Answer
The answer and procedures of the exercise are attached in a the following image.
Explanation
Please consider the data provided by the exercise. If you have any question please write me back. All the exercises are solved in a single sheet with the formulas indications.
Answer:
From a buyer's perspective, a sale made on credit represents a liability. While a sale made on cash represents a decrease of current assets.
From a seller's perspective, a sale made on credit or cash increases current assets, but the possibility of a bad debt always exist, therefore, accounts receivables must be periodically adjusted due to bad debts.
If the seller or buyer uses accrual accounting system, the previous description holds, but if they use cash basis accounting, things change a lot. When use cash basis, transactions are recorded only when cash is exchanged, so accounts receivables do not actually increase assets (seller's perspective), and accounts payables do not increase liabilities (buyer's perspective).
Answer:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Explanation:
If overhead is applied using traditional costing based on direct labor hours, the overhead application rate is:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
<u>For example:</u>
Total estimated overhead= $150,000
Allocation base= direct labor hours
Estimated Total number of direct labor hours= 10,000
Predetermined manufacturing overhead rate= 150,000/10,000
Predetermined manufacturing overhead rate= $15 per direct labor hour
Answer:
D.
Explanation:
Firms will hire more labor when the marginal revenue product of labor is greater than the wage rate, and stop hiring as soon as the two values are equal.
Answer:
E. None of the above is correct.
Explanation:
