The “Bottom Line” The income statement shows how much revenue a company earned over a defined period (typically a year or a quarter), plus the costs and expenses related to generating that revenue. The “Bottom Line” demonstrates net earnings or losses over the period. Income statements also show earnings per share (EPS). EPS shows how much money shareholders would receive if all of the net earnings for the period were distributed. (A highly unlikely occurrence; they’re usually reinvested.)…
a product cost, therefore, is an asset until products are sold. Under variable costing, fixed manufacturing overhead is treated as a period cost and is immediately expensed on the income statement. Both methods threated all other costs the same way. 2. Selling and administrative expenses are treated as period costs under both variable costing and absorption costing and these expenses are never treated as product costs under variable or absorption costing method. 3. Fixed overhead costs of…
The calculation does not involve too much of complication. The managers of Karex just need to apply weights for the same types of product with its cost and aggregate the result. One single hurdle rate to categorize the products price saves a lot of time of the managers in stock valuation. Since, single rate is used, Karex can prompt decisions making more easily and at a faster pace. Using single hurdle…
complete list of goods, property, raw material or even data, whichever is the case according to the business, that are stored in a particular area in order to serve the future of the business. An inventory model is mathematical & empirical approach to study the cost minimization of Inventory overhead such that profits can be maximized by most…
are likely to be converted into cash with a year of a company's balance sheet. Noncurrent assets are assets that can have undetermined cash conversion time period and are typically company buildings and plant equipment. The materials and completed goods of a company that will be available for sale is considered inventory and can be a substantial portion of their current assets. There is a balance of inventory that needs to exist. If there is too much inventory then there are concerns of storage,…
been completed, all the costs that have been assigned to the job will then be transferred from the work-in-process inventory account to the finished goods inventory account. When the job completed has been sold and delivered to the buyer (in the case of John Deere the next plant of manufacturing for the body), all the company job…
Simeon Company is decrease. 3 Inventory turnover =Cost of goods sold Average inventory 2009 $345,500/(($82,500+54,000)/2) = 5.06 times 2010 $411,225/(($112,500+82,500)/2) = 4.22 times The inventory turnover is decrease from year 2009, 5.06 times to 2010, 4.22 times. Therefore , the efficiency of inventory management for Simeon Company is decrease. 4 Days’ sales in inventory =( Ending inventory)/(Cost of goods sold ) X 365 2009 $82,500/($345,500 ) X 365 =…
selling price of shirts remaining in retail inventory to be $15,000. GAC has a policy that says they will repurchase the shirts at the full amount if the inventory is returned before October. Since it is unknown whether these shirts have actually been sold, are in clearance racks, or are sitting in an inventory warehouse, the actual amount of returns is unpredictable. Therefore, the $15000 should be listed as a returns allowance, which would be a subtraction from the accounts receivable balance.…
information about costs for planning and control decisions. 2. Direct materials are not usually easily traced to a product. 3. A variable cost changes in proportion to changes in the volume in activity. 4. 34. Product costs are expenditures necessary and integral to finished products. 5. Cost concepts such as variable, fixed, mixed, direct and indirect apply only to manufacturers and…
bleeding edge technology products. Good examples of price skimming are Apple iPad and Sony PlayStation 3. Problems with this approach: Price skimming strategy cannot last for long Competitors rapidly launch rival products, putting pressure on price To encourage broad distribution (place), it may be necessary to give retailers higher markup, reducing the improved margins Skimming may slow down demand for the product, giving competitors more time to develop lower cost substitute products brought…