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3 years ago

Preston Company has three divisions. The company should consider a cost to be a direct cost of a division if:

Business

1 answer:

stiks02 [169]3 years ago

7 0

Answer:

b. it can be traced to a division in a cost effective manner.

Explanation:

Direct costs are those costs which can be directly attributable to a product, activity or a department. For example, direct material or direct labor are direct costs.

These refer to those costs which are incurred specifically for a product, service or incurred for a particular department. Usually such costs are variable i.e they usually vary with the level of production.

Direct costs can be specifically traced so they need not be allocated to any product or a department.

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Issues $10,000,000, 7.8%, 20-year bonds to yield 8% on January 1, 2018. Interest is paid on June 30 and December 31. The proceed

igomit [66]

Answer:

B. $784,249

Explanation:

The effective interest amortization is an accounting practice used for discounting a bond. This method isused for bonds sold at a discount; the amount of the bond discount is amortised as interest expense over the bond's life

Interest expenses for 6 months from Jan 1st to Jun 30th is $392,083 = $9,802,072* 8%/2

Amortization of Discount is $2,083= $9,802,072* 8%/2 - 10,000,000*7.8%,/2

Carry Amount of Bond on June 30 $9,804,155= bond proceed of $9,802,072 + Amortization of Discount is $2,083

Interest expenses for 6 months from Jul 1st to Dec 31st is $392,166 = Carry amount of Bond $9,804,155 x effective rate 8%/2

Total interest expense will be recognized in 2018 is $784,249 = $392,083 + $392,166

8 0

3 years ago

Like many college students, Bernadette applied for and got a credit card that has an annual percentage rate (APR) of 15%. The fi

Dovator [93]

Answer:

It would take Bernadette approximately 33 months to completely pay off the stereo system.

Explanation:

Since it is assumed that Bernadette makes her payment when she sees her statement at the end of each month, we use the formula for calculating the present value (PV) of an ordinary annuity to determine the number of months as follows:

PV = M * ((1 - (1 / (1 + r))^n) / r) …………………………………. (1)

Where;

PV = Present value of the new stereo system = $400

M = minimum monthly payment = $15

r = monthly interest rate = 15% / 12 = 0.15 / 12 = 0.0125

n = number of months = n

Substitute the values into equation (1) and solve for n as follows:

400 = 15 * ((1 - (1 / (1 + 0.0125))^n) / 0.0125)

400 / 15 = (1 - (1 / 1.0125)^n) / 0.0125

26.6666666666667 * 0.0125 = 1 - (1 / 1.0125)^n

0.333333333333334 = 1 - 0.987654320987654^n

0.987654320987654^n = 1 - 0.333333333333334

0.987654320987654^n = 0.666666666666666

Loglinearizing both sides, we have:

n * log0.987654320987654 = log0.666666666666666

n * (-0.00539503188670629) = -0.176091259055682

n = -0.176091259055682 / -0.00539503188670629

n = 32.64, or 33 approximately.

Therefore, it would take Bernadette approximately 33 months to completely pay off the stereo system.

6 0

4 years ago

New sources of silicon are located in wyoming. the determinant causing the shift in this scenario is

GuDViN [60]

The determinant that causing the shift is resource cost or availability.
New sources means that the companies in relevant sectors could obtain more raw silicon materials at the cheaper price.
This will lead to lower price of products offered in the market and resuled in higher amount demand of products that use the material.

8 0

4 years ago

Describe the relationship between supply and demand in your own words

Tanzania [10]

Answer:

Supply: In economic terms, supply is the amount of resources or products that are provided by the company or an organization to the public or the targeted marketed. For example a toy making company would be providing toys to people with children, who are in need of toys.

Demand: It is an economic concept that states the need of a product or service. People or organizations have needs which are fulfilled by products and services. For example, the need for toys of people with children is known to be their demand which is then fulfilled by companies.

5 0

3 years ago

Phillips Co. currently pays no dividend. The company is anticipating dividends of $.02, $.05, $.10, $.20, and $.30 over the next

Andre45 [30]

Answer:

Explanation:

The value of the stock today is the present value of all the expected cash-flows that are likely to accrue to the investor who buys the share today. If an investor buys the share today, he is likely to receive D1, D2, D3, D4, D5 and in addition, using the going concern concept, the investor is also expected to receive all the dividends from D6 till infinity. The present value of the dividends D5 till infinity is equal to P5.

Imagine an investor who wants to buy the share at the end of year 5. He would value the share at that point by calculating the present value of all his expected cashflows, which would be the present value of D6, D7, D8 etc till infinity. Given a constant growth grate, the Gordon Growth Constant model can be used to find P5 as follows:

$P5=\frac{D6}{ke-g}$

where D6 = D5(1+g)

therefore

$P5=\frac{0.3(1+0.035)}{ke-0.035}$

8 0

3 years ago

Read 2 more answers