Intangible assets derived mostly from human capital are on the rise, according to the advisory firm Ocean Tomo. A study of the Standard and Poors' 500 index from 1975 to 2015 demonstrated a 17 percent increase in market value of intangible assets over this time period. Companies such as Stryker get 70 percent of its value from intangibles. Intangible assets are
A. money.
B. land.
C. equipment.
D. non-physical.
Answer: D
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Answer the following statements true (T) or false (F)
1. A number of studies show that individuals perform better when given easier-to-reach objectives, as they are less likely to become frustrated and give up. 2. One of the must criteria in setting objectives is that they be participatively set. 3. Management by objectives has four steps. 4. Communication is the key factor in determining MBO’s success or failure
U.S. GAAP and IFRS provide criteria for distinguishing operating leases from capital leases. Which of the following is/are true?
a. Under the capital, or finance, lease method, the lessor records the signing of a capital lease the same as if the lessor sold the leased asset for an installment note receivable. b. Under the capital, or finance, lease method, the lessee recognizes interest expense on the lease liability, similar to recognizing interest expense on long-term notes or bonds. c. Under the capital, or finance, lease method, the lessee amortizes the leased asset, similar to recognizing depreciation on buildings and equipment. d. Under the capital, or finance, lease method, the lessee records the leased asset and the lease liability on the balance sheet at the present value of the contractual cash flows at the time of signing the lease. e. all of the above
An operations chart, or right-hand/left-hand chart, points out wasted motion and idle time
Indicate whether the statement is true or false
AAA Metal Bearings produces two sizes of metal bearings (sold by the crate)—standard and heavy
The standard bearings require $200 of direct materials per unit (per crate), and the heavy bearings require $245 of direct materials per unit. The operation is mechanized, and there is no direct labor. Previously AAA used a single plantwide allocation rate for manufacturing overhead, which was $1.55 per machine hour. Based on the single rate, gross profit was as follows: Per unit Standard Heavy Direct materials cost $200.00 $245.00 Manufacturing overhead cost 124.00 93.00 Total manufacturing cost $324.00 $338.00 Sales price per unit 350.00 370.00 Gross profit per unit $26.00 $32.00 Although the data showed that the heavy bearings were more profitable than the standard bearings, the plant manager knew that the heavy bearings required much more processing in the metal fabrication phase than the standard bearings, and that this factor was not adequately reflected in the single plantwide allocation rate. He suspected that it was distorting the profit data. He suggested adopting an activity-based costing approach. Working together, the engineers and accountants identified the following three manufacturing activities and broke down the annual overhead costs as shown below: Activities: Estimated Cost Metal fabrication $420,000 Machine processing 152,000 Packaging 17,000 Total overhead cost $589,000 Engineers believed that metal fabrication costs should be allocated by weight and estimated that the plant processed 12,000 kilos of metal per year. Machine processing costs were correlated to machine hours, and the engineers estimated a total of 380,000 machine hours for the year. Packaging costs were the same for both types of products, and so they could be allocated simply by the number of units produced. The production plan provided for 4,000 units of standard and 1,000 units of heavy bearings to be produced during the year. Additional data on a per unit basis was as given below: Standard Heavy Kilos per unit 2.00 4.00 Machine hours per unit 80.00 60.00 Using the data above, calculate the predetermined overhead allocation rates using activity-based costing. Then, following the ABC methodology, calculate the production cost and gross profit for one unit of standard bearings. (Round your intermediate calculations to two decimal places.) What will be an ideal response