All categories

2 years ago

The costs incurred before opening a business

1 answer:

8 0

The expenditure incurred prior to the incorporation of an enterprise is to be considered as a pre-incorporation capital expenditure. The expenditure incurred prior to the 'setting-up of business' is to be considered as a pre-operative capital expenditure.

You might be interested in

Cane Company manufactures two products called Alpha and Beta that sell for $120 and $80, respectively. Each product uses only on

pashok25 [27]

Answer and Explanation:

1. The total amount of traceable fixed manufacturing overhead is given below:-

Alpha Beta

Number of units produced 100,000 100,000

Traceable fixed

manufacturing overhead $16 $18

Total amount of traceable fixed

manufacturing overhead $1,600,000 $1,800,000

2. The total amount of common fixed expenses is given below:-

Alpha Beta

Number of units produced 100,000 100,000

Common fixed

manufacturing overhead $15 $10

Total amount of common fixed

manufacturing overhead $1,500,000 $1,000,000

3. The computation of increase or decrease of profit is shown below:-

Selling price $80

Less: Variable cost

Direct material ($30)

Direct labor ($20)

Variable manufacturing

overhead ($7)

Contribution margin $23

Less: Variable selling

expenses ($12)

Profit per unit $11

Total profit increase

(10,000 × $11) $110,000

The computation of increase or decrease of profit is as shown below:-

Selling price $39

Less: Variable cost

Direct material ($12)

Direct labor ($15)

Variable manufacturing

overhead ($5)

Contribution margin $7

Less: Variable selling

expenses ($8)

Profit per unit ($1)

Total profit decrease

(5,000 × -$1) -($5,000)

4 0

3 years ago

Which level of quality of information would eventually exist in the market for lemons assuming there was no way to gain assuranc

Neko [114]

The level of quality of information would eventually exist in the market for lemons assuming there was no way to gain assurance regarding the accuracy of the information would be low only.

In the given scenario we are given that there is no way to reassure ourselves that the information is accurate about the lemons in the existing market.

So we can not be a hundred percent sure that the information regarding the lemons existing in the market is correct.

As a result, if there was no method to verify the authenticity of the information, only low-quality information would eventually be available in the market for lemons.

Learn more about the market:

brainly.com/question/25754149

#SPJ4

3 0

1 year ago

The term economies of scale refers to the fact that as the:

frutty [35]

Answer:

quantity of product produced in a given period increases, the cost of manufacturing each unit decreases

Explanation:

Economies of scale happens when the average total cost (variable + fixed production costs per unit) decreases as total output increases. This generally takes place because fixed costs are the same for a small number of units produced or a large number of units produced, so the average fixed cost per unit tend to decrease as more units are produced (at least up to certain point). Variable production costs per unit can also decrease as total output increases since materials might be purchased in larger quantities resulting in higher discounts or labor productivity increases.

7 0

2 years ago

Your task is to take this and construct a graphical representation of the data. in doing so, you determine that as the price of

fenix001 [56]

<span>Your task is to take this and construct a graphical representation of the data. in doing so, you determine that as the price of soup rises, the quantity of soup demanded decreases. This confirms the Law of Supply and Demand which states that the supply is inversely proportional to the demand. Simply speaking, whenever there is an increase in the price, the supplier tends to produce an excess supply even though the demand is low to generate a greater profit.</span>

3 0

3 years ago

1.42 pointsItem 4Item 4 1.42 pointsOn January 1, Revis Consulting entered into a contract to complete a cost reduction program f

deff fn [24]

Question Continuation

Prepare the following journal entries for Revis:

1. The journal entry on January 31 to record the first month of revenue under the contract.

2. Assuming total cost savings exceed target, the journal entry on June 30 to record receipt of the bonus.

3. Assuming total cost savings fall short of target, the journal entry on June 30 to record payment of the penalty.

Answer:

1. The journal entry on January 31 to record the first month of revenue under the contract.

Possible Price -------------------------------Possibility------------Expected Amount

$130,000 ($20,000*6+$10,000) ------80% ------- --------------$104,000 (80% * $130,000)

$110,000 ($20,000*6-$10,000) --------20% -----------------------$22,000 (20% * $110,000)

Expected value--------------------------------------------------------------$126,000 ($104,000 + $22,000)

Accounts ------------------------Debit------------Credit

Cash -------------------------------$20,000 (Debit)

Bonus receivable----------------$1,000 (Debit)

Service revenue --------------------------------- $21,000 ($126,000/6)(Credit)

2. If total cost savings exceed target, record the entry on June 30 for receipt of the bonus

Accounts --------------Debit--------------------------Credit

Cash --------------------- $10,000 (Debit)

Bonus receivable-------------------------------------$6,000 (Credit) ($1000 * 6)

Service revenue ------------------------------------- $4,000 (Credit)

3. If total cost savings fall short of target and record the entry on June 30 for payment of the penalty.

Accounts --------------Debit--------------------------Credit

Service Revenue ---------------- $16,000 (Debit)

Bonus receivable-------------------------------------$6,000 (Credit) ($126,000 / 6)

Cash ------------------------------------- $4,000 (Credit)

3 0

3 years ago

The costs incurred before opening a business​

The costs incurred before opening a business