Answer:
The adjusting entry is:
Debit Depreciation Expense - Equipment $1,800
Credit Accumulated Depreciation - Equipment $1,800
To record depreciation expense.
Explanation:
The adjusting journal entry records the depreciation expense for the year and adds the expense to the accumulated depreciation account. The accumulated depreciation account is a contra account to the Equipment account. The purpose that this contra account serves is to keep the Equipment account at its cost value while the gradual write-off of its value is reflected in an opposite account.
Answer:
This profit equation is an equation of a parabola that opens downward (Since A=-0.07<0) and has its vertex at
Thus, revenue is maximized when x=250 hundred units. At this quantity maximum profit is
P(250)=3800.23 hundred dollars
b. Profits are maximised at x=250 hundred units. The per unit price at this is,
Answer:
500 bottles should be ordered at a time.
20 orders should the warehouse place in a year to minimize inventory costs.
Explanation:
The number of bottles which minimizes the warehouse cost is known as the economic order quantity.
Economic Order quantity minimizes both the holding or carrying cost of inventory as well as the ordering cost.
<em>Economic Order quantity = √((2 × Annual demand × cost per order) / Holding cost per unit)</em>
= √((2 × 10,000 × $125) / $10)
= 500 bottles
<em>Number of Order = Total Demand / Economic Order Quantity</em>
= 10,000 / 500
= 20 orders
Conclusion :
500 bottles should be ordered at a time.
20 orders should the warehouse place in a year to minimize inventory costs.
C. Introducing new products with limited associated advertising
Answer:
Gross profit = net sales revenue - cost of goods sold. But what happens when your company doesn't sell any goods, specially if they only sell services and it is impossible to determine the COGS.
This is basically an accounting issue since the <u>IRS</u> defines COGS as:
- <em>The cost of products or raw materials, including freight </em>
- <em>Storage
</em>
- <em>Direct labor costs (including contributions to pensions or annuity plans) for workers who produce the products
</em>
- <em>Factory overhead the cost of inventory items sold </em>
So if your company doesn't sell any items from inventory, the IRS will not consider that your company incurred in COGS.
Reporting COGS is very useful for deducting business expenses, but it is not mandatory. Also, any expenses deducted as COGS cannot be deducted again as any other type of cost. So it is simply an accounting practice that helps certain industries to report their business expenses more clearly and in an orderly manner. But if it is too complicated to determine your company's COGS, then you can report your expenses in other ways and reduce your problems.
