Answer:
a. Accept the order
b. Increase in short-term profit of $50,000
Explanation:
<em>Note : Blowing Sand has "enough excess capacity" this means that fixed cost will be the same in the range or they will be ocurred whether or not the special order is accepted.</em>
Therefore fixed costs are Irrelevant for this decision.
<u>Incremental Costs and Revenues - accept the special order</u>
Sales ( 10,000 units × $22 each) $220,000
<em>Less</em> Variable Costs ( 10,000 units × $17each) ($170,000)
Net Income $50,000
The special order will result in an increase in short term profit of $50,000. Therefore, Blowing Sand Company should accept the order.
Answer:
C. Debt to Income Ratio
Explanation:
The debt to income ratio (DTI)provides a picture of the level of debts of a borrower. The DTI is usually expressed as a percentage of gross income. A high debt to income ratio indicates a person spends a high percentage of income on paying debts.
Lenders use the debt to income ratio to assess a borrower's ability to repay debts. Individuals with low DTI are preferred to those with a high one.
Answer:
(D) decrease revenues and decrease assets
Explanation:
Since the revenue is unearned, its entry in the books needs to be reversed.
When a revenue was recorded in the books, the like journal entry would have been.
Debit Cash/Bank/Receivables Account (thus increasing asset)
Credit Revenue Account (thus increasing revenue)
There, reversing the entry will involve decreasing revenue and decreasing asset.
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