<u>Solution and Explanation:</u>
Answer 1 <u>Calculation of activity rate is as follows:
</u>
<u>Stamping</u> = Budgeted costs divided by Machine tour
= $200000 / 10000 = $20 machine hour
<u>Assembly</u> = Budgeted costs divided by Labor hour
= $400000 divided by 20000 = $20 labor hour
<u>Setup</u> = Budgeted costs divided by setup
= 30000 / 15 = 2000 setup
Answer 2 <u>Overhead cost per unit = Total overhead cost divided by total units produced
.</u>
Saws = $452 per unit
Drills = $673 per unit
Answer and Explanation:
The preparation of the cost of goods sold section of a multiple-step income statement is presented below:
<u>Cost of goods section</u>
<u>Multiple-income statement</u>
Opening inventory $37,000
Estimated return inventory $1,000
Purchase $102,000
Less purchase returns -$4,200
Less: Purchase discount -$2,040
Add: Freight in $800
Less: closing inventory -$30,500
Less: estimated return inventory -$1,500
Cost of goods sold $102,560
Answer:
<u>Cash advance fee</u>
$4.00
(200 x .02 = 4)
<u>Interest for one month at an 18 percent APR
</u>
$3.00
(200 x .18 x 1/12 = 3)
<u>
The total amount she paid</u>
$207
(200 + 4 + 3 = 207)
If she had made the purchase with her credit card and paid off her bill in full promptly
= $200
Answer:
Most changes in accounting principles are only reported in current periods when the principle change takes place.
Explanation:
Accounting principle can be defined as a general guideline to be followed by accountants or financial institutions when they record and report their financial transactions.
A change in an accounting principle involves a change in an accounting method used.
For instance, an accountant switching between First In, First Out (FIFO) to Last In, First Out (LIFO) method of inventory valuation or by using another depreciation method.
Additionally, an accounting principle should only be changed, if it's applicable to the accounting framework being used such as Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Standards (IFRS).
Also, it is important to state in the footnotes of the financial statements a full disclosure to highlight the justification for the preferred change and financial implications of this change.
The following are true about the change in accounting principles;
1. Most changes in accounting principles are retroactively reported.
2. Changes in accounting principles are allowed when new principles are preferable to old ones.
3. Consistency is one of the biggest concerns when a change in accounting principle is undertaken.
Answer: Division of labour
Explanation: Division of labour entails dividing various tasks of making a good amongst the workers in a system. This organizing system is normally used when there is a large work force. The reason why this system is used is because it allows workers to focus on the specific process they are tasked with, allowing them to perform this task more effectively and efficiently, as long as there is mass production of the specific good. This also allows workers to specialize in their specific task, because they have gotten used to executing it.
Because an assembly line apporach is used in Alistair Fashions, the existence of mass production is likely. Each worker, or group of workers, are tasked with specific tasks such as cutting fabric, finishing sleeves, making collars, etc, allowing them to focus on the element they are tasked with and perform their tasks efficiently.
