Answer:
When the new processes are developed for manufacturing it results in interest rate fluctuations. However, operational costs would become uncertain which would further affect the total production costs. Thus the value of an investment would be impacted. Automobile demand from the customers will also get affected. thus, fall in interest rate will have a significant and positive affect on the sale of automobiles as well as revenue.
Answer:
Advanced Automotive
Allocation of Historical Cost
Land = $64,000
Building = $32,000
Equipment = $224,000
Journal Entries
Dr - Property, Plant and Equipment - $320,000
Cr - Account Payable - $320,000
Explanation:
Workings
Land = $70,000 × ($320,000/$350,000) = $64,000
Building = $35,000 × ($320,000/$350,000) = $32,000
Equipment = $245,000 × ($320,000/$350,000) = $225,000
Answer:
(a)
Mathematical Equation for break-even
F = QP - QV
Where
F = fixed cost
Q = Break-even quantity
P = Selling price
V = Variable cost
F = Q ( P - V )
Q = F / ( P - V )
Q = $327,030 / ( $630 - $300 )
Q = $327,030 / $330
Q = 991 units
(b)
Contribution Margin = Price per unit - Variable cost per unit
Contribution Margin = $630 - $300 = $330
Break-even Point in Units = Fixed Cost / Contribution margin per unit
Break-even Point in Units = $327,030 / $330 = 991 units
Explanation:
Mathematical equation use the the break-even equation which represent the behavior of each element towards the break-even point.
Contribution per unit method use the contribution of each unit to calculate the break-even point.
Answer:
Right
Explanation:
Right if you expect tax rates to go up or because right now you are starting your career and your tax bracket would be lower now than what it will be later on. When you are older and in retirement, you would want to save your money and not have to worry about any taxes.
The options are:
A switching production to products that absorb the least amounts of fixed manufacturing costs
B undervaluing ending inventory by not recording certain costs that have been incurred
C delaying items that absorb the greatest amount of fixed manufacturing costs
D switching production to products that absorb the most amounts of fixed manufacturing costs
E deferring maintenance to accelerate production
Answer:
deferring maintenance to accelerate production
Explanation:
In the production process if we want to increase operating income we need to reduce cost.
Producing for inventory to reduce cost involves production process that minimises what a business spends in order to increase profit.
A way this can be done is to defer or delay items increase cost of production.
For example if we defer maintenance to increase production, it will result in higher operating income.
