Answer:
(a) $9,000 per employee
(b) $252,000; $198,000
Explanation:
Given that,
Fringe benefits cost during 2018 = $450,000
Employees assigned to division A = 28
Employees assigned to division B = 22
(a) Allocation rate:
= Total cost to be allocated ÷ Cost driver
= $450,000 ÷ 50
= $9,000 per employee
(b) Cost assigned to A:
= Division Allocation Rate × Weight of base (No. of employees)
= $9,000 × 28
= $252,000
Cost assigned to B:
= Division Allocation Rate × Weight of base (No. of employees)
= $9,000 × 22
= $198,000
Answer:
The journal entry for the interest payment is shown below:
Explanation:
Interest Expense A/c........................Dr $16,098
Premium on bonds payable A/c....Dr $952
To Cash A/c............................Cr $17,050
Working Note:
Interest expense = Bonds sale value × Market rate
= $321,964 × 5%
= $16,098
The market rate will be:
= 10 / 2
= 5%
Because it is paid semiannually, so rate is divided by 2.
Cash = Par value × Contract rate
= $310,000 × 5.5%
= $17,050
The contract rate will be:
= 11 / 2
= 5.5%
Because it is paid semiannually, so rate is divided by 2.
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The decision to expand depends on the marginal cost of serving more clients and the marginal revenue he will earn from serving more clients.
<h3>What is marginal cost and marginal revenue?</h3>
Marginal revenue is the change in total revenue when output is increased by one unit. Marginal cost is the change in total cost when consumption is increased by one unit.
Economic theory suggests that output should be increased if the marginal revenue exceeds the marginal cost. If marginal cost is greater than marginal revenue, the business should not be expanded. Profit is maximised when marginal revenue is equal to marginal cost.
To learn more about marginal revenue, please check: brainly.com/question/7781429
An economist calculates the GDP for one year using the expenditure approach by adding together all the amounts spent on final goods and services. This also includes investments, government consumptions and net exports.
The answer to the question would be choice A.