The symbol for the number of units of product, number of machine hours, or other indicator of activity or volume as shown in the equation of the cost line y = a + bx.
The symbol for the number of units of product, number of machine hours, or other indicator of activity or volume as shown in the equation of the cost line y = a + bx.
A graph’s horizontal base which indicates the total number of units or other units of volume or activity for the amounts indicated by the y-axis.
Why is a negative cash balance reported as a liability? The following will illustrate why a negative cash balance is reported as a liability instead of being reported as a negative asset amount. Company X writes checks...
the amounts of a and bx. a is the estimated total amount of fixed electricity costs during the month. It is the value of y, when x is zero. If the total cost line intersects the y-axis at $1,000 then it is assumed that...
valuable. (Think Apple, Coke, Nike, etc.) Due to the cost principle, the balance sheet may be reporting trademarks at close to $0. Examples of Trademarks on the Balance Sheet Assume that Company X, a consumer products...
What is the rule of 72? The rule of 72 is a simple formula that tells you the approximate amount of time or interest rate needed for an amount to double. The formula is Years X Rate per year = 72. Here’s how it works....
Our Explanation of Bonds Payable covers the recording of bonds, the accrual of interest expense, and the amortization of the discount and premium on bonds payable. You gain an understanding on why the market value of...
Our Explanation of Bonds Payable covers the recording of bonds, the accrual of interest expense, and the amortization of the discount and premium on bonds payable. You gain an understanding on why the market value of...
($60,000 X 4% X 1/12) plus a principal payment of $1,571.44. After this payment, the principal balance will be $58,428.56 ($60,000.00 – $1,571.44) Interest payment of $194.76 ($58,428.56 X 4% X 1/12) plus a...
12% per year for four years. If the interest will be compounded quarterly, the number of periods (n) will be __________ 16 (4 years X 4 quarters per year) and i will be 3%. 7. An unrestricted deposit of $1,000 grows to...
at par on March 1, 2024. On March 1, the issuer will debit Cash for $ __________ $102,000. $100,000 X 100% = $100,000 + $2,000 of accrued interest. Accrued interest is $100,000 X 12% X 2/12 = $2,000. , Bonds...
overhead costs assigned to Product A would be $240 (8 total hours X $30). However, if departmental manufacturing overhead rates are used, the amount assigned to Product A will be: (7 hours X $50) + (1 hours X $20) =...
A driver of a change in the amount of a dependent variable. The independent variable is usually represented by “x”, the dependent variable by “y”, the rate of change by “b”, and the...
A formula that calculates the optimum quantity to be purchased (or produced) so as to minimize the combined total cost of carrying inventory and processing additional purchase orders (or production setups). The formula...
variable is expressed as x and is referenced on a graph’s x-axis.) Hence the equation for the monthly electricity cost will be y = a + bx, which signifies that the total electricity cost (y) for a specific month is...
assume that a company uses the accrual basis of accounting. If the company borrows $100,000 on December 15 and agrees to pay interest on the 15th day of each month at the rate of 1% per month, the interest expense for...
Products X & Y, which are much higher volume products using a simple process involving inexpensive machines. If the company allocates its fixed manufacturing overhead costs to products based on volume (such as...
of materials (100 units of good output X 5 pounds of materials per unit of output). If the company actually used 530 pounds of materials, the materials usage variance will be $90 unfavorable (30 additional pounds of...
to the change in the volume of activity A mixed cost is also referred to as a semivariable cost. A mixed cost is expressed by the algebraic formula y = a + bx, where: y is the total cost a is the fixed cost per period b...
= the square root of [(2 X 12,000 units of annual demand X $144 the incremental cost to process an order) / $16 the incremental annual cost to carry one unit in inventory] = the square root of [(2 X 12,000 X $144)...
Business X for $5 million based on Business X’s annual net income X 10. The fair value of Business X’s identifiable assets was $4 million and its liabilities were $1 million. Therefore, Company A is paying $5...
adjusting entry that debits Vacation Expense for $200 (10 hours X $20 per hour) and credits Vacation Liability for $200. As a result, the balance in the balance sheet account Vacation Liability at December 31 is $2,400...
! The present values for the FUTURE cash INFLOWS are: ($50,000 X 0.86) + ($40,000 X 0.74) + ($60,000 X 0.64) = $111,000. The present value of the cash outflows is ($100,000 X 1.00) = $100,000. The present values IN of...
) in a present value calculation, if you know the future amount, the present value, and the __________ interest rate. 11. Company X received a promissory note from Corp Y. The note does not specify any interest and it...
) in an ordinary annuity, if you know the amount of each payment, the present value of the annuity, and the __________ interest rate. 11. Company X received a promissory note from Corp Y. The note does not specify any...
Our Explanation of Future Value of a Single Amount will show you the power of compounded interest on a single deposit. You will see how the future value tables can be useful as well as the rule of 72.
year for 5 years. Download our Straight-line Method Form and Template. Units-of-Production Method Depreciable cost of $90,000 divided by 100,000 units = $0.90 per unit. In 2022, the company produces 12,000 units X $0.90...
of January, the flexible budget for January will be $90,000 ($40,000 fixed + $10 x 5,000 MH). If the machine hours in February are 6,300 hours, then the flexible budget for February will be $103,000 ($40,000 fixed + $10...
: $40 million of long-term debt with an after-tax cost of 4% $10 million of 7% preferred stock $50 million of common stock and retained earnings with an estimated cost of 15% The corporation’s weighted-average,...
for each year of employment times the employee’s average monthly salary or wages during a three-year period prior to retirement. A hypothetical calculation for an employee retiring at age 65 might be 1% X 30 years of...
determined that the reorder point for its Product X is 80 units and its economic order quantity is 400 units. When the inventory level of Product X drops to 80 units, the company places an order for 400 units. The 80...
is $1,000 ($100,000 X 12% X 1/12) and the company’s balance sheet should report the following current liabilities: Notes payable of $100,000 Interest payable of $1,000 Nothing is reported for the $8,000 of future...
during their production processes. This shrinkage is also known as spoilage or waste and it can be either normal or abnormal. Example of Inventory Shrinkage Assume that a retailer’s computerized inventory records...
on Notes Receivable Assume that on December 1, a company has lent one of its suppliers $30,000 with interest at 12% per year. Interest is to be paid quarterly (with the first interest payment to be made on March 1). On...
that should be withheld from an employee’s salary of $180,000 in the year 2024 is $__________ $13,063.20 Social Security tax of $10,453.20 (6.2% X $168,600) PLUS Medicare tax of $2,610 (1.45% X $180,000). 5. What is...
, the total market value of the shares would have been $5 million. After the 2-for-1 stock split, the corporation’s market value will also be $5 million (200,000 shares X $25 per share). This is the same for each...
at various levels of machine hours, the dollars of total electricity costs are indicated on the __________. Select... x-axis y-axis 11. In the cost equation, y = a + bx, the variable cost per unit of activity is...
In the equation of a straight line, y = a + bx, ‘bx’ is the total variable cost resulting from the variable cost rate ‘b’ multiplied times the quantity ‘x’.
The amount by which total costs will change when an activity is increased by one unit. In the equation of the line, y = a + bx, the variable cost rate is represented by ‘b’ and the units of activity are...
Featured Review
"I enrolled in an accounting course online. I was sent textbooks and a workbook in the mail and that was it. I was on my own to figure out the rest. It was difficult trying to match the course and workbook together to do the lessons and exercises and the explanations left too many gaps and questions. I knew I needed extra support. I stumbled upon AccountingCoach in an Internet search and from the little I was able to read, I gained a far better understanding than the college level textbook I had been studying for months. I signed up for the PRO level and it got even better. I'm able to do more exercises and gain extra studying tools and more detailed explanations to ensure my understanding of the accounting process. Truthfully, I've learned more through the AccountingCoach PRO than the college textbook and it cost sooo much less! It has been a life saver. I don't think I could have continued without it. Thank you for creating such an amazing experience and giving me the confidence I needed to keep working towards my goal." - Crystal C.
Join PRO or PRO Plus and Get Lifetime Access to Our Premium Materials
Read all 2,645 reviews
For the past 52 years, Harold Averkamp (CPA, MBA) has
worked as an accounting supervisor, manager, consultant, university instructor, and innovator in teaching accounting online. He is the sole author of all the materials on AccountingCoach.com.
We now offer 10 Certificates of Achievement for Introductory Accounting and Bookkeeping: