Yes I believe your scenario is correct
Some time is impacted by the way you live with family and friends or in what rank of life style are you in. medium, small or large
Answer:
D) Johnson has failed to use the correct cost driver as the cost-allocation base for setup costs.
Explanation:
One of the main disadvantages of ABC costing method is that it is very hard and expensive to implement, and sometimes you cannot allocate all overhead costs to specific cost drivers. That is what happened here with Johnson's costing method, they combined two cost drivers and allocated resources using the number customer orders which is not a valid base, e.g. one single large order represents higher costs than 10 small orders.
ABC costing is not accepted by US GAAP due to its limitations or how hard it is to apply correctly, but it is a very useful information source for making decisions. The problem is, if gathering the information is worth the effort and extra cost of ABC?
Answer:
If Joel purchases the warehouse, he can rent it to the corporation and charge the highest possible rent within reasonable terms. Joel can avoid double taxation and the corporation will be able to deduct rent expense.
Joel is also able to deduct depreciation expenses, real estate taxes, and other costs from his passive income.
As an individual, Joel is taxed differently for capital gains in case he sells the warehouse, and that rate is generally lower than corporate tax rates.
Answer:
The answer is: Don's weekly salary is $460 and his sales' commission is 5%
Explanation:
We have to solve the following two equations:
Don's salary week 1 = b + $3,000c =$610
Don's salary week 2 = b + $4,000c =$660
Where:
- b = Don's base weekly salary
- c = sales' commission
Step 1:
b + $4,000c =$660
<u>-(b + $3,000c =$610)</u>
$1,000c = $50
Step 2:
c = $50 / $1,000 = 0.05 = 5%
Step 3:
b + ($3,000 x 5%) = $610
b + $150 = $610
Step 4.
b = $610 -$150 = $460
