Answer:
b. $3,000
Explanation:
According to the above information, the following data are given
Credit sales = $100,000
Uncollectible percentage = 3%
So, after the adjustment by using allowance method, Bad debt expense can be calculated as;
Bad debt expense = Credit sales × Uncollectible percentage
= $100,000 × 3%
= $3,000
Answer:
a) Taylor Industries can successfully cut back its labor cost in inventory stockrooms by counting only high-value items. These items are determined by reference to their Annual Usage values. The items' annual usage values should be used as the activity cost pool for accumulating and allocating labor cost in inventory stockrooms. Taylor Industries can establish a benchmark or cutoff point so that only the items meeting this benchmark are counted. For example, the items with annual usage value above $5,000 should be included in the items to be counted. This strategy will reduce the number of items to be counted and therefore the labor cost.
b) Since item 15 is critical to Taylor Industries' continued operations, it should be classified as a direct materials cost and not an overhead cost.
Explanation:
a) Data and Calculations:
a random sample of 20 of Taylor's items:
ITEM NUMBER ANNUAL USAGE ITEM NUMBER ANNUAL USAGE
1 $ 1,500 11 $ 13,000
2 12,000 12 600
3 2,200 13 42,000
4 50,000 14 9,900
5 9,600 15 1,200
6 750 16 10,200
7 2,000 17 4,000
8 11,000 18 61,000
9 800 19 3,500
10 15,000 20 2,900
Average annual usage value = $12,657.50
Answer:
$1,320.19
Explanation:
Loan amount = $225,000
Rate = 5.80%
Years = 30
PMT = ?
Initial payment = PMT(Rate/12, Years*12, -225,000)
Initial payment = PMT(5.80%/12, 360, -225,000)
Initial payment = 1320.185230439806
Initial payment = $1,320.19
Therefore, the initial payment on the loan is $1,320.19
