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UkoKoshka [18]
3 years ago
15

How important is it to trace costs appropriately? Explain. As you are beginning to think about the importance of tracing costs a

ppropriately, please consider the differences between variable costing and absorption costing. What implications does each of these have on such things as financial reporting of profit and pricing your products for the marketplace?
Business
1 answer:
Rasek [7]3 years ago
6 0

Answer:

Cost tracing is important because it helps a firm to make wise decisions.

Explanation:

Cost tracing can be defined as the process of matching a cost directly with a product being produced.

Variable cost that are accompanied with inventory are direct materials, direct labour and variable manufacturing overheard. the variable manufacturing overheard flunctuates based on amount of production. example is cost of electricity and gas.

Variable costing can also be used in determining cost-volume-profit relationships. This cost-volume-profit analysis aids managers in comprehending the minimum amount of inventory they need to produce to break even on their cost.

Variable costing can also be used in valuing inventory which makes it easier to compare the profitability of a product.

Absorption costing on the other hand, is advantageous for a small business because it complies with GAAP ( Generally Accepted Accounting Principle).

Absorption costing systems are easy to setup and less complicated than other costing systems. but the drawback of absorption costing is the way they handle fixed overheard cost.

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Madison Company issued an interest-bearing note payable with a face amount of $30,600 and a stated interest rate of 8% to the Me
Sidana [21]

Answer:

a. $0

b.  $31,620

Explanation:

a. Notes Payable do not fall under Operating activities in the cashflow statement but rather under Financing Activities which is where cash transactions that provide the business with capital and liability funds are accounted for.

The Operating activity balance from this is therefore $0.

b. The liabilities will include the Note and the interest accumulated at year end.

Interest accumulated = 30,600 * 8% * 5/12 months = $1,020

Liabilities = 30,600 + 1,020 = $31,620

3 0
3 years ago
Which sentences in this paragraph describe two government policies that liberalize the economy? The government of a country obse
ehidna [41]
<span>(C) "In addition, it introduces a policy to provide free education to all children up to grade 10." This step is aimed at producing more skilled labor. I hope this helps you! <3</span>
6 0
3 years ago
Read 2 more answers
In the Shaping Department of Rollins Company the unit materials cost is $5.00 and the unit conversion cost is $3.00. The departm
sukhopar [10]

Answer:

The answer is: C

Explanation:

This costing question assesses the stages of completion of inventory during the manufacturing process. The significant point of information is: all materials are added at the beginning of the process, meaning at the end of the period, materials are fully complete, that is, no more materials will be added to the ending work in process. However, the conversion costs are yet to be fully utilised. In this case, equivalent units (partial units computed as completed units for purposes of costing at the end of a financial period) will have  to be calculated to reflect the stage of completion.

Materials cost: 5000 units at 100% completion yields 5000 units for costing

Conversion costs: 5000 units at 20% conversion completion is equal to: 5000*0.2= 1000 equivalent units

The costing calculation for ending work in process is as follows:

Materials cost: 5000 units at $5.00 per unit = $25,000

Conversion cost: 1000 units at $3.00 per unit = $3000

The total cost for ending work in process is the sum of the materials cost and conversion cost = $28,000

8 0
3 years ago
A division has the following data: Sales $320,000, Variable costs $200,000, and Fixed costs $140,000. If the division were elimi
pashok25 [27]

Answer:

Effect on income= $120,000 loss

Explanation:

Giving the following information:

Sales $320,000

Variable costs $200,000

Fixed costs $140,000.

None of the fixed costs are avoidable. Therefore, they shouldn't be taken into account to make the decision.

Effect on income= Sales - varaible cost

Effect on income= 320,000 - 200,000= $120,000 loss

4 0
3 years ago
what budget is a type of financial report that scrutinizes the inflow of money in a given financial year?
earnstyle [38]

That is known as a cash flow statement.

6 0
4 years ago
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