Answer: It is less severe than a material weakness
Explanation:
A SIGNIFICANT DEFICIENCY is described as a deficiency or an amalgamation of deficiencies that are NOT as severe as a MATERIAL WEAKNESS ( which is quite serious and must be reported to the Audit Committee and be reflected in the financial statements) but still important enough for those people in charge of the company's financial records to take notice.
Answer:
10.12 %
Explanation:
Weighted Average Cost of Capital (WACC) is the cost of permanent sources of capital pooled together. It shows the risk of the business and is used to evaluate projects.
WACC = Cost of equity x Weight of Equity + Cost of Debt x Weight of Debt + Cost of Preference Stock x Weight of Preference Stock
<u>Remember to use the After tax cost of debt :</u>
After tax cost of debt = Interest x (1 - tax rate)
= 10% x ( 1 - 0.40)
= 6.00 %
<u>Cost of equity :</u>
Cost of equity = Return from Risk free security + Beta x Risk Premium
= 4.00 % + 1.8 x 8.00%
= 18.40 %
<u>Cost of Preference Stock :</u>
Cost of Preference Stock = Dividend / Market return x 100
= $2.50 / $ 25 x 100
= 10%
therefore,
WACC = 18.40 % x 30 % + 6.00 % x 60 % + 10.00% x 10%
= 10.12 %
thus,
Ford's weighted average cost of capital is 10.12 %
Answer:
A. reduces record keeping.
Explanation:
A periodic system of inventory can be defined as a method of financial accounting, that typically involves updating informations about an inventory on a periodic basis (at specific intervals) as the sales or purchases are being made by the customers, through the use of either an enterprise management software applications or a digitized point-of-sale equipment.
Hence, a periodic system of inventory reduces record keeping because there's no continuous records in real-time of the amount of inventory sold or purchased by the customers.
Answer:
Product Costs
Product costs are those that are incurred due to the production process. This will therefore include costs related to Direct labor, direct materials and factory overheads.
They include:
- Production Materials
- Factory rent
- Factory machine maintenance
- Factory utilities
- Production labor
- Factory maintenance workers
- Shipping costs for materials
- Labor supervision
Their total is therefore:
= 9 + 1 + 0.6 + 0.4 + 2.75 + 0.7 + 0.50 + 0.30
= $15.25
Period Costs
Period costs are those costs that aren't related to production but are incurred in a given period:
They include:
- Administrative costs
- Duties on shipments out
Total is:
= 0.75 + 3.00
= $3.75
Answer:
c. Materiality
Explanation:
The relevance of information is affected by its materiality. Information is material if omitting it or misstating it could influence decisions that users make on the basis of financial information about a specific reporting entity.
An error which is too trivial to affect a user’s understanding of financial statement is referred to as immaterial. There is no absolute measure of materiality that can be applied to all businesses. In other words there is no rule that says any item greater than 5% of profit must be material. Whether an item is material or not depends on its magnitude or its nature or both in the context of the specific circumstances of the business.
So based on the above discussion, the answer is c. Materiality
