Please select the word from the list that best fits the definition

A company has been using the fair-value method to account for its investment. The company now has the ability to significantly c

kotykmax [81]

Answer:

Option "C"is the correct answer to the following statement.

Explanation:

The retrospective method effect requires the development of new accounting procedures. In other terms, the retrospective method would affect the reporting of past time financial statements.

In this situation, the company will use the equity method at the place of the Fair-value method for calculating and control over their investment, so the above option is correct.

8 0

4 years ago

Mama Fran's Bakery makes a variety of home-style cookies for upscale restaurants in the Atlanta metropolitan area. The company's

Usimov [2.4K]

Answer:

Standard cost per pound= $34.21

Explanation:

The standard cost is the sum of direct material, direct labor, and total overhead. We will calculate each separate.

Direct material:

10 ounces cookie mix for $0.80= $8

5 ounces of milk chocolate for $4= $20

1 ounce of almonds for $12 the pound= $0.75

1 pound= 16 ounces

1 ounce= 0.0625*$12= $0.75

Direct labor:

1 minute in the mixing department

2 minutes in the baking department.

Mixing= $14.40* (1/60)= $0.24

Baking= $18*(2/60)= $0.6

Overhead:

Variable overhead is applied at a rate of $32.40 per DLH

Fixed overhead is applied at a rate of $60.00 per DLH.

Variable= 32.40 * (3/60)= $1.62

Fixed= 60* (3/60)= $3

Standard cost per pound= (8 + 20 + 0.75) + (0.24 + 0.6) + (1.62 + 3)= $34.21

4 0

4 years ago

A firm has a debt-equity ratio of .64, a cost of equity of 13.04 percent, and a cost of debt of 8 percent. Assume the corporate

raketka [301]

Answer:

11.41%

Explanation:

The cost of equity of an all-equity firm can be derived from the below formula:

Levered Cost of Equity = Unlevered Cost of Equity + (Unlevered Cost of Equity - Cost of Debt) * (1 - tax) * Debt-Equity Ratio

Levered Cost of Equity=13.04%

Unlevered Cost of Equity=the unknown(let us assume it is U)

cost of debt=8%

tax rate=25%

debt-equity ratio=0.64

13.04%=U+(U-8%)*(1-25%)*0.64

13.04%=U+(U-8%)*0.75*0.64

13.04%=U+(U-8%)*0.48

0.1304=U+0.48U-0.0384

0.1304+0.0384=1.48U

1.48U=0.1688

U=0.1688/1.48

U=11.41%

7 0

3 years ago

Merchant Company issued 10-year bonds on January 1. The 6% bonds have a face value of $727,000 and pay interest every January 1

Nonamiya [84]

Answer:

Merchant Company

On July 1 of the first year, Merchant should record interest expense (rounded to the nearest dollar) of:

= $22,472.

Explanation:

a) Data and Calculations:

Face value of bonds = $727,000

Price of bonds = 604,217

Discounts = $122,783

Period of bonds = 10 years

Coupon rate of interest = 6%

Market interest rate = 7%

Payment of interest = Semi-annually (Jan. 1 and July 1)

July 1:

Cash payment = $21,810 ($727,000 * 3%)

Interest based on market rate = 21,148 ($604,217 * 3.5%)

Discount amortization = $662

Interest expense = $22,472 ($21,810 + $662)

7 0

3 years ago

MCO Leather Goods manufactures leather purses. Each purse requires 2 pounds of direct materials at a cost of $4 per pound and 0.

ruslelena [56]

Answer:

Direct Materials Purchases Budget Sept 51680 October 60160

Direct labor Budget September 54600 October 66150

Overhead Budget Sept $ 20920 October $23,230

Explanation:

The budgets are calculated in the following ways.

We multiply the required material , direct labor hour or variable overhead rate with the given number of units and then with the cost per unit to get the total costs.

MCO Leather Goods Manufacturers

Direct Materials

Purchases Budget

September October November

Production 5200 6300 6100

Pounds per units * 2 *2 *2

Total Pounds 10400 12600 12200

Cost per pound * $4 * $4 *$4

Total cost 41600 50400 48800

On hand

Inventory + 10080 + 9760 ---

Direct Materials

Purchases Budget 51680 60160

MCO Leather Goods Manufacturers

Direct Labor Budget

September October

Production 5200 6300

Hours required per unit * 0.7 *0.7

Total hours 3640 4410

Rate per hour * $15 *$15

Total labor Cost 54600 66150

MCO Leather Goods Manufacturers

Factory Overhead Budget

September October

Production 5200 6300

Hours required per unit * 0.7 * 0.7

Labor Hours 3640 4410

Variable OH * $3 *$3

Variable Costs $10920 $13230

Fixed OH + $10,000 +$10,000

Total OH $ 20920 $23,230

8 0

3 years ago