Compared to sole proprietorships and partnerships, corporations are more attractive to investors and have less liability. In comparison to sole proprietorships and partnerships, corporations pay less in taxes and require fewer paperwork.
What is the definition of a corporation and what does it do?A type of legal body known as a corporation was established with the intention of making money by investors, stockholders, or other unrelated individuals. Corporations have legal authority to enter into agreements, file lawsuits and defend themselves in court, own property, pay federal and state taxes, and borrow money from financial institutions.
A corporation's meaning?An organisation called a corporation is one whose shareholders choose a board members to manage its operations. The stockholders are not responsible for the corporation's conduct or financial condition.
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a company has a degree of financial leverage of 1.25 and ebit of $1,000,000. if net income before interest and tax rises 4%, earnings to the stockholder will rise:
The rise in the earnings to the stockholder, given the increase in income before interest and tax would be 5 %
How to find the rise in earnings to stockholders ?The rise in earnings to stock holders would be the rise in the Earnings per share or the EPS.
This amount can be found by using the formula for the Degree of Financial leverage which is :
Degree of financial leverage = Percentage change in EPS / Percentage change in EBIT
The percentage change in EPS is :
= Degree of financial leverage x Percentage change in EBIT
= 1. 25 x 4%
= 5 %
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an analyst believes that a stocks return depends on the state of the economy for which she has estimated the following probabilities: according to the analyst's estimates, the expected return oof the stock is?
An analyst has calculated the following probabilities because she thinks the health of the economy affects how much money a stock will return: According to the analyst's estimates, the expected return of the stock is 14%.
What is return on stock investment?By dividing the investment's profit by its cost, the return on investment is determined.ROI is determined by deducting the investment's original cost from its end value, dividing the result by the investment's cost, and then multiplying the result by 100.Companies pay out dividends to shareholders in the form of a quarterly payment for each share they own. The investors receive a stream of revenue as a result. You must own firm shares prior to the ex-dividend date in order to collect the dividend.When ROI computations result in a positive number, net returns are positive. However, when ROI calculations provide a negative number, it indicates that overall costs have outweighed total returns, resulting in a negative net return.To learn more about return of stock refer :
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lumpkin company sells lamps and other lighting fixtures. the purchasing department manager prepared the following inventory purchases budget. lumpkin’s policy is to maintain an ending inventory balance equal to 10 percent of the following month’s cost of goods sold. april’s budgeted cost of goods sold is $40,000.
Lights and some other lighting systems are available from Lumpkin Corporation. The manager of the purchasing department created the following inventory purchase budget of $35,500.
How are inventories determined?
Inventory refers to the entire collection of goods, materials, products, and commodities that a company has on hand and plans to resell to customers at a profit. Only the newspaper itself will be considered inventory if the vendor drives a vehicle to distribute newspapers to customers. The vehicle will be handled like a priceless asset.
What does an office inventory entail?
The products or supplies that a company plans to sell to customers at a profit are known as inventory. The process of inventory control involves tracking inventory from producers to warehouses and from these locations to a point of purchase. It serves as a crucial supply chain connection.
Briefing:
February.
Desired ending inventory = 10% of March Cost of goods(COGS):
= 10% * 35,000
= $3,500
Inventory needed = COGS + ending inventory
= 32,000 + 3,500
= $35,500
Beginning inventory = January ending inventory = $3,200
Required Purchases = Inventory needed - Beginning inventory
= 35,500 - 3,200
= $32,300
March
Desired ending inventory = 10% of April COGS:
= 10% * 40,000
= $4,000
Inventory needed:
= 35,000 + 4,000
= $39,000
Beginning inventory = February ending inventory = $3,500
Required purchases:
= 39,000 - 3,500
= $35,500
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The model that precisely specifies the relationship between the nominal rate and the real rate is : R= the real nominal rate; r= the real rate; h= the rate of inflation
The version that exactly specifies the connection among the nominal fee and the actual fee is : R= the actual nominal fee; r= the actual fee; h= the fee of inflation
(1 + R ) = (1 + r) x (1+h)
The required details for nominal rate in given paragraph
Nominal hobby fee refers back to the hobby fee earlier than taking inflation into account. Nominal also can discuss with the marketed or said hobby fee on a loan, with out deliberating any prices or compounding of hobby. Nominal hobby fee refers back to the hobby fee earlier than taking inflation into account. The federal budget fee, the hobby fee set via way of means of the Federal Reserve, is the short-time period nominal hobby fee this is the premise for different hobby costs charged via way of means of banks and economic institutions. To keep away from shopping strength erosion via inflation, traders remember the actual hobby fee, in preference to the nominal hobby fee.
APY (annual percent yield) is the powerful hobby fee which has a tendency to be extra applicable to debtors and creditors than the nominal, or said, hobby fee.
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When does a decrease in supply raise the price more: When demand is elastic or when demand is inelastic? When
OPEC decreases the supply of oil, the price of gasoline skyrockets. Hence is the demand for gasoline elastic or inelastic?
In general, the regulation of deliver and call for states that the charge of any item will increase if call for for it increases or the deliver for it decreases.
The required details for law of supply and demand in given paragraph
The regulation of deliver and call for combines essential monetary ideas describing how adjustments within side the charge of a useful resource, commodity, or product have an effect on its deliver and call for. As the charge increases, deliver rises even as call for declines. Conversely, because the charge drops deliver constricts even as call for grows. Levels of deliver and call for for various expenses may be plotted on a graph as curves. The intersection of those curves marks the equilibrium, or market-clearing charge at which call for equals deliver, and represents the procedure of charge discovery within side the marketplace. The regulation of call for holds that the call for stage for a product or a useful resource will decline as its charge rises, and upward thrust because the charge drops. Conversely, the regulation of deliver says better expenses enhance deliver of an monetary excellent even as decrease ones have a tendency to decrease it. A market-clearing charge balances deliver and call for, and may be graphically represented because the intersection of the deliver and call for curves.
The diploma to which adjustments in charge translate into adjustments in call for and deliver is referred to as the product's charge elasticity. Demand for simple requirements is distinctly inelastic, which means it's far much less conscious of adjustments of their charge.
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according to the viewpoint of lease capitalization supported by the fasb, why should a 10-year lease agreement be handled in the same manner as a 10-year installment purchase?
Both transactions are similar in that the right to use the property is an asset.
Why did FASB feel it was necessary to issue a standard on lease accounting?
By putting leases on the balance sheet and disclosing more details about leasing agreements, the new standard was created by FASB to improve transparency and comparability between companies and allow users to evaluate the amount, timing, and uncertainty of lease-related cash flows.The lessor establishes an asset account for the leased item when a lease is capitalized, and the asset value on the balance sheet is equal to the lesser of the fair market value or the present value of the lease payments.Operating leases must be treated as equal and balancing amounts of assets and liabilities when accounting for them. Although the amount of equity will remain unchanged, this will have a big impact on the debt to equity ratio. The present value of the future release payments will be the sum that needs to be reported.To learn more about FASB refer,
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n which stage of the data life cycle does a business decide what kind of data it needs, how the data will be managed, and who will be responsible for it? 1 point
The manage stage of the data life cycle does a business decide what kind of data it needs, how the data will be managed, and who will be responsible for it.
What is the data life cycle ?The data life cycle can be described as the sequence of stages that a particular unit of data goes through from its initial generation or capture to its eventual archival which includes the deletion at the end of its useful life.
It should be noted that at this stage this could includes the specification as well as the data management experts which identify six or more stages in the data life cycle.
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you present to your stakeholders, and they express concern about how your results compare to previous results. which kind of objection are they making?
When a stakeholder is involved about the outcomes of your analysis, they are making an objection about your findings. This is when any individual objects to problems or inconsistencies in your remaining results.
What is an argumentative objection?Argumentative objections are regularly made when the questions directed to the witness attempt to affect the witness' testimony through inserting the attorney's (or self-represented party's) interpretation of the proof into the question.
What are the two kinds of objection?Objections genuinely fall into two categories. There's sort of the precise no, I don't want to purchase it. I do not like your product. Or there may be the kind of delayed no, which is coming in the shape of things like I choose to think about it or I favor to communicate to any person else.
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https://brainly.com/question/29649678#SPJ4how should the $2.3 million be allocated to each of the loan/investment alternatives to maximize total annual return?
Answer:
-automobile loans = 9
-furniture loans = 11
other secured loans = 12
signature loans = 13
risk free security's = 10
explanation : seek and you shall find
if you need $1,500 to make a down payment on a car next year and interest rates are 6%, the amount of money you need to deposit into the bank this year is
The amount of money you need to deposit into bank this year is $1590.
What is a bank?A bank is a sort of financial institution that grants loans, creates demand deposits from deposits from the general public, and accepts deposits from the public. The bank has both direct and indirect lending activities available through capital markets. Due to their importance to a country's economy and financial stability, banks are subject to strict regulation in the majority of nations. Most countries have institutionalized a practice known as fractional reserve banking, in which banks hold liquid assets that are only a portion of their current liabilities. In addition to other laws aimed at guaranteeing liquidity, banks are often required to maintain a specific level of capital based on the Basel Accords, an international set of capital norms.
Amount of money= 1500*106%= $1590
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Answer:
1415.09$ 1415.09*10.6=1500
Explanation:
which type of security guarantees preferred stockholders payment of missed dividends before any dividends are paid to common stockholders?
A type of preferred stock known as a "guaranteed stock" is issued by a company whose dividends are guaranteed by one or more other businesses or banks.
The guarantors are obligated to distribute dividends to stockholders if the issuer of guaranteed stock defaults.
What exactly are assured dividends?
A dividend that a company is required to pay out on its preferred stock is known as a "guaranteed dividend." Since guaranteed dividends are typically cumulative, a company cannot pay dividends on common stock until preferred stockholders are satisfied in full if it misses a payment.
How can I acquire 1,000 dividends per month?
You would need to make an initial investment of $600,000 in a market with a yield of 2% to consistently receive dividend payments of $12,000 per year (or $1,000 per month).
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a method of forecasting that best describes the flows from one sector of the economy to another is called
An input-output model is a forecasting tool that best describes the flows from one sector of the economy to another. Hence, the correct answer is an input-output model.
In operations management, what is an input-output model?An input-output model is a quantitative economic model that depicts the interdependence of several sectors of a national or regional economy. Wassily Leontief (1906-1999) is credited with establishing this style of analysis, for which he received the Nobel Prize in Economics. The open input-output model is used when only generated inputs enter the input-output matrix. The core equation of the open model is the material balance, x = Ax + y, where x is the vector of gross outputs, Ax is the vector of intermediate goods, and y is the vector of net outcomes.
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An international treaty banning the import of diamonds is most likely to hurt the country of?
By implementing tariffs and import restrictions, governments reduce excessive import activity.
How does an import appear?An import is any product that is produced overseas and brought into another country. For instance, from an American perspective, if a Belgian company manufactures chocolate and distributes it in the US, it would be regarded as an import.
What is the importation process?Normally, the process for export and import entails making sure that licensing and compliance are in place just before shipping of goods, making plans for transport and storage after the goods have been unloaded, and obtaining customs as well as paying taxes even before goods are released.
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What term BEST describes the use of persuasive language and strategies designed to convince potential customers to purchase a product or, at the very least, feel goodwill
toward a company or brand?
A. factual skills
O B. transferrable skills
O c. persuasive skills
O D. ethical skills
Reset
Next
Persuasive rhetorical word BEST refers to the use of persuasion to persuade potential customers to buy a product or, at the absolute least, to feel goodwill toward a business or brand.
What does persuasive rhetoric entail?Grammar and Rhetorical Terms Glossary A speaker or reader is persuaded to believe or act a certain way through the use of arguments, values, appeals to beliefs, and appeals to emotions.
Which of these 3 sorts of rhetoric are they?According to Aristotle, the success of a speaker in persuading an audience depends on how well that speaker connects with that audience on three different levels: logos, pathos, and pathos. When taken as a whole, these appeals make up what later orators have referred to as the rhetorical triangle.
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increasing open space on a project helps which of the following green building goals? question 87 options: a) reducing the heat island effect b) reducing the storm water quality c) increasing native plantings d) increasing the building's water efficiency
Reducing the quality of storm water is one of following green construction objectives, according to the question.
Why is it crucial for a firm to save costs?The amount of money the firm has accessible grows when expenditures are decreased. Increased earnings and dividend payments to shareholders can result directly from this, or capital investment may be freed up to support business development or growth.
What do you mean by reducing?Any operation (such as the incorporation of hydrogen or the removal of oxygen) that adds electrons to with an atom or an ion is always followed by the oxidizing of the reduced substance. substitute: decrease. chemical, or reactional, in nature.
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john deere relies on hundreds of vendors to produce component parts for its farm equipment. this illustrates which secret of small business success?
This illustrates the secret of a small business success as A symbiotic relationship exists between small and large businesses.
Small enterprises, such as companies, partnerships, or sole proprietorships, are businesses that have fewer employees and/or lower yearly revenue than businesses of a typical size. These types of businesses need four key elements to be successful: a product, a market, money, and people.
Additionally, experience and education are also essential for success, as one needs to understand their product but cannot solely rely on expertise. The four primary types of business entities for small enterprises are the LLC, the corporation, the partnership, and the sole proprietorship. With the right combination of these elements, small enterprises can become successful.
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which of the following gift transactions requires the filing of a gift tax return? a man pays $100,000 directly to a hospital to pay the medical expenses of his best friend. a husband gives his wife a house with a fair market value of $3 million. an uncle gives his niece $5,000 in cash. a father gives his son $16,000 in cash and his spouse agrees to gift splitting.
The following gift transactions requires the filing of a gift tax return is :
A father gives his son $16,000 in cash and his spouse agrees to gift splitting.
What is meant by tax return ?A tax return is one or more forms submitted to a taxing body that include earnings, outlays, and other crucial tax data. Tax returns give taxpayers the option to determine their tax liability, plan out their tax payments, can request reimbursements for any additional taxes they paid that weren't necessary.
Since the government is the one that prints the money, returning some of it to the issuer by paying taxes is the same as returning the money.
Although they are not the same thing, tax refunds and tax returns are connected. For instance, your tax refund may increase depending on the credits and deductions you claim. Additionally, if you need to get your anticipated refund quickly, filing online and well in advance of the due date will help.
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discuss why football scholarships might represent a lower cost to a college athletic program than is typically reported by official budgets?
Many student-athletes come from low-income families or, in some cases, no family at all. A sports scholarship might spell the difference between success and homelessness for some. The economic gap is difficult to confront, and academic and sports programs prioritize supporting younger generations with equalization.
football scholarshipsA football scholarship (soccer) allows individuals to play football in the United States while also pursuing an internationally recognized university degree. A soccer scholarship can assist establish a foundation for future success whether you want to pursue a career in soccer or another sector of expertise.
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a measurement of how much a person or household owns once all debts have been paid.
Wealth, A measurement of how much a person or household owns once all debts have been paid.
What is the measure of wealth?
The most widely used indicator of wealth is net worth, which is calculated by adding up the market values of all of an individual’s tangible and intangible possessions, then deducting any debts.
What are the three types of wealth?
Personal property, such as homes or cars, financial savings, such as the accumulation of prior income, and capital wealth, which consists of income-producing assets like real estate, stocks, bonds, and enterprises,are the three main categories into which wealth can be divided.
Is GDP the measure of wealth?
GDP is in no way a measure of “wealth.” It serves as a gauge of revenue. It is a “flow” measure that looks backwards and gives you the value of the goods and services generated during a specific time period. It doesn’t tell you whether you can produce the same volume again the next year.
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A firm's budgeted sales for the month of September is 10,000 units, for the month of October is 12,000 units, and for the month of November is 14,000 units. The budgeted ending inventory must equal 25 percent of the next month's sales. Based on the given information, the production budget for the month of October is _____ units.
Based at the given statistics, the manufacturing price range for the month of October is 12500 devices.
The required details for production budget in given paragraph
The manufacturing price range calculates the wide variety of devices of merchandise that should be manufactured, and comes from a aggregate of the income forecast and the deliberate quantity of completed items stock to have on hand (typically as protection inventory to cowl for sudden will increase in demand). The manufacturing price range is usually organized for a "push" production system, as is utilized in a cloth necessities making plans environment. The manufacturing price range is usually supplied in both a month-to-month or quarterly format. The fundamental calculation utilized by the manufacturing price range is:
+ Forecasted unit income
+ Planned completed items finishing stock balance
= Total manufacturing required
- Beginning completed items stock
= Products to be manufactured
It may be very hard to create a complete manufacturing price range that carries a forecast for each version on a product that a corporation sells, so it's far normal to mixture the forecast statistics into extensive classes of merchandise which have comparable characteristics.
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stacked bars and 100% stacked bars - what is the difference? which is a good replacement for a pie chart?
Stacked bar displays the sum while also giving an indication of how the sum for each category value is broken down into parts. 100% stacked bars drawn by the proportion of each value to the sum of the values in each group represent the percentage-of-the-whole of each group.
What distinguishes a 100% stacked bar chart from a typical stacked bar chart?The values of the components are expressed as percentages of the total bar in the 100% stacked bar chart, which is different from the standard stacked bar chart. In this manner, rather than the actual values, the distinctions between the components are more readily apparent. A stacked bar is frequently a better option for comparing one share measure to another or when studying share change over time because it is difficult to compare one pie chart to another. When you need to demonstrate how stock prices have changed over time, this is a typical illustration. The lengths of 100% stacked bars never change, unlike typical stacked bars, because they always total 100%.
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the primary purpose of relationship-oriented leadership behavior is to ensure that people, equipment, and other resources are used in an efficient way to accomplish the mission of a group or organization. t or f
The given statement ''the primary purpose of relationship-oriented leadership behavior is to ensure that people, equipment'' is false.
What is relationship oriented leadership?Relationship-oriented leadership, sometimes referred to as people-oriented leadership, is concerned with fostering and energizing connections within teams or work groups. Relationship-focused leaders place a high priority on fostering a positive work environment, a cohesive team, and the happiness of both the individual and group members.An approach to classifying leadership philosophies is by considering the worth of each person. When delegating work, the manager adopts a relationship-based leadership style by considering the abilities, traits, and objectives of each employee.Successful leaders engage in four main relationship-focused behaviours. These actions serve to encourage, advance, acknowledge, and communicate with others (Yukl, 2006). (Derue, 2011).Learn more about relationship oriented leadership refer to :
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The process of allocating the cost of a natural resource to a period when it is consumed requires a debit entry to the account.
a. True
b. False
The statement given is true that The process of allocating the cost of a natural resource to a period when it is consumed requires a debit entry to the depletion expense account.
Is accumulated depletion an expense account?
The amount of depletion expense that has accumulated over time in connection to the utilization of a natural resource is known as accumulated depletion. On the balance sheet, this sum is listed as a counter account alongside the asset representing the natural resource.
What account is depletion expense?
An expense for depleting natural resources is deducted from profits. In the mining, forestry, and oil and gas industries, where exploration and development costs are capitalized, depletion is most frequently utilized as a rational method for allocating these costs to expenses.
Is depletion expense a contra asset account?
Depreciation expense is recorded as a non-cash expense on the income statement, which lowers the company’s net profits. The balance sheet’s counter asset account records accumulated depreciation, which lowers the reported gross value of fixed assets.
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I understand that the question you are looking for is:
The process of allocating the cost of a natural resource to a period when it is consumed requires a debit entry to the depletion expense account.
True
False
what sets the ceiking for product prices break even volume variable costs customer perceptions of the products
Customer's perception of product value sets the ceiling for product prices.
Customer's perception of product value is an important factor in determining whether or not a purchase is made. If a customer perceives a product to be of high value, they are more likely to make a purchase. On the other hand, if a customer perceives a product to be of low value, they are less likely to make a purchase.
There are a number of factors that can influence a customer's perception of value, including the price of the product, the quality of the product, and the customer's personal preferences.
Hence, the correct option is "D".
The question is incomplete, the complete question is:
What sets the ceiling for product prices?
A. Variable costs
B. Sellers' perceptions of the product's value
C. Break-even volume
D. Customer's perception of product value
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what event caused the us to shift its focus from foreign expansion and markets to domestic affairs by the 1860s?
The Civil War and Reconstruction aused the us to shift its focus from foreign expansion and markets to domestic affairs by the 1860s.
Reconstruction is the time period (1865–1877) that followed the American Civil War, during which efforts were made to address the injustices of slavery and its political, social, and economic legacies as well as to find solutions to the issues brought on by the readmission to the Union of the 11 states that had seceded at or before the war's outbreak. Reconstruction was once widely perceived by historians as a period when vengeful Radical Republicans imposed Black supremacy on the victorious Confederacy, but since the late 20th century, this perception has changed to one that more favourably portrays it as a laudable example of interracial democracy. America's political landscape underwent significant shifts during reconstruction.
The federal government's structure and the meaning of citizenship in America were permanently transformed at the national level by new laws and constitutional amendments. The Republican Party came to power in the South with the help of a politically active Black population and white supporters, which led to a redefining of the roles of government.
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a product that is in the mature stage of the product life cycle has reached a plateau in sales with many competitors existing in the marketplace. an example of this would be:
A product that is in the mature stage of the product life cycle has reached a plateau in sales with many competitors existing in the marketplace. an example of this would be: Digital camera
What is the product life cycle?
Generally, One example of a product that is in the mature stage of the product life cycle and has reached a plateau in sales with many competitors in the marketplace is the personal computer.
Personal computers have been around for several decades and have become a common household item.
There are many different brands and models of personal computers available, and the market for personal computers has become saturated. As a result, sales of personal computers have leveled off and are not likely to experience significant growth in the future.
Other examples of products that may be in the mature stage of the product life cycle and have reached a plateau in sales with many competitors in the marketplace include traditional landline telephones, televisions, and appliances such as refrigerators and washing machines.
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1. working with numbers and graphs q1 suppose that, at a price index of 154, the quantity demanded of u.s. real gdp is $10.0 trillion worth of goods. true or false: this scenario refers to aggregate demand because aggregate demand is the quantity demanded of all goods and services at different price levels. true false
Amounts of Real GDP are demanded at various price levels, and this is referred to as aggregate demand. There is no exact monetary value for aggregate demand. A timetable that displays the Real GDP that consumers are willing to purchase at various price points is provided.
The Given statement is False.
What Is Aggregate Demand?In macroeconomics, the word "aggregate demand" is used to define the entire demand for locally produced commodities, including capital goods, consumer goods, and services. The total includes everything that is bought by individuals, businesses, the government, and foreign customers (via exports), minus the portion of demand that is met by imports from foreign manufacturers. This is frequently represented as C + I + G + (X-M), where C represents individual consumption expenditures, I represents investment, G represents government purchases of goods and services, X represents exports, and M represents imports. GDP, or gross domestic product, is comprised entirely of these items.The amount of total demand is determined by what factors? Keynesians hold a single viewpoint. Different viewpoints exist among monetarists. Also called as IS-LM, this synthesis of the two viewpoints exists.To Learn more About aggregate demand refer To:
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The Black Limo Company (BLC) purchased a limo on January 1 of Year 1. The limo cost $48,000. It had an expected useful life of 4 years and a $8,000 salvage value. Assuming BLC uses straight-line depreciation, depreciation expense for Year 1 is $_____.
Assuming BLC uses straight-line depreciation, depreciation expense for Year 1 is $ 10000.
Depreciation is an accounting technique for spreading out the expense of a tangible item over the course of its useful life. How much of an asset's value has been used is shown through depreciation.
Annual depreciation price as in keeping with immediately line method=100/4
=25%/year
Hence depreciation as in keeping with double decline=2*Annual depreciation price as in keeping with immediately line method*Beginning cost of every period
Year Beginning value Depreciation Ending value
1 48000 (2*25%*48000)=24000 (4800024000)=24000
2 24000 (2*25%*24000)=12000
Total accumulated depreciation = $36000
It enables businesses to purchase assets over a predetermined length of time and generate income from those assets. Depreciation is a phrase used in accounting to describe two different elements of the same idea: first, the real decline in fair value of an item. Depreciation rate (SLM) is calculated using the following formula: (100 -% of purchase price at sale)/Useful life in years. Depreciation is calculated as (Purchase Price - Salvage Value)/Useful Life or as Purchase Price * Depreciation Rate.
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If you were selling innovating lawn chairs that included sunshades with built in misting fans, what role would Amazon and Costco be most likely to play in your business model?
If you were selling innovating lawn chairs that included sunshades with built in misting fans then the roles here are Distribution Channels.
Explain in detail.
A distribution channel is a network of businesses or middlemen where the final consumer buys a product or service. Wholesalers, retailers, distributors, and the Internet are examples of distribution channels. The manufacturer sells directly to the customer through a direct distribution channel.Direct sales, online sales, wholesalers, and retailers are a few examples of distribution routes.Market, Product, Company, Channel, and Environment Related Factors are 5 Important Factors Affecting Distribution Channel Selection. The distribution of goods can be done through a variety of channels.To know more about Business here
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differential chemical produced 11,250 gallons of preon and 30,000 gallons of paron. joint costs incurred in producing the two products totaled $7,300. at the split-off point, preon has a market value of $8.00 per gallon and paron $2.00 per gallon. compute the portion of the joint costs to be allocated to preon if the value basis is used.
If the value basis is applied, Preon will get $4500 of the shared costs.
How to calculate portion of the joint cost?Joint costs are expenses spent when two products are purchased or produced at the same time. In terms of cost accounting.
Joint costs have the same cost object. Below is a breakdown of the combined cost for Preon allocation.
where,
Total joint cost = $7,500
Preon cost = 10,000 gallons × $6 per gallon = $60,000
And, the total cost is
= 10,000 gallons × $6 per gallon + 20,000 gallons × $2 per gallon
= $60,000 + $40,000
= $100,000
So, the allocated cost equal to
= $7,500 × ($60,000 ÷ $100,000)
= $4,500
Therefore the portion of the joint costs to be allocated to Preon if the value basis is used $4500
The complete question is : Differential Chemical produced 10,000 gallons of Preon and 20,000 gallons of Paron. Joint costs incurred in producing the two products totaled $7,500. At the split-off point, Preon has a market value of $6.00 per gallon and Paron $2.00 per gallon. Compute the portion of the joint costs to be allocated to Preon if the value basis is used. A. $2,500. B. $3,000. C. $4,500. D. $5,625. E. $1,500.
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