I would say the shareholders could disapprove of the performance of their company if it was to consistently to lose money over say several quarters with no signs of improvement or no encouragement by management that this was a temporary situation,
Answer:
Cost of Make = $2,240
Explanation:
The computation of Saving in Cost by Make or buy is shown below:-
Make Buy
Material $2,800
($0.20 × 14,000 Buns)
Direct Labor $1,400
($0.10 × 14,000 Buns)
Variable Factory Overhead $560
($0.04 × 14,000 Buns)
Purchase Cost of Buns $7,000
(14,000 × $ 0.50)
Total Cost $4,760 $7,000
Therefore the Saving in Cost by Make = $7,000 - $4,760
= $2,240
in accrual basis accounting, revenue is recorded when the seller's product is shipped or service is provided.
Revenue is the money made from regular business operations and is calculated by multiplying the average sales price by the quantity of units sold. In order to calculate net income, costs must be deducted from the top line (or gross income) figure. On the income statement, revenue is also known as sales.
Even though the cash for the transaction has not yet been exchanged, accruals are earnings or expenses that have an influence on a company's net income on the income statement. Due to the non-cash assets and liabilities they involve, accruals also have an impact on the balance sheet.
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