51. Plant assets are recorded at historical cost. What does the historical cost of a

plant asset include?

52. Define book value, residual value, and market value with regard to plant

assets.

53. What does the word “capitalize” mean?

54. What is depreciation and how is it computed in financial accounting?

55. How do you determine the annual depreciation expense using straight-line

method?

56. What financial statement is a plant asset reported on and how?

57. What is a natural resource? What is depletion?

58. What is an intangible asset? Name three. What is amortization?

A company has annual revenues of $5,000,000, fixed cost of $1,500,000, and variable cost of 30% of annual revenues. A.) What are the expected profits? B.) What is the degree of operating leverage? C.) If revenues are 40% below expectation, what is the percent decrease in profits?

2.)What is Opportunity Cost (Define and Explain) ? Give an example of an Opportunity Cost.

-3.) What is a Demand Schedule & Demand Curve (Define and Explain)? What does a Demand Schedule and Demand Curve tell (State) in economics?

Do you think the focus of a Cost Volume Profit (CVP) analysis is the unit cost of an item, the overall profitability of a new product, the profitability of a department manufacturing a new product, or some combination of all of these items?

Explain your reasoning.

Businesses have several costs and one among them is development cost. They are material cost for companies which are either expensed or capitalised as an asset. Required: Discuss the conceptual issues involved and the definition of an asset that may be applied in determining whether development expenditure should be treated as an expense or an asset.

Low Cost Leader Strategy What are some of the risks associated with a low cost leadership strategy? Provide one original example of a company that you believe employs this strategy and why?

Fama's Llamas has a weighted average cost of capital of 11.5 percent. The company's cost of equity is 17 percent, and its pretax cost of debt is 8.5 percent. The tax rate is 35 percent. What is the company's target debt-equity ratio?

A. 0.8745

B. 1.8333

C. 0.9573

D. 0.9665

E. 0.9205

A)

Entries for Materials Cost Flows in a Process Cost System

The Hershey Company manufactures chocolate confectionery products. The three largest raw materials are cocoa, sugar, and dehydrated milk. These raw materials first go into the Blending Department. The blended product is then sent to the Molding Department, where the bars of candy are formed. The candy is then sent to the Packing Department, where the bars are wrapped and boxed. The boxed candy is then sent to the distribution center, where it is eventually sold to food brokers and retailers.

Show the accounts debited and credited for each of the following business events:

a. Materials used by the Blending Department.

b. Transfer of blended product to the Molding Department.

c. Transfer of chocolate to the Packing Department.

d. Transfer of boxed chocolate to the distribution center.

e. Sale of boxed chocolate.

B)

Equivalent Units of Production

The Converting Department of Soft Touch Towel and Tissue Company had 1,040 units in work in process at the beginning of the period, which were 30% complete. During the period, 21,600 units were completed and transferred to the Packing Department. There were 1,160 units in process at the end of the period, which were 70% complete. Direct materials are placed into the process at the beginning of production.

Determine the number of equivalent units of production with respect to direct materials and conversion costs. If an amount is zero, enter in "0".

C)

Equivalent Units of Production

The following information concerns production in the Baking Department for March. All direct materials are placed in process at the beginning of production.

a. Determine the number of units in work in process inventory at March 31.
units

b. Determine the equivalent units of production for direct materials and conversion costs in March. If an amount is zero, enter in "0".

D)

Costs per Equivalent Unit

The following information concerns production in the Baking Department for March. All direct materials are placed in process at the beginning of production.

a. Based on the above data, determine each cost listed below. Round "cost per equivalent unit" answers to the nearest cent.

b. Assuming that the direct materials cost is the same for February and March, did the conversion cost per equivalent unit increase, decrease, or remain the same in March?

1. The monthly cost of heating our company office is a fixed cost, a CEO says, "because we adjust the thermostat according to the weather conditions which are beyond our control." Do you agree? Is this a variable cost? Explain your ground concisely.

2. At Q company, the annual depreciation expenses for the production equipment are computed under an accelerated depreciation method, resulting in annually changing depreciation amounts. with respect to the production volume, the depreciation amount total level is a ____ cost. Then, explain your ground concisely below.