Question all-fixed costs the new york company has built a, Ask an Expert

Accounting

Question: All-Fixed Costs The New York Company has built a massive water-desalting factory next to an ocean. The factory is completely automated. It has its own source of power, light, heat, and so on. The salt water costs nothing. All producing and other operating costs are fixed; they do not vary with output because the volume is governed by adjusting a few dials on a control panel. The employees have flat annual salaries. The desalted water is not sold to household consumers. It has a special taste that appeals to local breweries, distilleries, and soft-drink manufacturers. The price, $.66 per gallon, is expected to remain unchanged for quite some time. The following are data regarding the first 2 years of operations:

Orders can be processed in 4 hours so management decided, in early 20X1, to gear production strictly to sales.

1. Prepare three-column income statements for 20X0, for 20X1, and for the 2 years together using (a) variable costing and (b) absorption costing.

2. What is the break-even point under (a) variable costing and (b) absorption costing?

3. What inventory costs would be carried on the balance sheets on December 31, 20X0 and 20X1, under each method?

4. Comment on your answers in numbers 1 and 2. Which costing method appears more useful?

View complete question

Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M92650311

Have any Question?Write your Review or question?

Related Questions in Accounting Basics

Myob assignmentassessment purposethis assignment is an

MYOB Assignment Assessment Purpose This assignment is an individual assessment assessing your learning from the MYOB tutorials and Pabst & Perrin text by completing the February transactions and end of month processing. ...

Question - calculation of book valueon june 1 20 a

Question - Calculation of Book Value On June 1, 20 a depreciable asset was acquired for $4,560. The asset has an estimated useful life of five years (60 months) and no salvage value. Using the straight-line depreciation ...

Question - assume a legal entitys capital structure

Question - Assume a Legal Entity's capital structure consists of the following accounts: Short-term note payable $ 200,000 Long-term note payable 500,000 Mandatorily redeemable preferred stock 350,000 Common stock 60,000 ...

Question -what are the factors that affect the decision to

Question - What are the factors that affect the decision to prosecute an entity? How can computers and technology help in investigating a fraud? What kinds of challenges can the involvement of technology present to a cas ...

Question instructions - visit website of international

Question: Instructions: - Visit Website of International Financial Reporting Standards the material available for educational institutions. - Select one of the IFRS standards read it thoroughly. - Form a group of not mor ...

Question - splish company purchased equipment for 221000 on

Question - Splish Company purchased equipment for $221,000 on October 1, 2017. It is estimated that the equipment will have a useful life of 8 years and a salvage value of $12,480. Estimated production is 40,100 units an ...

Question - dividend income susan owns shares of stock in a

Question - Dividend Income. Susan owns shares of stock in a corporation. In January 2018, she received a 1099-DIV reporting the following: Total ordinary dividends $526 Qualified dividends included in total dividends 450 ...

Accounting question - a comparative balance sheet for

Accounting Question - A comparative balance sheet for Halper Corporation appears on the next page, and the statement of cash flows form follows. Explain below, why you must convert from an accrual basis of accounting to ...

Question - on december 31 2016 alpha company invested 10000

Question - On December 31, 2016, Alpha Company invested $10,000 in 2 years, certificate with a 4% annual interest rate with semi-annual compounding. Use this information to determine the maturity value of the certificate ...

Question upload a document that provides the following

Question: Upload a document that provides the following information. 1) Give a simple, nontechnical 1 sentence answer to the question posed (this is not a writing assessment, focus on research). 2) What is (are) the Code ...

4,153,160 Questions Asked
13,132 Experts
2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Recent Questions

Ask Accounting Basics Expert