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4 years ago

Evaluating and rewarding managers based on absorption basis income can lead to overproduction. true or false

Business

1 answer:

nikklg [1K]4 years ago

5 0

Answer:

True

Explanation:

The absorption basis of income, profits are always high when the production is greater than income because more fixed costs will have been deferred in closing inventory.

So, managers will focus more on increasing production which create huge balances of closing stocks and consequently results in large profits.

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Generic Motors is a manufacturing firm. Its beginning inventory of materials was $1,000, purchases of materials $20,000, ending

Hoochie [10]

Answer:

Instructions are listed below.

Explanation:

Giving the following information:

Direct material:

beginning inventory= $1,000

purchases= $20,000

ending inventory= $1,500.

beginning inventory of work-in-process (WIP) was $5,000

ending inventory of WIP was $6,700.

Its cost of direct labor was $12,000, manufacturing overhead $11,000.

Its beginning inventory of finished goods was $3,000, the ending inventory of finished goods was $1,300.

A) Direct material used= beginning inventory + purchases - ending inventory

DM used= 1,000 + 20,000 - 1,500= 19,500

B) cost of goods manufactured= beginning WIP + direct materials + direct labor + allocated manufacturing overhead - Ending WIP

cost of goods manufactured= 5,000 + 19,500 + 12,000 + 11,000 - 6,700= $40,800

C) COGS= beginning finished inventory + cost of goods manufactured - ending finished inventory

COGS= 3,000 + 40,800 - 1,300= $42,500

3 0

3 years ago

In designing a tax system, policymakers have two objectives that are often conflicting. They are a. maximizing revenue and minim

mariarad [96]

Answer:

C. Efficiency and equity.

Explanation:

In designing a tax system, their are many factors that can easily stand out to be hindrances seen to be present; here it could be the policymakers, law enforcement agencies, the financial institutes etc. But in the case above, the main focus is seen to be on the policymakers.

Here, there are to main objectives that are seen and observed according to research to be the two main factors that are conflicting between policymakers which are their efficiency and also their equity. Therefore, to easily set the public and private investment, government taps tax revenues.

7 0

3 years ago

The salesperson's objective is to begin converting a prospect into a customer by creating a desire for the product or service du

Ne4ueva [31]

Answer: Presentation.

Explanation:

The presentation stage is the stage after the approach stage of personal sales, where the marketer introduces a product to a potential buyer and tries to sell the product by listing out the qualities of that product to the buyer.

5 0

3 years ago

Jole Co. lent $10,000 to a major supplier in exchange for a noninterest-bearing note due in three years and a contract to purcha

Lisa [10]

Answer:

Discount on note receivable and deferred charge.

Explanation:

The present value of the notes receivable has to be recorded by Jole Co. The reason this should be recorded as discount on note receivable is that the $10,000 will not be paid immediately but will be due for payment 3 years from the date the note was issued.

A deferred charge is an expense paid in advance and it is recorded and carried forward yearly in the balance sheet as an asset until when it is totally consumed or used. The 10% discount received by Jole Co. in the exchange agreement is a payment in advance and it will be recorded by Jole Co. as deferred charge. The reason is that it is a discount on the future purchase from the supplier over the next three years of a given amount of merchandise from the market price list.

I wish you the best.

6 0

3 years ago

Nine years ago the Templeton Company issued 26-year bonds with an 11% annual coupon rate at their $1,000 par value. The bonds ha

sergij07 [2.7K]

Answer:

11.62%

Explanation:

Note: see the attached excel file for how the realized rate of return is estimated.

Face value = $1,000

Years completed = 9

Coupon rate = 11%

Coupon amount ($) = 110

Call premium = 9%

Call price = 1,090

Realized rate of return = 11.62%

Download xlsx

6 0

4 years ago