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Aleks [24]
3 years ago
11

Boston Consulting Group (BCG) is a management consulting, technology services and outsourcing organization. Which of the followi

ng actions should managers take when there is evidence that a fixed-rate contract is over budget and will generate a loss for the firm?
a. Use the percentage of completion method and pro rate the loss over the entire term of the engagement
b. Restate the financial statements and recognize the loss in the earliest period of the engagement
c. Use the percentage of completion method to recognize the loss over the remaining term of the engagement.
d. Recognize the loss in the current period rather than over the remaining term of the engagement
e. None of the above
Business
1 answer:
Ilya [14]3 years ago
7 0

Answer: D. Recognize the loss in the current period rather than over the remaining term of the engagement

Explanation:

A fixed rate contract is the contract whereby the payment amount isn't dependent on the resources or the time that were used.

Since there's evidence that a fixed-rate contract is over budget and will generate a loss for the firm, the manager should recognize the loss in the current period rather than over the remaining term of the engagement.

Therefore, the correct option is D.

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Loop 1604 Inc. has prepared a static budget at the beginning of the month. At the end of the month the following information is
Charra [1.4K]

Answer:

Flexible budget variance for Sales Revenue = $3,960 Favorable

Explanation:

Provided budget is static budget, firstly for calculating flexible budget variance for Sales Revenue.

For this flexible budget is made of same level of quantity as of actual level.

therefore Flexible budget sales = 990 units @ $70 per unit price will be same as of static budget.

Therefore Variance = Standard Flexible Budgeted Sales - Actual Sales

Standard Flexible Budgeted Sales = 990 \times $70 = $69,300

Actual Sales Revenue = 990 \times $74 = $73,260

Since actual revenue is more than budgeted sales this is favorable.

Flexible Budget Variance for Sales Revenue = $69,300 - $73,260 = $3,960

Since actual revenue is more than budgeted revenue therefore this is a favorable variance.

Flexible budget variance for Sales Revenue = $3,960 Favorable

3 0
3 years ago
During December, Far West Services makes a $2,000 credit sale. The state sales tax rate is 6% and the local sales tax rate is 2.
Leno4ka [110]

Answer:

Total sales tax payable:170, sales :2000

Explanation:

Sale price x sales tax rate = sales tax payable

2000 x .085 (6%+2.5%) = 170

it doesn’t say so I’m assuming that the 2,000 credit sale does NOT include the sales tax due.

3 0
3 years ago
For an oil and gas limited partnership (LP), allowances in the form of deductions are allowed by the IRS to be taken to compensa
Triss [41]

Answer:

The allowance can be taken based on:

a reduction (production) of the oil and gas reserves.

Explanation:

A limited partnership's allowance for depletion is a special form of depreciation used to account for the gradual reduction in the value of natural resources based on their usage or consumption.  There are two methods for recognizing depletion of natural resources.  They are the cost depletion method, which is based on usage, and the percentage depletion method, which is a percentage of gross earnings.  Then, depletion is different from depreciation, in that depreciation is for tangible assets, while depletion is for natural assets.

3 0
2 years ago
The direct write off is used when:
Thepotemich [5.8K]

Answer:

The correct answer is letter "A": Uncollectible accounts are not anticipated or immaterial.

Explanation:

Direct write-off is a method used to record debts from credit sales. An allowance account is not used with this method but an account receivable directly written-off for the outstanding amount once it is determined to be uncollectible. This method is used for tax-reporting purposes.

3 0
3 years ago
DEF Ltd is a global leader in the manufacture, integration and support of networking and telecommunications systems. The company
Serjik [45]

Some of the challenges of this company include lack of control over financial reporting in all branches, and inaccurate data to make decisions for next years.

DEF Ltd's main problem is the inaccuracy regarding the recognition of revenue and other inconsistencies in financial reporting. This problem includes:

  • Inaccuracies related to revenue and deferred revenue.
  • Lack of documentation of some transactions.

Moreover, these problems are intended to be solved through a review process and training seminars. These two ideas are useful for the problem; however, the company might face some challenges and problems such as:

  • Lack of control in all branches: DEF Ltd seems to be a big company with multiple branches around the world. This makes it difficult for the company to control all financial records even if employees are educated about the process through seminars.
  • Inaccurate data for next periods: Considering there are lots of inconsistencies and some of the reports are incomplete, it is likely even after the review process the company does not have complete information about the previous transactions or revenues. This can affect future projections and decisions.

Note: This question is incomplete; here is the missing part:

Using the disclosures above as a starting point, brainstorm about the challenges regarding internal controls and that a company may face in doing business internationally?

Learn more in: brainly.com/question/10916805

5 0
2 years ago
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