Answer:
Under variable costing, fixed manufacturing overhead is expensed as period expenses.
Explanation:
Option <em>A</em> is wrong because under absorption costing, fixed manufacturing overhead is expensed as product expenses.
Option <em>B</em> is incorrect because Under variable costing, direct materials and direct labor are expensed as product expenses.
Option <em>C</em> is false because Fixed manufacturing overhead costs are treated as product cost under absorption costing and period cost under variable costing.
Therefore, option E is correct as fixed manufacturing overhead is expensed as period expenses under variable costing.
Answer:
$143,700
Explanation:
Current assets in Sheridan Company's trial balance are;
Accounts receivable (net) = $37,000
Trading securities = $11,500
Cash = $33,000
Inventory = $58,500
Prepaid expenses = $3,700
Total current assets = $37,000 + $11,500 + $33,000 + $58,500 + $3,700
= $143,700
The right answer is not given as an option.
Answer:
It would decrease by $7,504.
Explanation:
The current ratio determines liquidity of a company. The current ratio is calculated by dividing total current assets from total current liabilities. The change in inventory will affect the current ratio of the company. In the consolidated financial statements the value of inventory is decreased due to exchange rate fluctuations. The change in value of inventory will affect the amount reported in the balance sheet of the parent and will ultimately result in reduction of current ratio.
Answer:
a. The answer is:762 bottlé.
b. The answer is: 487 bottles.
Explanation:
a. The economic order quantity is calculated as: 
= 
= 762 units because: D = annual demand = Weekly demand x week opening per year = 134 x 52 = 6968; S = Cost per order = 25; H = Holding cost per unit = 15% x purchase price = 15% x 4 = 0.6
b. Inventory level to place order:
With the inventory system providing a 95 percent service probability, z level is 1.64 (using the NORM.S.INV function in excel).
So Inventory level to place order = 134 * 3 + 1.64 * 30 * 3^0.5= 487 bottles.
