Room ideas!!

You have just taken a job at a manufacturing company and have discovered that they use absorption costing to analyze product cos

poizon [28]

Answer and Explanation:

Respected Sir,

Sub: Absorption costing to analyze product costs and subsequent cost-volume-profit decisions

As per your requirement please find the explanation below:

Absorption costing is a process by which we add part of the fixed overhead to the production expense of the goods. If we do on a per-unit basis. Here we will compute by dividing the fixed costs by the number of units that we built and sold over the era. Whereas Variable costing includes fixed overhead as a lump sum instead of a per-unit price.

Under this process, all your variable costs like equipment, raw materials, and shipping are included. We will add the maximum fixed overhead costs for the duration. Such costs are not calculated on a per-unit basis. Rather than we deduct them as a lump-sum expense from your income amount.

Variable costing is really useful as it reveals the earnings after all the expenses are paid for the accounting period. While you would not have earned revenue for the goods we purchased as some may be in the inventory, we are showing you have paid all of your expenses for the time. We have excess revenue when you actually sell the finished goods in the warehouse.

The absorption approach is not all that effective as absorption costing will inflate the income figures excessively in any given span of accounting. Since you're not going to subtract any of your fixed costs as we did not sell any of us produced goods, our profit and loss report doesn't reflect the maximum expenses you've had for the time. Therefore, these results may mislead us when our profitability is analyzed.

Regards

ABC

7 0

3 years ago

EB12.

mote1985 [20]

Answer:

The cost assigned to Job 7 at the end of the week is 5,700 dollars.

Explanation:

In job order costing the cost that is to be assign to a specific order is sum of actual direct material cost and actual labour cost require to perform that job. Factory overheads are also added to the job cost on the basis of allocation method (on basis of budgeted applied OH rate).

So Following costs will be assign to Job 7.

RAW materail = $ 700

Labor Cost = $ 3000

Overhead = $ 2000 (10* 20)

Total Cost = $ 5700

4 0

4 years ago

If nicotine in cigarettes is highly addictive, why would it make economic sense for producers of cigarettes to offer free sample

makkiz [27]

If the nicotine cigarettes are highly addictive and they were to offer the free samples to young adults then it will make the people be highly addictive in the nicotine cigarettes and this will cause the economy in the producers to have a less demand in elasticity. If it has a less elasticity, then it will cause a large price change, affecting the consumed quantity by the consumers.

8 0

3 years ago

Read 2 more answers

On April 1, 2016, Maria Adams established Custom Realty. Maria completed the following transactions during the month of April:A.

kompoz [17]

Answer:

The solution and the calculation is shown on the first , second , third and fourth uploaded image

Explanation:

6 0

3 years ago

Tarrant Corporation was organized this year to operate a financial consulting business. The charter authorized the following sto

Sauron [17]

Solution :

Tarrant Corporations

First of all let us prepare the Journal Entries

1. Cash (7000 x 38) 266,000

Common stock (7000 x 19) 133,000

Paid in capital in excess of stated value

common stock (7000 x 19) 133,000

2. Cash (2600 x 43) 111,800

common stock (2600 x 19) 49400

Paid in capital in excess of stated value

Common stock (2600 x 24) 62400

3. Income summary 7000

Retained earing 7000

Tarrant corporation

Balance sheet - shareholder's section

Share holder's equity

Contributed capital

$ 19 par, issued and outstanding 9600 shares = 182400

Paid in capital in excess of par 196800

Total contributed capital 379200

Retained earnings 7200

Total shareholder's equity 372,000

8 0

3 years ago