An enterprise fund should be used when a legal requirement exists that the cost of providing services are to be recovered through fees or charges.
Answer the following statement true (T) or false (F)
True
According to GASB Statement 34, enterprise funds must be used when certain criteria are met. They are (1) When debt is backed solely by fees and charges. (2) When a legal requirement exists that the cost of providing services for an activity, including capital costs, be recovered though fees or charges. Or (3) When a government has a policy to establish fees and charges to cover the cost of providing services for an activity.
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Mansour Memorial Diner is a charity supported by donations that provides free meals to the homeless. The diner's budget for February was based on 3,000 meals, but the diner actually served 3,400 meals. The diner's director has provided the following cost formulas to use in budgets: Fixed element per month Variable element per mealGroceries$0 $2.20 Kitchen operations$4,100 $1.90 Administrative expenses$3,600 $0.60 Fundraising expenses$1,100 $0.00 Required:Prepare the diner's flexible budget for the actual number of meals served in February. The budget will only contain the costs listed above; no revenues will be on the budget.
What will be an ideal response?
Bryans Corporation has provided the following data for its two most recent years of operation: Selling price per unit$53Manufacturing costs: Variable manufacturing cost per unit produced: Direct materials$13Direct labor$6Variable manufacturing overhead$5Fixed manufacturing overhead per year$63,000 Selling and administrative expenses: Variable selling and administrative expense per unit sold$4Fixed selling and administrative expense per year$71,000 Year 1 Year 2Units in beginning inventory0 3,000Units produced9,000 7,000Units sold6,000 7,000Units in ending inventory3,000 3,0000 The net operating income (loss) under variable costing in Year 2 is closest to:
A. $47,000 B. $175,000 C. $203,000 D. $41,000
Civil rights legislation regarding equal opportunity in housing, employment, and public accommodation is an example of providing interest-based solutions to conflicts evolving from claims of discrimination
Indicate whether the statement is true or false.
?Ace Inc. is evaluating two mutually exclusive projects-Project A and Project B. The initial cash outflow is $50,000 for each project. Project A results in cash inflows of $15,625 at the end of each of the next five years. Project B results in one cash inflow of $99,500 at the end of the fifth year. The required rate of return of Ace Inc. is 10 percent. Ace Inc. should invest in:
A. ?Project B because it has no cash inflows in the first four years of its life. B. ?Project B because it has a higher net present value (NPV). C. ?Project A because it will yield cash every year for five years. D. ?Project A because it has a positive net present value (NPV). E. ?Project A because it will generate cash in the initial years of its life.