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DENIUS [597]
3 years ago
9

Pearson Electric Company uses the high-low method to analyze mixed costs. The following information relates to the production da

ta for the first six months of the year. Month Cost(Y) Hours(H) January $ 7,300 260 February $ 9,125 730 March $ 7,540 410 April $ 7,485 330 May $ 9,460 980 June $ 9,030 705 How should the cost function be properly stated using the high-low method?
Business
1 answer:
Simora [160]3 years ago
8 0

Answer: 6520 + 3x

Explanation:

Firstly, we need to calculate the variable cost per hour which will be:

= (Highest activity cost – Lowest activity cost)/(Highest activity hour – Lowest activity hour)

= (9460 - 7300)/(980 - 260)

= 2160 / 720

= 3

We'll also find the fixed cost which will be:

= Fixed cost = Highest activity cost – (Variable cost per hour x Highest activity hour)

= 9460 - ( 3 x 980)

= 9460 - 2940

= 6520

Therefore, the cost function will be:

= 6520 + 3x

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Suppose you win the lottery and have two options: A. Take $1 million now. B. Take $1.2 million to be paid out as 300,000 now and
laila [671]

Answer:

A. Take $1 million now.

Explanation:

A. If we take $1 million now the present value of the money is $1 million.

B. If we choose to take $1.2 million paid out over 3 years then present value will at 10% will be;

$300,000 + $300,000 / 1.2 + $300,000/ 1.44 + $300,000 / 1.728

$300,000 + $250,000 + $208,000+ $173,611 = $931,944

The present value of option B is less than present value of option A. We should select option A and take $1 million now.

4 0
2 years ago
Malone Co. owned 70% of Bernard Corp.'s common stock. During November 2021, Bernard sold merchandise to Malone for $150,000. At
elena-14-01-66 [18.8K]

Answer:

$18,000

Explanation:

Calculation to determine what The amount of intra-entity gross profit remaining in ending inventory at December 31, 2021 that should be eliminated in the consolidation process is:.

Using this formula

Intra-Entity Gross Profit =(Transfer Price × Percentage of Bernard's GP) × Intra-Entity Transfers Remaining in Ending Inventory

Let plug in the formula

Intra-Entity Gross Profit=($150,000×30% )×40%

Intra-Entity Gross Profit=$45,000×40%

Intra-Entity Gross Profit=$18,000

Therefore The amount of intra-entity gross profit remaining in ending inventory at December 31, 2021 that should be eliminated in the consolidation process is:$18,000

6 0
3 years ago
"when the number of units produced exceeds the number of units sold, net income under absorption costing will be:"
r-ruslan [8.4K]

Answer:

The answer is that the net income under absorption costing would be higher than the net income under variable costing.

Explanation:

Absorption costing and variable costing are terms used in accounting contexts. Absorption costing, also known as full costing, incurs overhead costs when the product is sold; not before it. Variable costing, also referred to as direct costing, would include overhead costs during the period the costs occurred. In this condition, net income would be higher using absorption since overhead costs would not be included until the product is sold.

5 0
3 years ago
Elliot is suing Acme, Inc., for a breach of contract, but because Acme has very little in assets, he asks the court to pierce th
Sergeu [11.5K]

Answer: The court would likely approve Elliot's request in the following situation: <u><em>The corporation was under-capitalized from the beginning, and never had sufficient assets to operate as a viable business.</em></u>

Under the given scenario i.e. for a breach of contract , the condition will apply if the corporation i.e. Acme Inc. was under-capitalized from the start, and they never had predominating assets to work as a viable organization.

<u><em>Therefore the correct option is (a)</em></u>

7 0
3 years ago
The government of Happyland collects $100 million in taxes each year and currently has a public debt of $1.2 billion, which it f
DanielleElmas [232]

Answer:

No, the debt is not manageable because interest payments equal $96 million per year.

Explanation:

Annual interest payment for debt = 0.08*1.2B = $96 million

Only the interest payment is about 96% of government revenue, so its not manageable.

5 0
3 years ago
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