Simmons, Inc. uses the lower-of-cost-or-market method to value its inventory that is accounted for using the LIFO method. Data regarding an item in its inventory is as follows: Cost $26 Replacement cost 20 Selling price 30 Cost of completion and disposal 2 Normal profit margin 7 What is the lower-of-cost-or-market for this item?
Answers
Answer:
The lower- of- market- or cost for the item is $21
Explanation:
In the lower of cost or market, the market begins at the replacement cost which is $20, which is then limited or restricted to a ceiling and a floor.
The ceiling is computed as:
Ceiling = Selling price - Completion cost
where
selling price is $30
Completion cost is $2
Putting the values above:
Ceiling = $30 - $2
Ceiling = $28
Computing the floor as:
Floor = Ceiling - Normal profit margin
Floor = $28 - $7
Floor = $21
As the market cannot be lower than the floor which is $21. Therefore, the lower of cost which is $26 and the market which is $21. But have to take lower. So, it is $21.
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Answers
Answer:
Preparation of Cash flow statement is below:-
Explanation:
Please find the full information of question
The following are the financial statements of Nosker Company. NOSKER COMPANY Comparative Balance Sheets December 31 Assets 2017 2016 Cash $36,400 $19,600 Accounts receivable 33,000 19,200 Inventory 31,000 20,400 Equipment 59,400 77,600 Accumulated depreciation—equipment (29,800 ) (23,700 ) Total $130,000 $113,100 Liabilities and Stockholders’ Equity Accounts payable $28,700 $ 16,100 Income taxes payable 7,100 8,000 Bonds payable 26,300 32,500 Common stock 18,200 13,600 Retained earnings 49,700 42,900 Total $130,000 $113,100 NOSKER COMPANY Income Statement For the Year Ended December 31, 2017 Sales revenue $242,100 Cost of goods sold 175,500 Gross profit 66,600 Operating expenses 23,900 Income from operations 42,700 Interest expense 2,400 Income before income taxes 40,300 Income tax expense 8,100 Net income $32,200. Prepare a statement of cash flows for Nosker Company using the direct method.
Nosker Company
Statement of cash flow
For the year ended 31 December, 2017
Cash flow from operating activities
Receipt from customers $228,300
($242,100 - $13,800)
Less Cash payment
Suppliers $173,500
($175,500 + $10,600 - $12,600)
Operating expenses $8,300
(23,900 - $15,600)
Income tax expenses $900
($8,100 + $900)
Interest expenses $35,100
Cash flow from investing activities
Sale of equipment $8,700
Net cash provided by Investing activities $8,700
Cash flow from financing activities
Issuance of company stock $4,600
Less: Land Redemption $6,200
Less: Payment of cash dividend $25,400
Net cash used by financing activities $27,000
Net Increase in cash $16,800
Beginning cash $19,600
Cash at end of period $36,400
Answers
Answer:
Returns to scale = 1.15
Increasing returns to scale.
Explanation:
Cobb-Douglas production function of the form:
Here, we are using a simple rule of factors to find the returns to scale:
Hence,
By adding up the powers of L and K, we can get the returns to scale.
Returns to scale = 1.15
Suppose, the power of L be 'a' and the power of K is 'b',
if a + b = 1, then it exhibits constant returns to scale
if a + b > 1, then it exhibits increasing returns to scale
if a + b < 1, then it exhibits decreasing returns to scale.
In our case,
a + b = 1.15 which is greater than 1, so this production function exhibits increasing returns to scale.
Answers
Answer:
The actual usage of materials was less than the standard allowed.
Explanation:
Based on these variances, one could conclude that the actual usage of materials was less than the standard allowed because the Company planned to produce 3,000 units of its single product during November in which the standards for one unit of the product specify six pounds of materials at $0.30 per pound but at the end the Actual production in November was 3,100 units instead of 3,000 unit which was planned .
Therefore Materials quantity variance = (AQ - SQ) SP.
A favorable materials quantity variance can occurred in a situation where the actual usage of materials was less than the standard allowed which is AQ < SQ.
Answers
Answer:
$192,880
Explanation:
We need to determine the balances for each of the items.
Work in process =(5,000/225,000*100) × 8,000
= 2.2% × 8,000
= 176
Finished goods = (20,000/225,000 *100) × 8,000
= 8.9% × 8,000
= 712
Cost of goods sold = (200,000/225,000 *100) × 8,000
= 88.9% × 8,000
= 7,120
Therefore, the revised ending balance for COGS would be ;
= 200,000 - 7,120
= $192,880
Answers
Answer:
Hence, the manufacturing margin for Part A is $1,400,000
Therefore, the correct option is B i.e $1,400,000
Explanation:
The manufacturing margin is somewhat same like contribution margin. SO, here we applying the formula of contribution margin.
For computing the manufacturing margin for Part A, the calculation is shown below.
Manufacturing margin = (Selling Price per unit × Number of units) - (Variable manufacturing cost per unit × Number of units)
= (5,000 × $800) - ($5000 × $520)
= $4,000,000 - $2,600,000
= $1,400,000
Hence, the manufacturing margin for Part A is $1,400,000
Therefore, the correct option is B i.e $1,400,000
Final answer:
The manufacturing margin for Part A is calculated by subtracting variable costs per unit from the selling price per unit and multiplying the result by the total number of units sold. Therefore, the manufacturing margin for Part A is $1,000,000.
Explanation:
The manufacturing or contribution margin is the difference between the selling price per unit and the variable costs per unit. In this case, the selling price per unit is
$800 and variable manufacturing cost per unit is $520. The sales commission per unit for Part A is $80. Therefore, the manufacturing margin per unit equals $800 - $520 - $80 which is $200. When you multiply this margin per unit by the total units sold which is 5,000 units, we get the total manufacturing margin. Hence, the manufacturing margin for Part A is $200 * 5,000 =
$1,000,000
.
Learn more about Manufacturing Margin here:
#SPJ2
Answers
Answer: availability of information and increased interaction throughout the organization
Explanation: An enterprise systems is described as an integrated suite of business applications for virtually every department, process, and industry, that allows companies and organizations to integrate information across operations on a company-wide basis by the use of one large database and as a result, there is an upward increase in the availability of information which leads to increased interaction across departments, processes, and industries throughout the organization.