Physical constraints include all of the following except?
a. Untrained workers
b. Faulty equipment
c. Lack of preventative maintenance
d. Material bottlenecks in supply chain
c. Lack of preventative maintenance
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Which of the following arguments was not used to support the continuation of the accounting for stock-based compensation plans as allowed under APB Opinion No. 25?
A. The fair value approach would increase expenses and lower net income which would result in lower stock prices. B. The Black-Scholes method of valuing stock options has not been widely accepted and is arbitrary. C. The fair value approach could jeopardize compliance with contract terms and conditions. D. Stock options do not involve a cash flow; therefore, the recording of an expense would violate appropriate income measurement.
Fallgatter, Inc, expects to sell 17,500 units. Each unit requires 3 pounds of direct materials at $12 per pound and 2 direct labor hours at $10 per direct labor hour. The overhead rate is $8 per direct labor hour. The beginning inventories are as follows: direct materials, 2,000 pounds; finished goods, 2,500 units. The planned ending inventories are as follows: direct materials, 5,600 pounds;
finished goods, 3,000 units. What is the planned production? a. 15,000 b. 18,000 c. 17,500 d. 17,000
The process of assigning a collection of indirect costs is termed as cost pooling
Indicate whether the statement is true or false
Which of the following statements is CORRECT?
A. When calculating the cost of preferred stock, companies must adjust for taxes, because dividends paid on preferred stock are deductible by the paying corporation. B. Because of tax effects, an increase in the risk-free rate will have a greater effect on the after-tax cost of debt than on the cost of common stock as measured by the CAPM. C. If a company's beta increases, this will increase the cost of equity used to calculate the WACC, but only if the company does not have enough reinvested earnings to take care of its equity financing and hence must issue new stock. D. Higher flotation costs reduce investors' expected returns, and that leads to a reduction in a company's WACC. E. When calculating the cost of debt, a company needs to adjust for taxes, because interest payments are deductible by the paying corporation.