Question 8

Money that has been or will be paid regardless of the decision whether to proceed with the project is:

bezimeni [28]

Answer:

Sunk costs.

Explanation:

Sunk costs refers to historical funds spent or incurred that cannot be recovered. Such costs are considered irrelevant during decision making which impacts on the business's future as they present no influence on present or future prospects.

Example

ABC investors decide to acquire land and develop residential houses at a location X. This decision is informed on the fact that the government had recently enacted a policy that led to an increase in demand for residential properties in that location. 6 months into construction of the residential houses, the government reviews and rescinds the policy. This leads to a sharp decline in property values in location X. ABC investors had already incurred 10 million dollars in the project. The 10 million dollars is considered sunk cost.

Sunk costs are the opposite of relevant costs because they can't be changed or recovered, as they've been spent or contracted in the past already. Hence, relevant cost are relevant for decision-making purposes but not sunk costs.

Hence, money that has been or will be paid regardless of the decision whether to proceed with the project is sunk costs.

4 0

3 years ago

After years of doing their own bookkeeping and preparing all of their tax documents in-house, the Watkins BookStop is having a f

ozzi

Answer:

Most bookkeepers will prepare three major financial statements for your business—the profit and loss statement, balance sheet, and cash flow statement. It's a good idea to have updated financial statements every month, and then again at year end

3 0

3 years ago

Titanic Corporation leased executive limousines under terms of $20,000 to be paid at the inception of the lease, and four equal

NeTakaya

Answer:

the interest expense for the first year is $10,238

Explanation:

The computation of the first year interest expense is shown below:

= Four equal annual payment × PVA factor of 4 years at 11% × interest rate implicit in the lease

= $30,000 ×3.10245 × 11%

= $10,238

Hence, the interest expense for the first year is $10,238

We simply applied the above formula so that the correct value could come

And, the same is to be considered

6 0

3 years ago

________ insurance is life insurance that is provided over a specified time period and does not build cash value.

zhannawk [14.2K]

The correct answer is Term

8 0

3 years ago

Read 2 more answers

Given the following data for Harder Company, compute cost of goods manufactured:

Slav-nsk [51]

Answer: Cost of goods manufactured = $520000

Explanation:

Given that,

Direct materials used = $120,000

Beginning work in process = $20,000

Direct labor = $200,000

Ending work in process = $10,000

Manufacturing overhead = $180,000

Beginning finished goods = $25,000

Operating expenses = $175,000

Ending finished goods = $15,000

∴ Cost of goods manufactured = Direct materials used + Beginning work in process + Direct labor - Ending work in process + Manufacturing overhead + Beginning finished goods - Ending finished goods

= $120,000 + $20,000 + $200,000 - $10,000 + $180,000 + $25,000 - $15,000

= $520000

7 0

3 years ago