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’.
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 quantity on hand that will trigger an order to buy more items. A company’s reorder point for Product X might be 80 units. When the quantity on hand gets down to 80, a purchase order is prepared to obtain more...
A graph’s vertical scale that usually indicates the total dollars for the volume or units indicated by the x-axis.
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...
The statistic known as the coefficient of correlation. The range of this statistic is -1 to +1. When this statistic is squared the result is the percentage change in the dependent variable y that is explained by the...
An item that is dependent on another item. For example, your wages would be a dependent variable and the hours you work would be the independent variable. This relationship is often expressed as y = a + bx, where y is...
the cost per unit. If there are 80 units in inventory at the end of the accounting period, the cost of the ending inventory and the cost of goods sold (using the periodic inventory system) are as follows: Amount from...
. Select... Cost center Revenue center Profit center Investment center Use the following information for Questions 19 - 20: During its most recent accounting year, Division X of Conglomerate Corporation had a net income...
hour. This means that when the machine is not running, the company is missing the opportunity to earn a contribution of $140 per machine hour. During the 4-hour setup time, the company is...
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...
a company’s fixed expenses for a period of time by the contribution margin ratio. Mark as wrong Mark as right sales This term is associated with the revenues earned by selling products. It can be expressed as units...
variable(s) is __________. Select... r r² Sₑ t 15. The standard error of the coefficient provides an amount for determining the range of __________. Select... a b x y 16. Assume that a cost is estimated to be $10,500...
What is lead time in purchasing? In purchasing, lead time is the estimated time between ordering goods and receiving the goods. For instance, if 100 units of Product X are ordered on April 11 and are expected to be...
Our Explanation of Payroll Accounting discusses the taxes and benefits which are withheld from employees' pay as well as the taxes and benefits that are expenses for the employers. Also provided are examples of the...
was $103,000 during the month, it’s June direct labor cost per equivalent unit will be $10 ($103,000 divided by 10,300 equivalent units). This means that $100,000 (10,000 X $10) of labor costs will be assigned to the...
and equipment. If the required test of impairment indicates that a loss must be recorded on its plant and equipment, its book value must be reduced and the resulting loss reported on its income statement. A second...
will be due five years later. In addition to the one-time loan costs of $120,000 the company will also have the cost of the borrowed money which is $360,000 ($4 million X 9%) of interest each year for five years. It...
. When 10 loaves are produced, the total cost of flour will be $4. If 50 loaves are produced, the cost of flour will be $20 (50 loaves X 1 pound X $0.40 per pound). An expense can also be a variable cost. For instance,...
books are sold, the cost of goods sold will be $352 (16 X $22) and the inventory cost of the remaining 4 books will be $88 (4 X $22). In total, the bookstore had purchases of $400 + transportation-in cost of $40,...
between interest expense and interest payable, let’s assume that a company borrows $200,000 on November 1 at an annual interest rate of 6%. The company is required to pay each month’s interest on the 15th day of the...
of interest on each June 1 and December 1. On December 31, the company will have earned one month’s interest amounting to $500 ($100,000 x 6% per year x 1/12 of a year, or 1/6 of the semiannual $3,000). No...
and a stated interest rate of 6% per year. This means that the bond issuer is obliged to pay the following amounts: $30,000 of interest every six months until the bond matures ($1,000,000 X 6% X 6/12) $1,000,000 at...
. Each year, this stockholder must receive dividends on the preferred stock of $800 (8% X $100 = $8 per share X 100 shares) before the common stockholders are allowed to receive any cash dividends for the year. Unless...
for FUTA per year per employee will be $42 ($7,000 x 0.006). If an employee earns $5,000 during a calendar year, the employer’s cost for that employee will be $30 ($5,000 x 0.006). Accounting for FUTA Tax In the...
$390,000 (consisting of fixed manufacturing costs of $300,000 and fixed SG&A expenses of $90,000). The amount of the company’s contribution margin was $480,000 calculated using the following amounts: Revenues of...
. In other words, the corporation has dividends in arrears of $60,000 (6% X $100 X 10,000). The preferred stock’s dividends in arrears must be disclosed in the corporation’s notes to its financial statements. This...
, software, an online calculator, or present value tables. The following format is helpful when using a present value of an ordinary annuity (PVOA) table: PVOA = PMT x PVOA factor for n=6, i=? $4,623 = $1,000 x PVOA...
to be depreciated is $480,000 ($500,000 minus $20,000). Dividing the $480,000 by the machine’s useful life of 240,000 units, the depreciation will be $2 per unit. If the machine produces 10,000 units in the first...
a corporation issues $10,000,000 of bonds having a stated interest rate of 6% and maturing in 10 years. This means that the corporation agrees to pay interest of $300,000 semiannually ($10,000,000 X 6% X 1/2 year)...
output X $10 per standard machine hour). If our example had stated that the manufacturer actually produced 32,000 standard machine hours of good output, the products would have been assigned $320,000 of fixed...
-month construction period. The maximum amount of capitalized interest will be $320,000 X 6% X 3/12 = $4,800. If this ends up being the amount of capitalized interest, the asset’s cost will be $404,800 which will...
two alternatives. Note: Incremental costs may include more than the change in variable costs. Example of Incremental Cost Let’s assume that a company has the following experience: Total cost of manufacturing 8,000...
% and will mature in 3 years. The cash that the investor will be receiving is $2,500 every six months ($100,000 X 5% X 1/2 year) for 3 years and then $100,000 at the end of 3 years. The bond’s current price is...
. the vendor's __________ invoice, and 11. the company's __________ receiving report or ticket. 12. A $1,000 invoice from a supplier has terms of 2/10, n/30. The amount that should be remitted to the...
Our Explanation of Present Value of a Single Amount discusses the time value of money and the need to discount future amounts to the time of an investment or other transaction. The present value of 1 table is used to...
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...
Our Explanation of Accounts Payable provides insights on the bill paying process in a large company. Included are discussions of the three-way match, early payment discounts, end of period accruals, and more.
or assigns its variable manufacturing overhead costs on the basis of machine hours (MH). The variable manufacturing overhead spending variance is the difference between the actual variable manufacturing overhead costs...
What is an invoice? Definition of Invoice An invoice is a dated bill prepared by the seller of goods sold (or services provided) which includes brief descriptions of the items, quantities of items and their unit prices,...
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