Answer:
(A) estimated annual costs and expected annual activity
Explanation:
The formula to compute the predetermined overhead rate is shown below:
Predetermined overhead rate = (Total estimated manufacturing overhead) ÷ (estimated direct labor-hours or estimated machine hours)
It is always calculated on the estimated amount and estimated annual activity i.e direct labor hours or machine hours
So the correct option is a.
Answer:
$1,000,000
Explanation:
Gallagher Corporation
Stock option × Option estimated fair value /Numbers of years
Stock option $400,000
Option estimated fair value $10
Numbers of years 4
Hence:
($400,000 × $10) / 4 years
=$4,000,000/4years
= $1,000,000
Therefore pretax compensation expense for year 1 will be $1,000,000
Payback period is the length of time a project recovers back
the money invested.
Payback period= invested cash/ Net annual cash flow
Therefore payback period
=40,000/5000
=8.0 years
Since depreciation is a non- cash
expense it is ignored while calculating payback period.
Answer:
a. an invitation to submit offers, not an offer itself.
Explanation:
When a property is to be sold at an auction it involves an invitation for interested buyers to submit offers to the seller. The seller will now consider the offers and see the best one for him.
There is usually no price stated for the auction and seller goes for the highest bid.
If however if the seller says that there is no reserve price or that the reserve price was met, it can now be considered an offer in itself.
In this case Owen is offering the property at a live auction and does not state requirements for a reserve price
