Explain why traditional cost allocation methods do not work well in a CIM environment
Traditional accounting systems do not accurately trace costs to products and processes. An assumption of standard costing is that all overhead needs to be allocated to products and that overhead directly relates to the amount of labor required to make the product. In the traditional environment, direct labor is a much larger component of total manufacturing costs than in the CIM environment. With automated manufacturing, overhead is a far more significant cost component. Applying standard costing leads to product cost distortions and poor decisions regarding pricing, valuation and profitability.
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In the United Kingdom, which is not one of the unethical issues around Fair Trade practices?
a. Misrepresenting the program to the customers b. Expecting higher revenues c. Lying about the Fair Trade program d. No giving customers relevant information that could affect purchasing decisions
Bridge Company makes special equipment used in cell towers
Each unit sells for $410. Bridge uses just-in-time inventory procedures; it produces and sells 12,000 units per year. It has provided the following income statement data: Traditional Format Contribution Margin Format Sales revenue $4,920,000 Sales revenue $4,920,000 Cost of goods sold 2,900,000 Variable costs: Gross profit 2,020,000 Manufacturing 1,000,000 Selling & admin. expenses 650,000 Selling & admin. 400,000 Contribution margin 3,520,000 Fixed costs: Manufacturing 1,900,000 Selling & admin. 250,000 Operating income $1,370,000 Operating income $1,370,000 A foreign company has offered to buy 100 units for a reduced sales price of $300 per unit. The marketing manager says the sale will have no negative impact the company's regular sales. The sales manager says that this sale will not require any additional selling and administrative costs, as it is a one-time deal. The production manager reports that there is plenty of excess capacity to accommodate the deal without requiring any additional fixed costs. If Bridge accepts the deal, how will this impact operating income? (Round any intermediate calculations to the nearest cent, and your final answer to the nearest dollar.) A) Operating income will increase by $29,917. B) Operating income will decrease by $29,917. C) Operating income will increase by $30,000. D) Operating income will decrease by $30,000.
Mary goes into Honest Harry's Electronics and purchases a TV. Mary agrees to pay for the TV in 30 days on the store's "30 days same as cash" plan. This is an executory contract
Indicate whether the statement is true or false
As a general rule, a promise must be supported by consideration. Which of the following is an exception to the rule and can be enforced without the support of consideration??
A) A non-charitable enterprise financed by the subscriptions of individuals B) A promise to refrain from doing what one has no right to do C) An act performed prior to the promise made by the promisor D) An obligation of record such as a judgment