Answer:
Activity based costing method has gained significance in the business world.
Explanation:
a. Activity based costing is a method in which cost driver is identified for each cost that occurs during the manufacturing process. The overhead rate is calculated based on cost drivers. This method has gained significance in business due to the ease of its application and costs are assigned to their respective cost drivers.
b. The activity based costing is used by various organizations in Australia. Booth and Giacobbe, Clarke and Mia and many other companies have successfully implemented ABC costing system in their businesses. The increased and diverse products costs are easily calculated by applying activity based costing method.
c. The companies can use the activity cost method to calculate the overhead rate that will be applied to the product. These overheads will be included in the cost of the product and then cost per unit for each unit produced is identified. This helps managers to select suitable selling price and cost cutting managements.
A conflict of interest between the stockholders and managers of a firm is referred to as the agency problem (option c).
<h3>What is the agency problem?</h3>
The agency problem is a conflict of interest between the managers of the company and the principal (shareholders). The agency problem
occurs when the interest of the managers and the shareholders are not aligned.
For example, if the income of managers are tied to net income, it might motivate managers to undertake risky projects that might not maximise shareholders wealth. This would lead to agency problem.
To learn more about agency problem, please check: brainly.com/question/16834354
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Answer: Integrity and ethical values
Explanation:
The integrity and the ethical values are the practices in an organization that helps in making various types of effective decisions on the basis of the given situation in an organization.
The integrity is one of the type of ethical and the moral principle that help in taking right decisions with honesty.
According to the given question, the COSO enterprise risk Management is one of the type of organizational framework that reflecting the integrity and the ethical value in the form of internal organizational environment for measuring the proper use of company's resources.
Therefore, The given answer is correct.
Answer:
The required rate of return is 17.2%
Explanation:
To calculate the required rate of return, we will use the CAPM or Capital asset pricing model. The formula for the required rate of return (r) is:
r = rRF + Beta * (rpM)
Where,
- rRF is the risk free rate.
- Beta is the measure of the risk
- rpM is the market risk premium
Required rate of return for Puffy Shirt Inc's stock is:
r = 0.04 + 1.2 * 0.11
r = 0.172 or 17.2%
