The straight-line method applies a consistent depreciation expense every year, the units-of-production method correlates depreciation with actual usage, and the double-declining-balance method accelerates depreciation. The units-of-production method tracks wear and tear on the equipment most closely.
Straight-Line Method:
Depreciation expense per year = (Cost - Residual value) / Useful life = ($33,000 - $6,000) / 4 = $6,750
Accumulated depreciation per year = Depreciation expense × Number of years
Book value per year = Cost - Accumulated depreciation
Units-of-Production Method:
Depreciation expense per hour = (Cost - Residual value) / Total estimated hours = ($33,000 - $6,000) / 6,750 = $3.26
Depreciation expense per year = Depreciation expense per hour × Number of hours operated
Accumulated depreciation per year = Sum of depreciation expenses each year
Book value per year = Cost - Accumulated depreciation
Double-Declining-Balance Method:
Depreciation expense = Book value at beginning of year × (2 / Useful life)
Accumulated depreciation per year = Sum of depreciation expenses each year
Book value per year = Cost - Accumulated depreciation
#SPJ12
The straight-line, units-of-production, and double-declining-balance depreciation methods result in different depreciation expenses which are based on the cost, salvage value, and usage of the equipment. The units-of-production method is the most accurate in tracking the wear and tear of the equipment as it considers the actual hours of operation.
The depreciation schedules for the three different methods; straight-line, units-of-production, and double-declining-balance, can be calculated as follows:
The units-of-production method most accurately tracks the wear and tear on the equipment as it directly ties the depreciation expense to the hours of the equipment's operation.
#SPJ11
Answer:
a. Taxable income/loss = (-$187500)
b. Current income tax benefit = $39780
Explanation:
Lets first understand the difference between reported income and taxable income. Reported income is the income earned by an entity during an accounting period which is calculated based on accounting rules and conventions whereas taxable income is calculated by tax authorities based on their own policies.
Now an important thing here to note is 'accounting concepts differ from tax policies (i.e permanent differences), so due to the differences in the policies two income figures are calculated separately by the entities following accounting conventions and tax authorities.
For example accounting follows the accruals concept which requires entities to record expenses and revenue in the period they are incurred whereas tax authorities might be following a cash basis of accounting so they wouldn't be allowing any expenses that are non-cash, such as accounting depreciation which is replaced by tax depreciation.
Now coming to the calculation, taxable income is calculated by adding back non-cash items, deducting items that are tax-exempt and adding back items that are dis-allowable under tax authorities.
The taxable income is calculated as follows;
Pretax book income = $752500
less: tax depreciation = (-$620000)
less: tax-exempt income = (-$320000)
Taxable income/loss = (-$187500)
Burhcham corporation has made a loss of (-$187500) which means Burcham has no tax liability this year.
Assuming a tax rate of 34% and that tax losses can be carried backward.
A tax relief could be claimed by Burhcam corporation as follows.
Burcham corporation's prior-year taxable income was $117000 so the tax relief is equal to $117000×34%=$39780
Current income tax benefit = $39780
The remaining $70500 ($187500 - 117000) net operating loss will be recorded as a deferred tax asset with the amount of tax (i.e $70500×34%) $23970.
Answer:
The correct answer is: comparative advantage.
Explanation:
In Business, comparative advantage is an advantage that a company has over its competitors. The strategy relies on the company being able to produce at a lower comparative cost. This is achieved by lowering production costs or by introducing more efficient manufacturing strategies.
In Canada's case, the reopening of Voisey's Bay mine implies an opportunity to lower the costs of the commercialization of nickel since there will be more of that resource available for extraction.
Canada, being a significant nickel producer with the reopening of Voisey's Bay mine, is said to have a comparative advantage. This term refers to a country's ability to produce goods at lower opportunity costs compared to others, which allows Canada to efficiently produce and export nickel.
Canada's position as the world's second-largest producer of nickel, paired with the reopening of the Voisey's Bay mine, equips Canada with what is known as a comparative advantage in the global nickel market. A comparative advantage refers to a country's ability to produce a certain good or service at lower opportunity cost than its trading partners. In this case, due to the vast resources of nickel-bearing ore at Voisey's Bay, Canada has a cost advantage, which enables Canada to produce and export nickel more efficiently than other countries.
#SPJ3
2. Does the pattern of variances suggest that the company’s managers have been making trade-offs? Explain.
Answer and Explanation:
According to the scenario, computation of the given data are as follow:-
1. Direct Material Price is
= Actual Quantity × (Standard Rate - Actual Rate)
= 1,780,000 × ($1.40 - $1.30)
= 1,780,000 × 0.10
= $178,000 Favorable
Direct Material Quantity Variance is
= Standard Rate × (Standard Quantity - Actual Quantity)
= $1.40 × [(210,000 × 8) - 1,780,000]
= $1.40 × (1,680,000 - 1,780,000)
= $1.40 × -100,000
= -$140,000 Unfavorable
Direct Labor Rate Variance is
= Actual Hour × (Standard Rate - Actual Rate)
= 4,900 hours × ($12 - $13)
= -4,900 hours × $1
= -$4,900 Unfavorable
Direct Labor Efficiency Variance is
= Standard Rate × (Standard Hours - Actual Hours)
= $12 × [(210,000 × 0.024) - 4,900]
= $12 × [5,040 - 4,900]
= $12 × 140 hour
= $1,680 Favorable
2. As we can see that the material price variance and labor efficiency variance comes in favorable while on the other side, the material quantity variance and labor rate variance comes in unfavorable.
And we assume that the managers are purchasing the materials efficiently at lesser rates and the usage is not efficient.
Consequently , labor is efficient if the company paid at higher rate.
Therefore the managers are making trade offs.
Moreover, they are compromising of labor rate so that there would be rise in efficiency.
And at the same time if cheaper material is buyed so the quality is compromised and the changes of wastage is high that reflects the material quantity variance unfavorable
phenomena is associated with high
unemployment?
A. Economic Growth
B. Economic Stability
C. Economic Depression
Answer:
C. Economic Depression
Explanation:
Economic Depression is when an economy goes into financial turmoil/ struggles.
Answer:
Option c. 0.73
Explanation:
Data provided in the question:
Market value of securities = $5,000
Current beta of the portfolio = 1.28
Beta of the riskiest security = 1.75
Required beta = 1.15
Now,
let the beta of the other security be 'x'
Portfolio beta = weighted average of individual betas in the portfolio
or
1.28 × 8 × $5000 = [ x × (8 - 1) × $5000 ] + [ 1.75 × $5000 ]
or
$51,200 = $35,000x + $8750
or
$35,000x = $42,450
or
x = 1.21
Thus,
If she wishes to reduce the beta to 1.15, by replacing the riskiest security,
let the beta of the replacement security be 'y'
Therefore,
1.15 × 8 × $5000 = [ 1.21 × (8 - 1 ) × $5000 ] + [ y × $5000 ]
or
$46,000 = $42,350 + $5,000y
or
$5,000y = $3,650
or
y = 0.73
Hence,
Option c. 0.73
Pareto chart is the Sigma Analytical tool which is used for management.
It is a chart or a graph that is used to represent defects and their cumulative so that analyses can indicate areas that need improvements or changes. It also indicates the statistical occurrence of these defects and their impact. It can be applied in different areas that deals with data and data analysis such as communicating data with others and where there are many problems but one wishes to focus on the most significant.
Specifically to the question the problems have been identified and isolated, therefore this tool can be used to analyse data of the already identified problems, the frequency of occurrence and causes of these defects.