Answer:
1. Option c is correct option.
2. Option b is correct option.
Explanation:
Part 1. Direct material budget is prepared for estimating the quantity of raw materials to be purchased. Following is the formula used for the computation of direct material budget:
D. Raw Material required to be purchased = Raw Material required for production + Desired closing Raw material for the last year - Opening Raw Material
Part 2. The desired ending raw material inventory for the last period.
And this is evident from the formula in the part 1 which tells that the desired closing raw material is that of the last year.
Answer:
Proportion of sales of each department.
Explanation:
Advertising expense directly effects the sales of the business. As the campaign is made store-wide sales and it does not directly traceable to any specific department. It need proper basis for allocation of expenses. The proportion of sales of each department is the most suitable basis from all of the given options because the share of benefit from the campaign is received in the form of sale. A campaign might mostly effects the sales.
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Answer:
Two adjustments must be made to year 1's financial statements:
- The income statement must be adjusted since net income increased because cost of goods sold decreased.
- The balance sheet must be adjusted since retained earnings will increase because net income increased.
Explanation:
The retrospective approach hides any changes with the accounting methods, and shows the financial statements as if the new accounting method was used all along and there was no error or change.
Answer:
A) if the present value of the expected income stream associated with the investment is greater than the full cost of the investment project.
Explanation:
It is when the present value of the expected income stream associated with the investment is greater than the full cost of the investment project that the project is profitable. Most investments are undertaken with the aim of making profits.
The net present value can be used to determine if the present value of the expected income stream associated with the investment would be greater than the full cost of the investment project.
