1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
insens350 [35]
3 years ago
10

Under variable costing, if a manager's bonus is tied to operating income, then increasing inventory levels compared to last year

would result in: being unable to determine the manager's bonus using only the above information not affecting the manager's bonus increasing the manager's bonus decreasing the manager's bonus
Business
1 answer:
inysia [295]3 years ago
7 0

Answer: not affecting the manager's bonus

Explanation:

Under Variable costing, fixed manufacturing overhead is not charged on inventories produced or not sold for the year which means that regardless of inventory level, the relevant inventory here when it comes to calculating operating profit is the one that was sold.

The manager's bonus will therefore not change as a result of higher inventory levels. Were this absorption costing where fixed overhead was charged to inventory that was not sold, the manager's bonus would increase because the higher inventory level would absorb more of the cost.

You might be interested in
Goodmark Company produces two types of birthday cards: scented and regular. Expected product data for the coming year are given
pochemuha

Answer:

Setups: $ 144,000

Moving materials: $72000

Machining: $22,200

Inspection:  $17,777.78

Explanation:

Goodmark Company

                Scented Cards        Regular Cards             Total

Units produced 20,000             200,000 -

Prime costs    $160,000        $1,500,000               $1,660,000

Direct labor hours 20,000       160,000                     180,000

Number of setups 60                   40                                 100

Machine hours        10,000         80,000                      90,000

Inspection hours      2,000         16,000                         18,000

Number of moves      180             120                              300

<em>First we find the rate by dividing the overhead costs with the corresponding cost driver as follows.</em>

Overhead costs:                               Rate

Setting up equipment $240,000 = Setting up equipment / Number of setups=$240,000/100=2400

Moving materials 120,000   =   Moving materials/Number of moves

                                               120,000/300=400

Machine 200,000         =   Machining/Machine hours    

                                        =  200,000/ 90,000=2.222

Inspecting   160,000  =  Inspection/Inspection hours

                                        = 160,000/18000= 8.89

<em>Now we find the overhead applied to the scented cards by multiplying the rate to the  corresponding overhead activity of the scented cards.</em>

Activity                        Rate                Scented Cards

Setups:                        2400                   2400*60=$ 144,000

Moving materials:       400                    400*180= $72000

Machining:                    2.22                  2.22*10,000=$22,200

Inspection:                   8.89                  8.89*2000= $17,777.78

8 0
3 years ago
If demand for personal computers increases as a result of an increase in income, a. personal computers must be a normal good b.
dexar [7]

Answer: Personal computers must be a normal good.

Explanation:

Normal good is a type of commodity available in a market, in which the commodity's demand increases as income of the buyers increase. The normal goods posses a positive income elasticity of demand(where demand is directly proportional to income).

3 0
3 years ago
Stacey and Andrew each own one-half of the stock in Parakeet Corporation, a calendar year taxpayer. Cash distributions from Para
Fittoniya [83]

Answer:

Option 3

Explanation:

Earnings & profits (E&P) is the measure of a corporation’s economic ability to pay dividends to its shareholders. An up-to-date E&P calculation is important for many corporate transactions, including determining whether a distribution to shareholders is a taxable dividend.

The E&P allocated to Andrew's distribution

= 160,000 * 150,000/(350,000+150,000)

= 160,000 * 150,000/500,000

= 48,000

Option C

8 0
3 years ago
What is another term for liability?<br> A. asset<br> B. notes<br> C. debt<br> D. accounts
Fiesta28 [93]

Answer:

Another term for liability is debt, because both of these terms are accountable for money charges and assist needed :3

Explanation:

:3

6 0
3 years ago
You are the manager of a project that has an operating leverage rating of 2.8 and a required return of 14 percent. Due to the cu
slava [35]

Answer:

The change should you expect in operating cash flows next year would be 19.60%

Explanation:

In order to calculate the change should you expect in operating cash flows next year given your sales forecast we would have to make the following calculation:

change should you expect in operating cash flows=operating leverage rating*percentage of decrease sales next year

change should you expect in operating cash flows=2.8*0.07

change should you expect in operating cash flows=19.60%

The change should you expect in operating cash flows next year would be 19.60%

8 0
3 years ago
Other questions:
  • Ucc article 2 applies to sales transactions between all buyers and sellers.
    9·1 answer
  • Please Help! My teacher is very vague on his website that I normally use for the answers on his worksheets.
    15·1 answer
  • Scoring at least 80 percent on the next anatomy test is a specific goal.<br> True or false
    7·2 answers
  • Microsoft hires marketing and sales specialists to decide what prices it should set for its products, whereas a wealthy corn far
    9·1 answer
  • The three conditions that characterize difficult managerial decisions concerning resources, capabilities, and core competencies
    10·1 answer
  • Sharon is opening a new pizza restaurant that will use a combination of workers and ovens to produce pizzas. Sharon knows from e
    9·1 answer
  • A Solutions Architect has a multi-layer application running in Amazon VPC. The application has an ELB Classic Load Balancer as t
    10·1 answer
  • Three examples of when interest rates are bad for you​
    13·1 answer
  • When an interest-bearing note comes due and is uncollectible, the journal entry includes debiting
    6·1 answer
  • Prior to June 30, a company has never had any treasury stock transactions. A company repurchased 100 shares of its $1 par common
    14·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!