Answer:
E. Service entities cannot use ABC for overhead allocation.
Explanation:
ABC costing is limited to use when the cost can be directly traced to a certain activity. All of the Activities are volume driven and overheads would be incurred in small proportion to the overall cost.
Answer:
Each firm sets it price equal to its average total cost.
Explanation:
In economic theory, perfect competition is a market with a large number of sellers and buyers, producing similar products and having a small market share that does not affect prices. Let's explain the characteristics of the perfect competition :
1) manufacturers of identical products. . .
Products in the perfect competitive market are completely substitute. In other words, products and services offered by vendors do not differ from one another in terms of quality or character.. . .
2) the firm has a small market share that will not affect prices. . .
No vendor in this market has the ability to influence prices by increasing or decreasing production. Also, no buyer can reduce the supply of goods and lead to lower prices
3)Market where there are many buyers and sellers. . .
The above feature is directly related to this. Thus, if there is a seller or buyer in the market (such as monopoly or monopsony), it can easily affect the market price. However, in perfect competition, every seller and buyer must act based on market prices.
4)There is no obstacle to entering and leaving the market. . .
That is, access to the market is extremely easy and at the same time neither the state nor the old market participants have a barrier for the new participant.
5)Perfect information. . .
Every market participant knows the prices, quality and production methods.
6) Zero transaction costs...
Buyers and sellers do not bear any transaction costs (contract costs, etc.) during the purchase of goods and services. . .
7) Maximizing profits. . .
In a highly competitive market, the main purpose of firms is to maximize their profits, without any serious obstacles. In a fully competitive market, maximum profits are earned when marginal costs are equal to marginal revenue.
As you see there is information above about the easy entry and exit, the identical products and maximizing profits but nothing about the equal prices to average costs.
Answer:
$37,800.00
Explanation:
Maize Company cost structure is such that $20 out of the $35 is a variable cost and the balance of $15 is a fixed cost.
So the fixed cost will always be incurred whether or the special order is accepted.
So he relevant cost of accept the special order from the foreign wholesaler
is the relevant variable cost which is the variable cost of production and the additional print logo cost
Also remember that whether or not the order is accepted the fixed cost will still be incurred and besides Maize still has excess capacity
A relevant variable cost is the future cash cost that would be incurred as a result of producing and selling a unit of the product.
Relevant cost = $20 + $3
= $23
The increase in net income = (selling price - relevant cost)× unit sold
=( $30 - $23 ) × 5,400
$37,800.00
Answer:
Explanation:
In this scenerio we have to use compound interest formula to find the investmen amount:
FV=PV(1+i)^{n}
FV: Future Value (Ferrari price)
PV: Present Value (Investment amount)
i: interest rate (0.11) (11%)
n: time (8 years)
191,000=PV(1+0.11)^{8}⇒ 191,000=PV×2,3045377697175681
PV= $82,879.96=Investment amount
Prepare the journal entry to recognize the impairment.
Explanation:
The journal entries are as follows
On December 31,2017
Loss on impairment Dr $80,000
To Debt investment - available for sale $80,000
(Being the loss on impairment is recorded)
It is computed below:
= $800,000 - $720,000
= $80,000
On December 31, 2017
Fair value adjustment- available for sale Dr $80,000
To Unrealized holding gain or loss - equity $80,000
(Being the fair value adjustment is recorded)
Answer:
Dr Allowance for Doubtful Accounts $80,000
Cr Debt Investments 80,000
Explanation:
Impairment = Cost - Fair Value = 800,000 - 720,000 = 80,000
Companies should use the CECL model to record the impairment of debt investments similar to receivables.
In evaluating the securities, Hagar now determines that it is probable that it will not collect all amounts due. In this case, it records a debit to allowance for doubtful accounts. Hagar includes this amount in income and records the impairment as shown above.
Answer:
The corresponding percentage change in the price of the bond using the approximation method based on the bond duration is -3.24%
Explanation:
In this question, we are to calculate the corresponding percentage change in the price of the bonds using the approximation method based on the bond duration.
Mathematically, approximate change in bond price = -(Duration × Change in yield)
From the question, we identify that the duration is 18 years while the change in yield is 1.8% = 1.8/100 = 0.18
We plug this in the equation above;
The approximate change in bond price is thus; -(18 × 0.18) = -3.24%
Answer:
Also a hard skill.
Explanation:
A hard skill is something that you have to learn.