Answer:
If the company produces the units, it will save $4.
Explanation:
First, we need to calculate the relevant cost of making the units in-house. <u>We will consider only the incremental overhead cost:</u>
Make in-house:
Direct material= 8
Direct labor= 24
Avoidable Overhead= 40*0.6= 24
Total cost= $56
Buying:
Total cost= $60
If the company produces the units, it will save $4.
Answer:
Decrease <u>Cash </u>and Increase <u>Expense</u>
Explanation:
Jackson Programming paid $500 as rent for the month of June.
The accounting equation is is the basis of the double entry accounting principle system. It is an equation that stipulates that the balance sheet must remain balanced meaning every entry on the debit should be followed with a corresponding credit. It also means for every decrease there should be a corresponding increase.
In Jackson Programming;
A decrease is recorded in CASH because cash was paid, while an increase is recorded in EXPENSE because there is a corresponding increase in rent expenses.
Answer: Market based transfer pricing
Explanation:
A transfer price is the price which is charged by one division of an organization for the product or service which is supplied to another division of the same organization.
The three main criteria which must be satisfied by transfer pricing system in the decentralized company are:
(1) provision of information that allows central management to assess the divisions based on their contribution to total profit of the company
(2) stimulate every manager’s efficiency without the loss of the division’s autonomy.
(3) motivation of the divisional managers in order to accomplish their own profit goal in a way that contributes to the success of the company.
This is market based transfer pricing because the $220 transfer price that is selected is based on quoted external price.
Answer:
d) Able did not terminate.
Explanation:
The partnership did not terminate. Poe and Dean leave the partnership but these transactions require the approval of the other partners.
Dean and Ritt agree to let Poe sale his share.
This new partner and Ritt agree to let Dean sold his participation. The Partner does not terminate. It moves on with the new partners.
