Answer:
Option A Net income will be the same under both variable and absorption costing.
Explanation:
The condition here given is:
Production Units = Sales units
Now under such conditions their is no finished goods and all the fixed costs are absorbed in the units produced in the absorption costing which means all the fixed production costs are part of the cost of goods sold.
In variable costing system, the fixed costs are not absorbed in the units and deducted as period cost.
So this means no cost is left which is not deducted from the revenue and this gives us net income that is same amount when we either use variable costing or use absorption costing. But remember that this is only possible when the production units are equal to sales units.
Answer:
Elastic- D
Explanation:
When the demand of a product is said to be elastic, it means the price and other factors have a large effect on the quantity purchased by consumers. An increase in price will produce an effect where the quantity purchased decreases.
Elastic demand as opposed to inelastic demand indicates that the consumers can do without that product and can afford to do comparisons before shopping as there is no desperation for the product.
Answer:
Effect on income= $40,275 increase
Explanation:
Giving the following information:
The Clyde Corporation's variable expenses are 25% of sales.
Increase in fixed costs= $18,900
Increase on income= $78,900
T<u>o calculate the effect on income, we need to use the following formula:</u>
Effect on income= increase in contribution margin - increase in fixed costs
Effect on income= (78,900*0.75) - 18,900
Effect on income= $40,275 increase
Answer: Micheal will earn an interest of $600 in the first year based on nominal interest rates.
Since we need to compute the interest paid out at the end of year 1, we use the following formula in order to find the interest
where
SI = Simple interest
P = Principal or initial amount invested
N = Number of years
R = Nominal interest rate
Nominal interest rate refers to the rate quoted on the CD or the rate agreed upon. In this question, the nominal interest rate is 3%.
Substituting the values in the formula above we get,
Answer:
The company’s plant wide predetermined overhead rate for the year is $23.70
Explanation:
The computation of the predetermined overhead rate is shown below:
= (Fixed manufacturing overhead cost ÷ direct labor-hours) + variable manufacturing overhead per direct labor hour
= ($564,000 ÷ 26,000 hours) + $2 per direct labor hour
= $21.69 + $2 per direct labor hour
= $23.70
The other items which are mentioned in the question are not considered in the computation part. So, these parts should be ignored.
