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3 years ago

The following data for a production department relate to two accounting periods:

Business

1 answer:

vagabundo [1.1K]3 years ago

5 0

Answer:

Fixed costs= $187,000

Explanation:

Giving the following information:

Activity(machine-hours): 17,000 18,500

Department costs: $246,500 $251,750

<u>To calculate the fixed and variable cost, we need to use the high-low method:</u>

Variable cost per unit= (Highest activity cost - Lowest activity cost)/ (Highest activity units - Lowest activity units)

Variable cost per unit= (251,750 - 246,500) / (18,500 - 17,000)

Variable cost per unit= $3.5

Fixed costs= Highest activity cost - (Variable cost per unit * HAU)

Fixed costs= 251,750 - (3.5*18,500)

Fixed costs= $187,000

Fixed costs= LAC - (Variable cost per unit* LAU)

Fixed costs= 246,500 - (3.5*17,000)

Fixed costs= $187,000

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Sheen Awnings reported net income of $90 million. Included in that number were depreciation expense of $3 million and a loss on

Serggg [28]

Answer:

The Sheen’s cash flows from operating activities is $95 million

Explanation:

Cash flows from operating activities :

The cash flow from operating activities includes all those activities which are of short term period. Like changes in working capital or we can say increase in currents assets or decrease in current assets or increase/decrease in current liabilities.

The increase in current liabilities increase the cash balance, hence it is added and decrease in current liabilities decrease the cash balance. But in the case of current asset, it is opposite.

The depreciation expense and loss on sale of equipment is added. So, we take them in the computation part.

The cash flow from operating activities is equals to

= Net income + depreciation expenses + loss on sale of equipment - increase in accounts receivable + increase in accounts payable - increase in inventory

= $90 + $3 + $2 - $1 + $4 - $3

= $95 million

Hence, the Sheen’s cash flows from operating activities is $95 million

8 0

3 years ago

When a factory is operating in the short run? a. average fixed cost rises as output increases. b. it cannot alter variable costs

Vadim26 [7]

No Variable costs occurs in the short run.

The average fixed cost of the production remains same till the output is produced and as the output increases or becomes to rise slowly.

It cannot alter the variable costs but can manage the total cost and variable cost by managing the marginal cost rest remaining the same.

The total expenses consist of the variable and marginal cost and fixed costs which are both short term and long term investments.

It cannot alter any other cost except these cost because they are attached with cost of production.

To learn more about operating cost here,

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8 0

2 years ago

Boss asks you to explain the difference between the Cost of Capital and DiscountRate in a multi-year Net Present Value analysis

babymother [125]

Answer:

Cost of capital is the overall rate of return expected by investors while the discount rate is the minimum rate of return used for appraising a project in order to obtain the net present value.

Explanation:

Cost of capital is calculated as cost of equity multiplied by the proportion of equity in the capital structure plus cost of debt multiplied by the proportion of debt in the capital structure plus cost of preferred stock multiplied by the proportion of preferred stock in the capital structure.

Discount rate is the rate used for determining the attractiveness of a project. This rate is used for determining the net present value of a project.

6 0

3 years ago

If a check correctly written and paid by the bank for $272 is incorrectly recorded in the company's books for $227, how should t

djverab [1.8K]

Answer:

Add $45 to the book balance.

Explanation:

This is a transposition error which is an example of error of original entry. A transposition error occurs when the figures are posted in the wrong order, while an error original entry occurs when a wrong amount is entered into the right account. This kind of error usually causes discrepancy between the bank balance and the book balance.

To correct this error in the question, we first find the difference between the right amount and the wrong amount as follows:

Difference = Right amount – Wrong amount = $272 - $227 = $45

Therefore, the difference of $45 will be added to the book balance to bring it into an agreement with the bank treatment as follows:

Bank correct treatment = $272

New book treatment = Wrong amount + Difference = $227 + $45 = $272

It can now be seen that both posting are now in agreement after the correction.

4 0

3 years ago

[The following information applies to the questions displayed below.]

Dvinal [7]

Answer:

Allied Merchandisers

Journal Entries

Date General Journal Debit Credit

03-May Merchandise Inventory $20,000

To Cash $20,000

05-May Accounts Receivable $21,000

To Sales $21,000

05-May Cost of goods sold $15,000

To Merchandise Inventory $15,000

07-May Sales Returns and allowances $1,750

To Accounts Receivable $1,750

07-May Merchandise Inventory $1,250

To Cost of goods sold $1,250

08-May Sales Returns and allowances $300

To Accounts Receivable $300

15-May Cash $18,571

Sales Discounts $379

($18950*2%)

To Accounts receivable $18,950

($21000-$1750-$300)

8 0

4 years ago