I have some more questions it turns out for managerial accounting. Im hoping som
ID: 2420051 • Letter: I
Question
I have some more questions it turns out for managerial accounting. Im hoping someone can help check my answers/ questions!
As production level decreases the fixed cost per unit:
a.) decreases
b.) increases
c.) stays the same
d.) none of the above
I had increases because although the fixed overhead doesnt change by untis produced the fixed cost per unit does change to compensate for the decrease in units produced thus increasing the value of each individual unit?
Colly Inc pays of 20% of the cost of the purchases in the month purchased and 60% in the month after and 20% in the month after that, how much cash is disbursed in the month after a 108,000 purchase ?
a.) 64,800
b.)21,600
c.) 43,200
d.) none of the above
I said 64,800 because 108,000(.60)= 64,800 and we are looking at the month after the purchase ? However my buddy is persistant it is 21,600.
One more for now
If there are no units in finished goods ending inventory and cost of goods manufactured is less than cost of goods sold, then there must be units in :
a.) finsihed goods begining inventory
b.) work in process ending inventory
c.) work in process begining inventory
d.) none of the above
I know its begining inventory im just not sure which one, I was thinking finished goods begining inventory ?
Thanks!!!
Explanation / Answer
1 As Production level decreases the fixed csot per unit Increases . Because fixed costs are remain constant irrespective of level of production. 2 Since the tota purchse cost was settled in 3 installments i.e 20:60:20 and the question about the installment after the month of purchse , so it is surely 60% of the purchase cost i.e 64,800. 3 If there are no units in finished goods ending inventory and cost of goods manufactured is less than cost of goods sold, then there must be units in :finsihed goods begining inventory. You are right.