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.
The answer is a.True
The cost of the fixed asset is already excluded from the net income. In this case, the rate of return can be computed by the total net income divided by the cost of the fixed asset. So that would be $200,000/$400,000. The rate of return would be 50%
Convenience products like Coke are available almost everywhere in the United States. Thus, Coke uses intensive distribution, which is related to the strategy of making the product available at many different retailers.
This is a marketing strategy widely used by companies that supply non-durable consumer goods, which are those that are consumed quickly, such as food, beverages and medications.
Therefore, non-durable goods such as Coke need to be replenished quickly, justifying the company's intensive distribution strategy, which makes its products easily available to consumers, increasing its profitability and positioning.
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Answer:
a. lower than $0.50
Explanation:
As there is economies of scale, the cost per unit will decrease as the output increase. Because the cost for 1,000 units already is 0.50 per unit at a higher level of output 1,500 in this case; the cost per unit is forced to be lower to make the statement of economy of scale true.
Answer:
See the explanation below:
Explanation:
Interest expenses = $6,950 × 3.75% = $261
Cash received = $6,950 - $261 = $6,689
The payment an be in two forms; it can be immediate or delayed. The two are done below:
a. Journal Entries for Immediate payment
Details Dr ($) Cr ($)
Cash 6,689
Card expenses 261
Sales 6,950
b. Journal Entries for delayed payment
When the transaction is carried out, we have:
Details Dr ($) Cr ($)
Account receivables 6,689
Card expenses 261
Sales 6,950
When the payment is received, we have:
Details Dr ($) Cr ($)
Cash 6,689
Account receivables 6,689
