Answer:
The correct answer is letter "C": Justifies ignoring the matching principle or the realization principle in certain circumstances.
Explanation:
The materiality accounting principle states that some of the Generally Accepted Accounting Principles can be omitted in the entry of an item while record-keeping a company's transactions only in the case the entry does not have any influence on the Financial Statements. Those principles could imply matching or realization principles.
b. The amount of depletion deducted from revenue during 2013 is $3,840,000.
c. The amount of depletion deducted from revenue during 2013 is $2,000,000.
d. The mine is classified as an intangible asset with in indefinite life and is not amortized.
Answer:
The correct answer is B.
Explanation:
Giving the following information:
In April 2013, Sparkle Enterprises purchased the Crimson Mine for $18,000,000. The mine is estimated to contain 500,000 tons of ore with a residual value of $2,000,000 after mining operations are completed. During 2013, 120,000 tons of ore were removed from the mine and sold.
Annual depreciation= [(original cost - salvage value)/useful life of production in units]*units produced
Annual depreciation= (16,000,000/500,000)*120,000= $3,840,000
Weight per engine 22 pounds
Order processing cost $125 per order
Inventory carry cost 20 percent of the average value of inventory per year
Assume that half of lot size is in inventory on average (1,000/2 = 500 units).
Two qualified suppliers have submitted the following quotations:
ORDER QUANTITY SUPPLIER 1 UNIT PRICE SUPPLIER 2 UNIT PRICE
1 to 1,499 units/order $510.00 $505.00
1,500 to 2,999 units/order 500.00 505.00
3,000 + units/order 490.00 488.00
Tooling costs $22,000 $20,000
Distance 125 miles 100 miles
Your assistant has obtained the following freight rates from your carrier:
Truckload (40.000 lbs. each load): $0.80 per ton-mile
Less-than-truckload: $1.20 per ton-mile
Required:
a. Calculate the total cost for each supplier.
b. Which supplier would you select?
c. If you could move the lot size up to ship in truckload quantities, calculate the total cost for each supplier.
d. Would your supplier selection change?
Answer:
a. Cost of Supplier 1 : $6,214,300 per year
Cost of Supplier 2 : $6,147,840
b. Supplier 2 will be selected as it costs $66,460 less than supplier 1.
c. 1,818
d. No.
Explanation:
Supplier : 1 ; 2
Unit price : $510 ; $505
Annual Purchase cost: $6,120,000 ; $6,060,000
One time cost: $22,000 ; $20,000
Orders per year: 12 , 12
Order processing cost: $1,500 ; $1,500
Inventory carrying cost: $51,000 ; $50,500
Distance: 125 ; 100
Weight per load: 22000
Transportation: $19,800 ; $15,840
Total Cost : $6,214,300 ; $6,147,840
Annual Purchase Cost = Demand * Units price
Orders per year = Demand / Lot size
Inventory Carrying cost = [ Lot size / 2 ] * Carrying cost * unit price
Order processing cost = Number of orders * order processing cost.
c. Required lot size for truck : 40,000 / 22 ≈ 1,818
To select a supplier for engines, the total cost for each supplier is calculated based on various factors such as order quantity, unit price, tooling costs, distance, freight rates, order processing cost, and inventory carry cost. Supplier 2 is selected as the preferred choice due to its lower total cost. If the lot size is increased to ship in truckload quantities, the total cost for both suppliers changes, but the supplier selection remains the same.
To calculate the total cost for each supplier, we need to consider the order quantity, unit price, tooling costs, distance, freight rates, order processing cost, and inventory carry cost. By multiplying the order quantity by the unit price and adding the tooling costs, we can calculate the total cost. For supplier 1, the total cost is $488,000 and for supplier 2, the total cost is $487,625. Considering the lower total cost, supplier 2 would be selected. If the lot size is increased to ship in truckload quantities, the freight rates will change. With a truckload rate of $0.80 per ton-mile, the total cost for supplier 1 becomes $486,650 and for supplier 2 becomes $486,794. Therefore, the supplier selection remains the same, with supplier 2 as the preferred choice.
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Answer:
An employee of a company who is being paid to assist in the sale of stock options to the company's employees and receives a bonus based on sales results is referred to as an Agent. This is in accordance with Uniform Securities Act.
Explanation:
The Uniform Securities Act refers to an employee of a company who is paid to assist in the sale of stock option to the company's employees and receives a bonus based on sales results as an agent. Such an employee is required to register with the state.
Answer:
$6,600
Explanation:
Depreciation per units-of-production method:
Depreciation per unit = (cost computerized manufacturing machine - salvage value) / machine's useful units of product.
Depreciation per unit = ($84,600 - $6,000) / 393,000 units
Depreciation per unit = $78,600 / 393,000 units
Depreciation per unit = $0.2 per unit
Machine’s second-year depreciation:
Depreciation second-year = depreciation per unit * second-year units of product
Depreciation second-year = $0.2 * 33,300 units
Depreciation second-year = $6,600
The second year's depreciation of machinery used by the company will be calculated using the units-of-production method is $6,836.50.
To determine the machine's second-year depreciation using the units-of-production method, we need to calculate the depreciation per unit and then multiply it by the number of units produced in the second year.
The depreciation per unit can be calculated by subtracting the salvage value from the initial cost and then dividing it by the estimated total units over the useful life of the machine. In this case, the calculation would be:
Depreciation per unit = (Initial cost - Salvage value) / Estimated total units
Substituting the given values:
Depreciation per unit = ($84,600 - $6,000) / 393,000 = $0.205 per unit
Now, we can calculate the machine's second-year depreciation by multiplying the depreciation per unit by the number of units produced in the second year.
Depreciation expense = Depreciation per unit x Number of units produced in the second year
Substituting the given values:
Depreciation expense = $0.205 per unit x 33,300 units = $6,836.50
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b. Business loans would cost less for the U.S. car manufacturers.
c. It could allow real wages to downwardly adjust more easily.
Answer: c. It could allow real wages to downwardly adjust more easily.
Explanation:
When there is modest inflation, companies in the car manufacturing industry can simply decide not to increase nominal wages. This would lead to a fall in real wages as inflation would ensure that the nominal wages are less than they were worth before.
This decrease in real wages will allow the companies in the industry to reduce labor costs in real terms and become more competitive with the foreign manufacturers.
Answer: $20
Explanation:
The sales commission is 6% and the selling price per unit is $340.
The Sales commission per unit saved therefore is;
= 340 * 6%
= $20.40
= $20