Ajax Computer Company is an accrual-method calendar-year taxpayer. Ajax has never advertised in the national media prior to this year. In November of this year, however, Ajax paid $1 million for television advertising time during a "super" sporting event scheduled to take place in early February of next year. In addition, in November of this year the company paid $500,000 for a one-time advertising blitz during a professional golf tournament in April of next year. What amount of these payments, if any, can Ajax deduct this year?
A. $1.5 million
B. $1.5 million only if the professional golf tournament is played before April 15
C. $1 million
D. $500,000
E. No deduction can be claimed this year
Answer: C
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Which of the following statements is not a potential problem with appointing vendors as category captains?
A. The dependence on the vendor category captain may cause a retailer to miss opportunity for increasing margins through their private-label SKUs. B. Vendors could take advantage of their position by suggesting an assortment plan that includes most of its SKUs and exclude other SKUs that contribute more so to the retailer's profitability. C. The vendor category captain could block other brands from access to shelf space. D. The vendor category captain could collude with the retailer to fix prices. E. Appointing vendors as category captains makes merchandise management tasks difficult for retailers.
Chilé Products Ltd. Chilé Products Ltd. bottles and sells hot pepper sauce. In 2012, the company had expected to sell 65,000 bottles but actually bottled and sold 80,000 bottles. The standard direct materials cost for each bottle is $.24 comprised of .60 ounces at a cost of $.40 per ounce. During 2012, 52,000 ounces of material were purchased out of which 46,000 ounces were used at a cost of
$.37 per ounce. Refer to the Chilé Products Ltd. information above. The direct materials price variance for 2012 was: A) $1,560 F. B) $1,560 U. C) $1,380 F. D) $1,380 U.
Under the perpetual inventory system, in addition to making the entry to record a sale, a company would:
a. debit Merchandise Inventory and credit Cost of Goods Sold. b. debit Cost of Goods Sold and credit Purchases. c. debit Cost of Goods Sold and credit Merchandise Inventory. d. make no additional entry until the end of the period.
Use the information in Table 10.6. How many days will have slack capacity?
A) fewer than three B) three C) four D) greater than four