should not be accepted
Answer:
(C) Joss should charge Iris $500 and Daphne $800, that way economic surplus is maximized.
Explanation:
Assuming information asymmetries in the market, and Iris and Daphne are incapable of compare their willingness to pay against the average price of the market for this type of service, C is true since Joss maximize the economic surplus by increasing his productivity using the time better than his opportunity cost.
