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san4es73 [151]
3 years ago
15

Part E14 is used by M Corporation to make one of its products. A total of 16,500 units of this part are produced and used every

year. The company's Accounting Department reports the following costs of producing the part at this level of activity:
Per Unit
Direct materials $ 3.60
Direct labor $ 8.20
Variable manufacturing overhead $ 8.70
Supervisor's salary $ 4.10
Depreciation of special equipment $ 2.50
Allocated general overhead $ 7.70
An outside supplier has offered to make the part and sell it to the company for $27.50 each. If this offer is accepted, the supervisor's salary and all of the variable costs, including the direct labor, can be avoided. The special equipment used to make the part was purchased many years ago and has no salvage value or other use. The allocated general overhead represents fixed costs of the entire company, none of which would be avoided if the part were purchased instead of produced internally. In addition, the space used to make part E14 could be used to make more of one of the company's other products, generating an additional segment margin of $28,500 per year for that product. The annual financial advantage (disadvantage) for the company as a result of buying part E14 from the outside supplier should be:

(A) ($78,750)
(B) $28,500
(C) ($141,900)
(D) $(19,350)
Business
1 answer:
ioda3 years ago
8 0
Idk idk idk idk idk idk idk idk idk idk idk idk
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Answer:

Explanation:

The journal entries are shown below:

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(Being the adjustment is recorded)

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3 years ago
If investors expect inflation to increase over the next 20 years and the maturity risk premium is expected to increase over the
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Answer: normal /upward sloping

Explanation:

The yield curve is a curve that shows the relationship that exist between interest rate and time to maturity. According to the expectation theory, it is stated that the yield curve will be upward sloping when there's increase in inflationary expectations.

The slope of the yield curve helps in giving a clue to know the direction of future interest rates. It should be noted that an upward sloping curve means that there is an expectation of higher interest rates in the future.

Therefore, when investors expect inflation to increase over the next 20 years and the maturity risk premium to increase over the next 5 years, the general yield curve will be upward sloping.

5 0
3 years ago
On January 1, 2018, Jolley Corp. paid $250,000 for 25% of the voting common stock of Tige Co. On that date, the book value of Ti
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Answer:

            Dr. Investments in Associates 250,000

            Cr.            Cash                                 500,000

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Explanation:

The equity method is a type of accounting used to incorporate investments. It is used when the investor holds significant influence over the investee but does not exercise full control over it.

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- Jolley receives dividends of $10,000, which is 25% of $40,000, and records a reduction in their investment account. The reason for this is that they have received money from their investee.

- Jolley records the net income from Tige Co. as an increase to its Investment account.

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