Answer:
$1454.99
Explanation:
Just did this question the other day
A project has an initial cost of $89,800, a life of 7 years, and equal annual cash inflows. The required return is 8.2 percent. According to the profitability index decision rule, what is the minimum annual cash flow necessary to accept the project?
In the context of employee engagement, it is observed that the highly engaged employees feel a deep connection to their company. Disengaged employees:
a. feel disconnected, portraying deviant behavior at the workplace.
b. put in efforts to be as good as engaged employees.
c. continue working without affecting the turnover.
d. put time but no attention into their work.
e. engage in productive activities to prove their worth.
State and explain elements of organizational structure?
Answer:
Explanation:
Organizational structure could be explained as a connected workflow through which an organization is strategically setup to operate.
Five elements create an organizational structure: job design, departmentation, delegation, span of control and chain of command
Job design : This element allows the definition of individual job role, the demands of each job position, duties, responsibilities and the key performance indicators.
Departmentation : Here, individual job roles which seems similar and have similar requirement are grouped into a certain defined category called department. Deparmentation may be ascribed based on task, job role, task force and so on.
Delegation : This involves process handling and management, each process and logical department has to be headed by a defined individual or group of persons.
Span of control : Definitions control and authority such that delegates know their limits and when to initiate their organizational power.
Chain of command : This is crucial as organizations aee arranged and operated hierarchically, the command line is defined such that it makes reporting easier.
You purchase the townhome listed above at realtor and borrow 95% of the listed price from Broadway Bank at an APR of 6% with monthly payments (your down payment is 5% of listed price). The maturity of your mortgage equals 30 years with monthly payments. a. Draw a time line that depicts the cash flows from the mortgage payments- com
Answer: Below is the complete question
You purchase a townhome for 335k and borrow 95% of the listed price from Broadway Bank at an APR of 6% with monthly payments (your down payment is 5% of listed price). The maturity of your mortgage equals 30 years with monthly payments. Draw a time line that depicts the cash flows from the mortgage payments- compute the payment and show your inputs and work.
answer:
$1,908.07 ( monthly payments ) will be made i.e. This depicts the cash flow from the mortgage payment
Explanation:
Cost of townhome = 335k
APR ( I ) = 6%
percentage of cost of townhome borrowed = 95%
Down payment of cost of townhome = 5%
maturity period = 30 years = 360 months
Determine time line that depicts cash flows
First step : calculate value of loan
value of loan = ( 95% )* (335,000) = $318,250
final step : calculate value of monthly payments
Applying TVM calculation
PMT = [PV = 318,250, FV = 0, N = 360, I = 0.06/12] ( excel function )
PMT = $1,908.07 ( monthly payments )
Padre holds 100 percent of the outstanding shares of Sonora. On January 1, 2013, Padre transferred equipment to Sonora for $112,000. The equipment had cost $147,000 originally but had a $57,000 book value and five-year remaining life at the date of transfer. Depreciation expense is computed according to the straight-line method with no salvage value.
Consolidated financial statements for 2015 currently are being prepared. What worksheet entries are needed in connection with the consolidation of this asset? Assume that the parent applies the partial equity method. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
prepare journal entry TA
Prepare entry ED
Answer:
Journal Entry TA
Date Account Titles Debit Credit
Retained Earnings $33,000
Equipment $35,000
($147,000 - $112000)
Accumulated Depreciation $68,000
[(147000-57000)+(57000/5*2)-(112000/5*2)]
Journal Entry ED
Date Account Titles Debit Credit
Accumulated Depreciation $11000
[(112000-57000)/5]
Depreciation expense $11,000
Enterprise mashup technology does not provide a mechanism to easily customize and share knowledge throughout the company.
a. True
b. False
Sandhill Inc. acquired 10% of the 420,000 shares of common stock of Schuberger Corporation at a total cost of $15 per share on June 17, 2020. On September 3, Schuberger declared and paid a $120,000 dividend. On December 31, Schuberger reported net income of $512,000 for the year. (b) Wen Corporation obtained significant influence over Hunsaker Company by buying 30% of Hunsaker’s 112,000 outstanding shares of common stock at a cost of $18 per share on January 1, 2017. On May 15, Hunsaker declared and paid a cash dividend of $112,000. On December 31, Hunsaker reported net income of $212,000 for the year.
Required:
Prepare all necessary journal entries for 2017 for (a) Edelman and (b) Wen.
Answer:Please see explantion colmn for answers
Explanation:
A) Journal entry for Edelman
Date Account Titles and explanation Debit Credit
June 17 Stock investment $630,000
Cash $630,000
Calculation
Stock Investment =420,000 x $15 x 10% = $630,000
Date Account Titles and explanation Debit Credit
Sept 3 Cash $12,000
Dividend revenue $12,000
Calculation
Dividend revenue =$120,000 x 10% =$12,000
Date Account Titles and explanation Debit Credit
Dec 31 Stock investment $51,200
Investment revenue $51,200
Calculation
Investment Revenue =(512,000 x 10%) = 51,200
B) Journal entry for Wen
Date Account Titles and explanation Debit Credit
Jan 1 Stock investment $604,800
Cash $604,800
Calculation
Stock Investment =112,000 x $18 x 30% = $604,800
Date Account Titles and explanation Debit Credit
May 15 Cash $33,600
Dividend revenue $33,600
Calculation
Dividend revenue =112,000 x 30% = $33,600
Date Account Titles and explanation Debit Credit
Dec 31 Stock investment $63,600
Investment revenue $63,600
Calculation
Stock Investment =212,000 x 30% = $63,600
Task 2: Record the listed transactions of Nikea Inc. for the first quarter (January to March) in
a journal.
a) 01-02-2015 issued capital stock: $20,000
b) 01-30-2015 paid the monthly rent: $5,000
c) 02-02-2015 purchased supplies on account: $1,500
d) 02-10-2015 paid a creditor on account: $1,000
e) 03-03-2015 earned sales commissions: $25,000
f) 03-30-2015 paid automobile expenses for the month: $4,500
g) 03-30-2015 paid office salaries: $8,000
h) 03-31-2015 determined the cost of supplies used: $1,500
i) 03-31-2015 paid cash dividends: $1,500
Answer and Explanation:
The journal entries are shown below:
a. Cash Dr $20,000
To Capital $20,000
(being the issuance of the capital stock is recorded)
b. Rent Dr $5,000
To cash $5,000
(being the rent paid is recorded)
c. Supplies dr $1,500
To Account payable $1,500
(being the supplies purchased on account is recorded)
d. Account payable Dr $1,000
To cash $1,000
(being the amount paid is recorded)
e. Cash Dr $25,000
To sales commission $25,000
(being the sales commission earned is recorded)
f. Automobile expense $4,500
To Cash $4,500
(being cash paid is recorded)
g. Office salaries Dr $8,000
To cash $8,000
(being cash paid is recorded)
h Supplies expense $1,500
To supplies $1,500
(being supplies expense is recorded)
g. Dividend payable $1,500
To Cash $1,500
(being dividend paid is recorded)
Which medium when sending a negative employment message lets you control the message and avoid confrontation?
Face-to-face
Email
Phone
Social media
Answer:
En mi opinión personal sería cara a cara. Por qué así se puede expresar lo que uno quiere decir y en los otros no.
Explanation:
Espero ayudarte suerte
The balance in the Prepaid Insurance account after the adjusting entries have been recorded represents the: A. cost of the insurance expired during the period B. value of the insurance prepayment that remains to benefit future periods C. cash paid for insurance of current and future periods D. amount owed for insurance at the end of the accounting period
Answer:
B.value of insurance prepayed
Problems and Applications Q6 The price of coffee fell sharply last month, while the quantity sold remained the same. Five people suggest various explanations: Sean: Demand decreased, but it was perfectly inelastic. Yvette: Demand decreased, but supply was perfectly inelastic. Bob: Demand decreased, but supply increased at the same time. Cho: Supply increased, but demand was perfectly inelastic. Eric: Supply increased, but demand was unit elastic. Who could possibly be right
Answer:
YvetteBobChoExplanation:
Yvette was right because a perfectly inelastic supply means that the supply remains the same regardless of the price. With the supply remaining the same even though prices fell, enough people still bought regardless of the decrease in price that the quantity sold remained the same.
Bob was also right because the scenario painted is similar to the above. The supply increased when demand decreased which meant that even though there were less people demanding, there was more coffee being supplied such that quantity remained the same.
Cho was also correct because a perfectly inelastic demand means that the demand does not change in response to a change in price. With coffee being perfectly inelastic, people will buy the same quantity regardless so quantity sold remained the same.
Presented below are two independent situations:
(a) Edelman Inc. acquired 10% of the 412,000 shares of common stock of Schuberger Corporation at a total cost of $12 per share on June 17, 2017. On September 3, Schuberger declared and paid a $112,000 dividend. On December 31, Schuberger reported net income of $512,000 for the year.
(b) Wen Corporation obtained significant influence over Hunsaker Company by buying 30% of Hunsaker’s 112,000 outstanding shares of common stock at a cost of $18 per share on January 1, 2017. On May 15, Hunsaker declared and paid a cash dividend of $112,000. On December 31, Hunsaker reported net income of $212,000 for the year.
Prepare all necessary journal entries for 2017 for (a) Edelman and (b) Wen.
Answer:
a. Date Accounts title Debit ($) Credit ($)
June 17 Stock investment 494,400
(412,000*$12*10%)
Cash 494,400
Sept.3 Cash 11,200
($112,000*10%)
Dividend revenue 11,200
Dec. 31 Stock investments 51,200
($512,000*10%)
Investment revenue 51,200
b. Date Account title Debit ($) Credit ($)
Jan.1 Stock Investment 604,800
(112,000*$18*30%)
Cash 604,800
May 15 Cash 33,600
($112,000*30%)
Stock Investment 33,600
Dec. 31 Stock investments 63,600
($212,000 *30%)
Investment revenue 63,600
Morrison Company manufactures two products: digital cameras and video cameras. The company uses an activity-based costing system. The annual production and sales volume of digital cameras is 10,000 units and of video cameras is 8,000 units. Direct costs for the digital cameras are $122; for the video cameras, direct costs are $153.
For overhead costs, there are three activity cost pools with the following expected activities and estimated total costs:
Activity Cost Pool Estimated Cost Expected Activity Digital Cameras Expected Activity Video Cameras Total
Activity 1$30,000 100 500 600
Activity 2 $45,000 600 300 900
Activity 3 $96,600 400 2,000 2,400
Refer to Morrison Company. Using ABC, the total cost per digital camera is approximately:
Please show calculations!
Answer:
"$127.11 per unit" is the correct approach.
Explanation:
The activity cost as per the questions will be:
Activity 1:
= [tex]\frac{30,000}{600}[/tex]
= [tex]50[/tex] ($)
Activity 2:
= [tex]\frac{45000}{900}[/tex]
= [tex]50[/tex] ($)
Activity 3:
= [tex]\frac{96600}{2400}[/tex]
= [tex]40.25[/tex] ($)
Now,
The overhead cost for digital cameras will be:
= [tex](50\times 100)+(50\times 600)+(40.25\times 400)[/tex]
= [tex]5000+30000+16.100[/tex]
= [tex]51100[/tex] ($)
Per unit overhead cost will be:
= [tex]\frac{51100}{10000}[/tex]
= [tex]5.11[/tex] ($)
hence,
The total cost will be:
= [tex]Direct \ costs+Indirect \ costs[/tex]
= [tex]122+5.11[/tex]
= [tex]127.11 \ per \ unit[/tex] ($)
identify the leadership style that Jack should apply in each statement below.
Answer:
1.3.1 Charismatic leadership style
1.3.2 Transactional leadership style
1.3.3 Democratic leadership style
1.3.4 Laissez-faire leadership style
1.3.5 Autocratic leadership style
Triptych Food Corp. Income Statement For the Year Ending on December 31 (Millions of dollars) Year 2 Year 1 Net Sales 6,350 5,000 Operating costs except depreciation and amortization 1,120 1,040 Depreciation and amortization 318 200 Total Operating Costs 1,438 1,240 Operating Income (or EBIT) 4,912 3,760 Less: Interest 663 489 Earnings before taxes (EBT) 4,249 3,271 Less: Taxes (25%) 1,062 818 Net Income 3,187 2,453 Calculate the profitability ratios of Triptych Food Corp. in the following table. Convert all calculations to a percentage rounded to two decimal places.
Question Completion:
The following shows Triptych Food Corp.'s income statement for the last two years. The company had assets of $10,575 million in the first year and $16,916 million in the second year. Common equity was equal to $5,625 million in the first year, 100% of earnings were paid out as dividends in the first year, and the firm did not issue new shares in the second year.
Answer:
Triptych Food Corp.
The profitability ratios of Triptych Food Corp.
Year 2 Year 1
Net profit margin 50.19% 49.06%
Return on total assets 18.84% 23.20%
Return on common equity 36.17% 43.61%
Basic earning power 29.04% 35.56%
Explanation:
a) Data and Calculations:
Income Statement For the Year Ending on December 31 (Millions of dollars) Year 2 Year 1
Net Sales $6,350 $5,000
Operating costs except
depreciation and amortization 1,120 1,040
Depreciation and amortization 318 200
Total Operating Costs 1,438 1,240
Operating Income (or EBIT) 4,912 3,760
Less: Interest 663 489
Earnings before taxes (EBT) 4,249 3,271
Less: Taxes (25%) 1,062 818
Net Income $3,187 $2,453
Total assets $16,916 $10,575
Common equity $8,812 $5,625
Profitability ratios and formulas:
Net profit margin = Net Income/Sales * 100
Return on total assets = Net Income/Total assets * 100
Return on common equity = Net Income/Common Equity * 100
Basic earning power = EBIT/Total assets * 100
Year 2 Year 1
Net profit margin 50.19% 49.06%
= ($3,187/$6,350 * 100) ($2,453/$5,000 * 100)
Return on total assets 18.84% 23.20%
= ($3,187/$16,916 * 100) ($2,453/$10,575 * 100)
Return on common equity 36.17% 43.61%
= ($3,187/$8,812 * 100) ($2,453/$5,625 * 100)
Basic earning power 29.04% 35.56%
= ($4,912/$16,916 * 100) ($3,760/$10,575 * 100)
Which of the following key factors, based on the case study, contributed to Euro Disney’s disappointing performance during its first year of operation? Group of answer choices lack of sufficient budget for marketing and promotional activities not enough training for personnel bad weather in the summer months SRC and a lack of understanding of the target market
Answer:
Lack of understanding of the target market.
Explanation:
Euro Disney's was not able to perform according their set targets. In the first year the performance of the Euro Disney was very poor because there was lack of understanding of target market, cultural issues between the two nations and their business approaches were completely different from each other.
Bedard Corporation reported net income of $445,050 in 2020 and had 198,000 shares of common stock outstanding throughout the year. Also outstanding all year were 45,000 options to purchase common stock at $12 per share. The average market price of the stock during the year was $15.
Required:
Compute diluted earnings per share.
Answer:
$2.35
Explanation:
Convertible option = Total options available - [Total options available*Purchase price per share / Average market price per share]
Convertible option = 45,000 - [45,000*12/15]
Convertible option = 45,000 - 36,000
Convertible option = 9,000 shares
Weighted average number of shares = Common stock outstanding - Convertible option
Weighted average number of shares = 198,000 - 9,000
Weighted average number of shares = 189,000
Diluted earnings per share = Net income attributable to common stockholders / Weighted average number of shares
Diluted earnings per share = $445,050 / 189,000 shares
Diluted earnings per share = $2.354761905
Diluted earnings per share = $2.35
At the fourth and final resource, one operator handles the product. No quality problems exist at this step and the processing time is 12 minutes per unit. For every unit of demand, how many units have to flow through the second step in the process
Answer:
2.25 units.
Explanation:
Processing time is 5 minutes per unit for step 1. The total capacity is 60 minutes then no. of units produced can be;
60 / 5 = 12 units per hour.
For second step processing time is 4 minutes per unit. There is 0.85 unit of product is scrapped. Then no. of units produced per hour can be ;
60 / 4 = 15 units per hour.
After scrap the net product units per hour will be;
15 units * [1 - 0.85] = 2.25 units per hour.
Best Buy might use all of the methods of change listed below. Which of these includes inputs, strategic plans, target elements of change, and outputs?
Answer:
E)Systems model of change
Explanation:
These are the options for the question
A)Organizational structure plan
B) social factors method
C) Organizational arrangements
D)Three stage model of planned change
E)Systems model of change
Best Buy are known with selling of consumer electronics as well as a variety of related merchandise.
Systems model of change can be regarded as a model that focus on big picture perspective of change. The model is base on interaction that exist among the key components of change.
The Systems Model of Change can also known as Organization-Wide Change which focus on the fact that there must be implementation of a change organization-wide and not a implementation in piecemeal
Main components that made up of systems model of change are;
✓target elements of change
✓inputs
✓ strategic plans
✓outputs
If Fees Earned has been credited, it is most likely that:
A. a correcting entry for the overstatement of revenue was recorded. B. a customer paid in advance
C. services were provided.
D. the owner made an investment.
Answer:
C. services were provided.
Explanation:
If Fees Earned has been credited, it is most likely that: "services were provided."
For fees to be earned it means something must have been done in exchange for the fee. Considering this is a business-related issue, then it is correct to conclude that "If Fees Earned has been credited, it is most likely that: services were provided."
Option A is not correct because the overstatement of revenue is not related to the fee warmed being credited.
Option B is not correct, because a payment made in advance does not correlate to a fee earned. Option D is not correct as well, because an investment has nothing to do with a few earned.
Edison's Lights makes light bulbs. The company is currently producing well below its full capacity. Lamp Land has approached Edison's Lights with an offer to buy 20,000 light bulbs at $0.75 each. Edison;s Lights sells its light bulbs wholesale for $0.85 each; the average cost per unit is $0.83, of which $0.12 is fixed costs. If Edison's Lights were to accept Lamp Land's offer, what would be the increase in Edison's Lights' operating profits?
Answer:
the increase in Edison's Lights' operating profits would be $400
Explanation:
Analysis of the effects of Accepting Lamp Land's offer
Sales (20,000 x $0.75) $15,000
Less Incremental Costs :
Variable Cost (20,000 x $0.73) ($14,600)
Operating Profit $400
thus
If Edison's Lights were to accept Lamp Land's offer, the increase in Edison's Lights' operating profits would be $400
Based on the various costs to make the light bulb, Edison's lights would see an increase in operating profits of $800.
How would Edison's Lights see this profit?The fixed costs would be the same throughout production so should be deducted:
= Average cost - fixed cost
= 0.83 - 0.12
= $0.71
The variable cost of making the bulb is $0.71 which means that the profit made on every bulb if sold at $0.75 would be:
= 0.75 - 0.71
= $0.04
The total profit would be:
= 20,000 bulbs x 0.04
= $800
Find out more on operating profits at https://brainly.com/question/14366117.
why do we send emails?
Answer:
to communicate at hyper speed so the one being emailed to can know or execute the order for a cause
or so that companies can send free ads into your cumputer:(
Explanation:
Identify whether or not each of the following scenarios describes a competitive market, along with the correct explanation of why or why not.
a. In a small town, there are two providers of broadband Internet access: a cable company and the phone company. The Internet access offered by both providers is of the same speed.
b. The government has granted a patent to a pharmaceutical company for an experimental AIDS drug. That company is the only firm permitted to sell the drug.
c. Dozens of companies produce plain white socks. Consumers regard plain white socks as identical and don't care who manufactures their socks.
d. In a major metropolitan area, one chain of coffee shops has gained a large market share because customers feel its coffee tastes better than that of its competitors.
Answer:
1. not a competitive market
2. not a competitive market
3. competitive market
4. not a perfectly competitive market
Explanation:
To answer this question, i will first start by explaining what a competitive market is and the assumption of a perfectly competitive market as well
A competitive market is a market that has many producers and buyers of a particular product. The producers are usually in a competition to meet up with the needs of the buyers.
some assumptions of the market:
large sellers/producersidentical or homogenous goodsfree entryno discriminationperfect knowledgea. in this question this is not a competitive market. the reason is simple. It says that there are only two providers of internet. So there are no enough producers or sellers
b. The government has limited entry into this market by giving patent to only one pharmaceutical company.
c. yes this market is competitive since there are many producers of the product and the consumers regard the products as identical or homogenous. this meets with all of the assumptions of a perfectly competitive market.
d. the product here is not homogenous or identical as this is not a perfectly competitive market since buyers would prefer to buy the coffee that tastes better and leave that of the competitors
thank!
Your goal is to have $10,000 in your bank account by the end of twelve years. If the interest rate remains constant at 9% and you want to make annual identical deposits, what amount will you have to deposit into your account at the end of each year to reach your goal
Answer:
Annual deposit= $496.51
Explanation:
Giving the following information:
Future value (FV)= $10,000
Interest rate (i)= 9%
Number of periods (n)= 12 years
To calculate the annual deposit, we need to use the following formula:
FV= {A*[(1+i)^n-1]}/i
A= annual deposit
Isolating A:
A= (FV*i)/{[(1+i)^n]-1}
A= (10,000*0.09) / [(1.09^12) - 1]
A= $496.51
When 30-year-old Lindsay was in a coma for 3 months, her friend Corey had the legal authority to handle her personal, financial, and medical affairs. Why did Corey have the legal right to do this? A. Corey was her life insurance agent. B. She had chosen Corey as her executor. C. Corey was named as her guardian. D. Corey had designated power of attorney.
Answer:
The correct answer is C. Corey was named as her guardian.
Explanation:
A legal guardian is a person appointed by a guardianship authority or a district court to represent a principal in matters where he or she is unable to control his or her own interests or manage his or her affairs himself or herself for other reasons, usually health. A legal guardian cannot act as such in matters where he or she and the principal could have a conflict of interest. Thus, in short, the guardian has the power to make decisions by and for the principal, without requiring the consent of the principal, who consents to his actions by means of a prior mandate.
Do you think Hollywood and record companies have a right to alter or mandate changes to audio/video technology including TV's, TIVO, gaming consoles, DVR's, PC's, phones and IPODS, in order to insure or enforce copyright law?
Answer:
Yes
Explanation:
I think Hollywood and record companies have a right to mandate changes in order to insure or enforce copyright law.
This is because Copyright law sets out to protect ownership of an original creative work by preventing unauthorized usage of the work. The creative work can be in the form of ideas, artwork, book or other forms of media. hence Hollywood and record companies have a right to enforce copyright laws by mandating changes to audio or video technology .
If a company has a quick ratio of 1.25 times, current assets of $25,000 and inventory of $5,000, the current liabilities balance is equal to sign and comma, as applicable) (round to the nearest dollar and include the dollar
Answer:
$16,000
Explanation:
Calculation to determine what the current liabilities balance is equal to
Using this formula
Quick Ratio = Current Assets - Inventory / Current Liabilities
Let plug in the formula
1.25 = ($25,000 - $5000) / Current Liabilities
1.25Current Liabilities = ($25,000 - $5000)
Current Liabilities = $20,000 / 1.25
Current Liabilities =$16,000
Therefore the current liabilities balance is equal to $16,000
The following information is available from the current period financial statements: Net income $150,000 Depreciation expense 28,000 Increase in accounts receivable 16,000 Decrease in accounts payable 21,000 The net cash flow from operating activities using the indirect method is Group of answer choices $141,000 $173,000 $117,000 $215,000
Answer:
$141,000
Explanation:
Given the above information, the net cash flow is computed as shown below
= Net income + Depreciation expense - Increase in accounts receivables - Decrease in accounts payable
= $150,000 + $28,000 - $16,000 - $21,000
= $141,000
Therefore, the net cash flow from operating activities using the indirect method is $141,000
Which competitive strategy best utilizes Country Comfort's core competencies (which include a large and efficient network of obtaining and processing quality coffee beans)
Answer:
I don't know the answer to this
Stephenson Company is trying to decide which one of two contracts it will accept. The costs and revenues associated with each are listed below: Contract X Contract Z Contract Revenue $ 200,000 $ 260,000 Materials 10,000 10,000 Labor 88,000 120,000 Depreciation on Equipment 8,000 10,000 Cost Incurred for Consulting Advice 1,500 1,500 Allocated Portion of Overhead 5,000 3,000 The equipment was purchased last year and has no resale value. Which of these amounts is relevant for the selection of one contract over another?
a) Contract revenue and labor costs
b) Materials, consulting advice and allocated overhead
c) Cost of consulting advice and allocated overhead
d) Contract revenue, labor costs and depreciation on equipment
Answer:
Stephenson Company
The amounts that are relevant for the selection of one contract over another are:
a) Contract revenue and labor costs
Explanation:
a) Data and Calculations:
Contract X Contract Z
Contract Revenue $ 200,000 $ 260,000
Materials 10,000 10,000
Labor 88,000 120,000
Depreciation on Equipment 8,000 10,000
Cost Incurred for Consulting Advice 1,500 1,500
Allocated Portion of Overhead 5,000 3,000
b) The costs of materials and cost incurred for consulting advice, though variable, are equal in each contract. They are not relevant in determining the contract to choose. Contract revenue and labor costs are variable and not equal. They are relevant in determining the contract to select. They make a difference in the decision. Depreciation and overhead costs represent sunk costs. They are not relevant in the decision.