Answer:
See attachment for detailed answer.
Explanation:
Answer:
a. $175,000
b. $50,000
Explanation:
a. The computation of the warranty expense is shown below:
= Given percentage × units sold × repair average cost
= 2% × 70,000 units × $125 per unit
= $175,000
b. The computation of the warranty liability is shown below:\
= (Given percentage × Units sold × repair average cost) - (Repaired units × repair average cost)
= (2% × 70,000 units × $125 per unit) - (1,000 units × $125 per unit)
= (2% × $8,750,000) - ($125,000)
= $175,000 - $125,000
= $50,000
Answer:
The right approach will be "$ 1123.2".
Explanation:
The number of miles to be used will be:
=
=
Now,
The item deduction will be:
=
=
= ($)
Answer:
Option 2 should be selected
Explanation:
Using a rational approach which option most benefit and have a minimum cost. We will use the break-even level here to decide which option should be selected.
Option 1
Price per call = $30
Variable cost per call = $18
Contribution = Sales - Variable cost = $30 - $18 = $12
Fixed Cost = $15,000
Break-even point = Fixed cost / Contribution per call = $15,000 / $12 = 1,250 calls
Option 2
Price per call = $30
Variable cost per call = $18 + ( $30 x 10% ) = $18 + $3 = $21
Contribution = Sales - Variable cost = $30 - $21 = $9
Fixed Cost = $9,000
Break-even point = Fixed cost / Contribution per call = $9,000 / $9 = 1,000 calls
Difference = 1,250 calls - 1,000 calls = 250 calls
Option 2 is better option because it take 250 less calls to reach at break-even in the month. It should be selected.
Answer: a. Hostile takeovers are most likely to occur when a firm's stock is selling below its intrinsic value as a result of poor management.
Explanation:
A widely held belief in business is that hostile takeovers mostly occur because managers are performing abysmally.
To this end, the takeover takes place to discipline the poorly performing managers and restore the company to a better position.
It is worthy of note though that recently this view had been challenged by multiple authors but for purposes of this question, A is the correct answer.