Answer:
B. Paying city inspection fees for new equipment
Explanation:
Capital expenditure is an expense incurred by the business to maintain its fixed assets with an objective to increase its efficiency. Any additions and improvements in fixed assets is an capital expenditure.
City inspection is required to evaluate the working condition of the asset and any fees paid for it, is a capital expenditure.
Interest payment on construction bonds, lease rental payments of assets and mortgage interest on asset is a liability payable in intervals and all they are operating expense and not considered to be capital expenditure.
Write 2-3 short paragraphs about the marketing message you will use and why you chose this message. Why does it appeal to your target market
Explanation:
A marketing message that is highly regarded in today's world, is one that manages to demonstrate business values in the form of procedures, products and services that contain added value in addition to the purely profitable.
As an example that would write a marketing message about a new clothing brand, it would include information that demonstrates that the manufacturing process and raw materials used in making the clothing is sustainable and has a low impact on the environment.
This is a strategy that increases the perception of stakeholders in relation to products, a brand that actually has parameters of sustainability in its processes can demonstrate them through its marketing messages to create value and greater reliability in the brand, being a great differential for consumers.
A consumption tax is a tax strictly on spending, while an income tax is a tax on salary paid for work. You are contemplating a run for the presidency in 2012 and some of your economic advisors have argued that you should campaign to replace the income tax with a consumption tax. What argument for a consumption tax might they put forward to you?
Answer:
Consumption taxes are generally considered better for the economy than income taxes.
Explanation:
This is because consumption taxes promote saving and investment, since they are taxes that penalize consumption, and in such a situation, people would likely prefer to consume a bit less, save a bit more, and this additional savings become funds for more investment. More investment would then help the economy grow, creating a positive feedback loop. This is likely the argument that would be presented by the economic advisors.
Income taxes on the other hand, penalize people's hard earned income, whether it is from their work salaries, or from dividends, o from interest.
A volume variance occurs when the company operates at a different capacity level than was expected.
a. True
b. False
Answer: a.True
Explanation:
H and W are married citizens. All of their real and personal property is owned as tenants by the entirety or as joint tenants with right of survivorship. The gross estate of the first spouse to die:__________
1. Includes only the property acquired by the deceased spouse.
2. Is governed by federal tax provisions rather than community property laws.
3. Includes one third of all real estate as the dower right of the first spouse to die.
4. Includes half of the value of all the property owned regardless of which spouse furnished the original consideration.
Answer:
4. Includes half of the value of all the property owned regardless of which spouse furnished the original consideration.
Explanation:
Tenancy by entirety means that property rights are owned by both spouses in equal manner. A married couple that owns real estate property as tenants by entirety are considered one single owner. if one spouse dies, the surviving spouse will inherit the real estate property automatically.
Joint tenancy with right of survivorship means that if one co-owner dies, the surviving co-owner will automatically be the sole owner of the property. Similar to tenancy by entirety except that it applies to owners that are not married.
In both cases, property rights are automatically transferred to the surviving spouse in case one spouse dies.
Due to labor-market regulations that make it difficult for young workers to break into the labor force, Spain has the highest level of youth unemployment (age 15-24) in Europe. The youth unemployment rate peaked in 2013 at 55.7% and has since fallen, but as of 2018 it was still 33.4% (ILO estimates). Based on this information, select whether the following suggested measures would reduce or increase Spanish youth unemployment.
a. offer a government subsidy for companies that hire long-term unemployed youth
b. lower the age at which students can enter dedicated skills-training programs
c. enable youth to leave high school at a younger age
d. increase Social Security contributions by companies
e. increase the number of jobs that are covered by fixed-term contracts
f. make it easier for companies to break fixed- term contracts to lay off workers
g. encourage students to stay in the education system longer
Answer: See explanation
Explanation:
a. offer a government subsidy for companies that hire long-term unemployed youth. = Reduce youth unemployment
In this case, since subsidy is given out to companies that employ long term unemployed youth, this will be a source of motivation to the employees which will in turn employ more youths and this reduces youth unemployment.
b. lower the age at which students can enter dedicated skills-training programs. = Reduce youth unemployment
This will also reduce youth unemployment as more students that is, more youths can enter can go into skills training programs which will lead to reduction of youth unemployment.
c. enable youth to leave high school at a younger age. = Increase youth unemployment.
When youths leave school at a younger age, this will mean that more youths would be looking for jobs and this will increase unemployment.
d. increase Social Security contributions by companies. = Increase youth unemployment
A rise in the social security contributions would lead to a rose in the youth unemployment.
e. increase the number of jobs that are covered by fixed-term contracts. = Increase youth unemployment
This will also bring about an increase in youth unemployment.
f. make it easier for companies to break fixed- term contracts to lay off workers. = Reduce youth unemployment
When companies find it easier to break fixed term contracts to lay off workers, this implies that the old workers in the organization would leave the organizations and more youths can be employed. This help in the reduction of youth unemployment.
g. encourage students to stay in the education system longer. = Reduce youth unemployment.
When students are encouraged to stay in the education system longer, thus helps to reduce youth unemployment.
What would be the maximum cost of a CFL such that the total cost (investment plus operating) would be the same for both CFL and incandescent 60-W bulbs
Answer:
don't know bro sorry for that
Indicate what components of GDP (if any) each of the following transactions would affect. Check all that apply.
Transaction Consumption Investment Government Purchases Net Exports
1. Ford sells a Mustang from its inventory to the Martinez family.
2. Ford manufactures a Focus and adds it to its inventory.
3. Your parents pay an accountant to file their tax returns.
4. Uncle John orders 10 new computers for his finance business.
5. Aunt Polly buys a new air conditioner from a domestic manufacturer.
6. Texas hires public middle school teachers.
7. Your parents buy a bottle of French wine.
8. Uncle John receives a check from the federal government for unemployment insurance benefits.
Answer:
Transactions and Components of GDP affected:
1. Ford sells a Mustang from its inventory to the Martinez family.
Consumption
2. Ford manufactures a Focus and adds it to its inventory.
Investment
3. Your parents pay an accountant to file their tax returns.
Consumption
4. Uncle John orders 10 new computers for his finance business.
Investment
5. Aunt Polly buys a new air conditioner from a domestic manufacturer.
Consumption
6. Texas hires public middle school teachers.
Government Purchase
7. Your parents buy a bottle of French wine.
Consumption and Net Exports
8. Uncle John receives a check from the federal government for unemployment insurance benefits.
None
Explanation:
a) Data:
Components of the GDP are:
Consumption: This GDP component refers to the spending made by households, not for houses.
Investment: This GDP component comprises spending on assets, not for immediate consumption but to generate future returns.
Government Purchases: This component refers to government spending for the maintenance of its services.
Net Exports: This is the difference between exports and imports of goods and services.
Note that the GDP (Gross Domestic Product) can be computed based on three main approaches: income, expenditure, and production output. These three approaches yield the same result.
Hans purchased a 20-year corporate bond in 2015 that promised to pay him 3% interest semi-annually for the life of the loan. The corporation reserved the right to redeem the bond in 2020. Which of those numbers is the bond's maturity?
A. 2015
B. 3
C. 20
D. 2020
Answer:
The answer is "Option C"
Explanation:
In this question the number of the maturity bond is "20", and the bonds are 20 years for corporate bonds, which maturity in 20 years, that's why Option C is correct.
When the domestic currency is strong or expected to become strong, eroding the competitive position of the firm, it can choose to locate production facilities in a foreign country where costs are low due to either the undervalued currency or underpriced factors of production. This is a strategy related to what type of foreign currency exposure?A. Operating exposure.B. Translation exposure.C. Transaction exposure.D. Asset exposure.
Answer:
A. Operating exposure
Explanation:
The Operating exposure may be defined as the extent to which any particular company is exposed to the inflation risk and exchange risk. It is the exposure to the risk occurred in the exchange rate which may impact the revenue of the company.
It refers to he future cash flow of the firm or the company that gets affected because of the change in the exchange rate of the currencies.
It measures the change in the current value of the company that results from the unexpected changes in the currency exchange rates.
In the context, when a company opens up a production facility in a country where the costs are low and the currency of the parent country or the host country is expected to be strong, it is known as the Operating exposure strategy of the company to the increase the cash flow.
Which of the following best states the principle that guides whether or not an expenditure should be capitalized (debited to an asset account) when a new asset is acquired?
a. The fair value of the asset less an allowance for normal wear and tear should be capitalized.
b. Purchase prices should be capitalized, but no other costs.
c. All costs necessary to get the asset ready for its intended use should be capitalized.
d. All amounts paid for in cash should be capitalized.
Answer: c. All costs necessary to get the asset ready for its intended use should be capitalized.
Explanation:
All costs that were necessary to get the assets ready to fulfil its purpose should be capitalized. These include, in the case of fixed assets, the cost price, taxes, transportation costs, as well as installation costs.
These costs will be added to the cost of the asset and recorded as such in the financial statements because they contributed to the long term usefulness of the asset.
If you wanted to withdraw $12,000 from a bank account at the end of each of the next 20 years, approximately how much would you have to invest in the account today assuming a 6% interest rate?
Answer:
Present value of annuity P = $137,639.05 (Approx)
Explanation:
Given:
Amount withdraw A = $12,000
Number of year n = 20
Rate r = 6%
Find:
Present value of annuity P
Computation:
P = A[1-(1+r)⁻ⁿ]/r
P = 12,000[1-(1.06)⁻²⁰]/0.06
P = 12,000 x 11.46992122
P = 137,639.05 (Approx)
Present value of annuity P = $137,639.05 (Approx)
For purposes of estimating the firm's WACC, what are the weights of long-term debt, preferred stock, and equity given the following information from the balance sheet: The value of common stock is $60,000, retained earnings equal $40,000, total common equity equals $100,000, preferred stock has a value of $10,000 and long-term debt totals $120,000.
Answer and Explanation:
The computation is shown below;
Total value is
= Value of debt + Value of preferred stock + Value of equity
= $120,000 + $10,000 + $100,000
= $230,000
Now
Weight of debt is
= Value of debt ÷ Total value of firm
= $120,000 ÷ $230,000
= 0.52 or 52.17%
The Weight of preferred stock is
= Value of preferred stock ÷ Total value of the firm
= $10,000 ÷ $230,000
= 4.35%
And,
The Weight of equity is
= Value of equity ÷ Total value of the firm
= $100,000 ÷ $230,000
= 43.48%
Differences between a job order cost system and a process cost system include all of the following except the
a. flow of costs.
b. documents used to track costs.
c. point at which costs are totaled.
d. unit cost computations.
Answer:
a. flow of costs.
Explanation:
job order costing system is used mainy by companies that make small quantities of distinct products or performs unique services that sticks to specifications as design by the purchaser.
Bauer Software's current balance sheet shows total common equity of $5,125,000. The company has 520,000 shares of stock outstanding, and they sell at a price of $27.50 per share. By how much do the firm's market and book values per share differ
Answer:
$17.64
Explanation:
Calculation for By how much do the firm's market and book values per share differ
Using this formula
Market and book values per share=[Price per share- (Total common equity/Shares of stock outstanding)]
Let plug in the formula
Market and book values per share=[$27.50 per share-($5,125,000 / 520,000)
Market and book values per share=($27.50 per share -$9.86)
Market and book values per share=$17.64
Therefore By how much do the firm's market and book values per share differ is $17.64
You were hoping for more input from the team. There may be a big production increase if TriState can win a new contract from the client. You have decided to try to open the lines of communication with your employees. How are you going to accomplish this?
Explanation:
In order to establish a more effective communication, it is necessary that the manager be more assertive, that is, it is ideal that he be able to transmit the information he wants in an honest and direct way, without appearing rude, but with a transparency that inspires confidence to employees, generating greater identification and motivation to achieve the objectives.
In this case, it is ideal that the manager knows how to integrate his team through feedbacks, incentives and demonstration of the benefits that will bring to the whole team, such as when getting a new client contract. It is ideal to know your team and the personality profile of each member, working on the potential of each one so that your skills are beneficial and add greater efficiency and innovation to the group.
Identifiable intangible assets would include all of the following except patents. goodwill. franchises. trademarks.
Answer:
goodwill
Explanation:
As we know that the intangible assets are those assets which cannot be seen or even touched
It involved the assets such as patent, goodwill, trademark, franchisee, etc
But the asset which cannot be identifiable is goodwill
Therefore as per the given situation, the goodwill is the correct option
Hence, the second option is correct
A 10-year loan of 120,000 is to be repaid with payments at the end of each month. Interest is at an annual effective rate of 6.00%. The first monthly payment is 800. Each additional payment will be k more than the previous month payment. Find k.
Answer:
k = 9.73.
Explanation:
So, from the question we are given the following parameters or information which are going to be useful in solving this problem, They are:
=> The total amount that was borrowed = 120,000, the number of years to repay the loan = 10 years, the annual interest rate = 6% and the first payment = 800.
STEP ONE: Determine the present value.
We are going to need to determine the value for the compound interest which is given as: [(1 + 6%)^(1/12) - 1) × 12 = 5.841%
Therefore, the present value calculated as thus:
= 800/ (5.841 / 12) × ( 1 - 1/ (1 + 5.841/12)^(12 ×10)) = 72579.33.
STEP TWO: Determine the value of k.
The other value,r = k / (5.841 /12 × (1 + 5.841 /12)^(12 × 10))× [ (1 + 5.841 / 12)^(12 × 10 )- 1)/( 5.841 /12) -12 × 10).
= 4872.45 × k.
Therefore, 120,000 = 72579.33 + 4872.45 × k.
k = 9.73
Which of these is not a responsibility of homeownership?a) Being a courteous neighborb) Getting appraisals done annuallyc) Keeping your home properly insuredd) Keeping your home safe and securee) Regular home maintenance
Answer: Being a courteous neighbor
Explanation:
Homeownership simply means having a home by an individual. Some of the responsibilities of homeownership include paying taxes, paying water bills, cleaning gutters, making mortgage payments, keeping the home insured, keeping the home safe, home maintenance etc.
It should be noted that being a courteous neighbor is not a responsibility of a homeownership. Therefore, the correct option is A.
Assume that the future value of an ordinary annuity is $3,246, the annual payment is $1,000, and the interest rate is 8 percent. How many years will it take the $1,000 annual payments to grow to $3,246?
a. 1 year
b. 3 years
c. 5 years
d. 7 years
Answer: b. 3 years
Explanation:
Based on the future value of $3,246 and the annual payment of $1,000, one can guess that the number of payments (years) till the future value is reached will be 3 years.
Plug 3 years in to find out if you are right;
= Annuity * (( (1 + r)^n - 1) / r)
= 1,000 * (( ( 1 + 8%)³ - 1) / 8%)
= $3,246
Answer is proven to be 3 years.
After the USA introduces a tariff in the market for gigastraps, the price of gigastraps in the USA will:A. decrease.B. increase.C. remain the same.D. change in an indeterminate manner.
Answer: increase
Explanation:
A tariff is a tax that is imposed by the government of a particular country on imported goods brought into the country from other countries. A tariff is usually used to protect the infant industry of the domestic economy.
Since USA introduces a tariff in the market for gigastraps, the price of gigastraps in the USA will increase. The tariff will bring about an increase in cost on the part of the producers of gigastraps which will in turn, lead to a rise in the price of gigastraps in USA.
Investment X offers to pay you $3,400 per year for nine years,whereas Investment X offers to pay you $5,400 per year five years. Which of these cash flow streams has the higher present value if the discount rate is 6 percent? If the discount rate is 22 percent?
Answer:
At 6% ; $3400 has higher present value.
At 22% ; $5400 has higher present value
Explanation:
Using the PVA formula:
PVA = C({1 - [1 / (1 + r)^t]} / r )
Where ;
C = cashflow ; r = rate ; t = time
PVA of 3400 for 9 years at 6% = 0.06
PVA = 3400({1 - [1 / (1+ 0.06)^9]} / 0.06)
PVA = 3400([1 -[ 1 / 1.06^9]) / 0.06
PVA = 3400(0.4081015 / 0.06)
PVA = 3400(6.8016922)
PVA = 23125.753
PVA of 5400 for 5 years at 6%
PVA = 5400({1 - [1 / (1+ 0.06)^5]} / 0.06)
PVA = 5400([1 - [ 1 / 1.06^5]) / 0.06
PVA = 5400(0.2527418 / 0.06)
PVA = 5400(4.2123637)
PVA = 22746.764
B.)
PVA of 3400 for 9 years at 22% = 0.22
PVA = 3400({1 - [1 / (1+ 0.22)^9]} / 0.22)
PVA = 3400[1 -[ 1 / 1.22^9]) / 0.22)
PVA = 3400 (0.8329826 / 0.22)
PVA = 3400(3.7862848)
PVA = 12873.368
PVA of 5400 for 5 years at 22% = 0.22
PVA = 5400({1 - [1 / (1+ 0.22)^5]} / 0.22)
PVA = 5400([1 - [ 1 / 1.22^5]) / 0.22
PVA = 5400 (0.6300007 / 0.22)
PVA = 5400 (2.8636397)
PVA = 15463.654
Which of the following statements is NOT true regarding the master production schedule? A. The master production schedule is a timetable that specifies what is to be made and when. B. The master production schedule is a result of disaggregation. C. The master production schedule is a sales forecast. D. The master production schedule provides input to material requirements planning systems.
Answer:
C is not true so it is the correct answer
Explanation:
The statement that is not true about master production schedule is "C. The master production schedule is a sales forecast."
The term "master production schedule (MPS) is used to refer to the specific allotted time period for the production of each commodity. This means that each individual commodity is given a specific scheduled time for its production.
MPS shows the scheduled idea of what product is to be produced and in how much time. This schedule allows for the presentation of what specific commodity is to be produced and at what time. This schedule is a sort of timetable that regulates and monitors the production of individual commodities. It also provides inputs about the materials required and helps in the planning systems. But what it does not do is predict the sales or provide a forecast of sales.While the Master Production Schedule is used more like a timetable to regulate and identify what item has to be produced and when it also helps in the proper production and keeping tabs on the production schedule. Thus, the statement that is wrong about the MPS is option C.
Learn more about MPS here:
brainly.com/question/14059198
Given the vast resources available to mutual fund managers, these managers on average have generally: Multiple Choice outperformed the overall market on a risk-adjusted basis. eliminated excess profits for arbitrageurs. beat broad-based indexes. proved the market to be strong form efficient. underperformed the market on a risk-adjusted basis.
Answer: underperformed the market on a risk-adjusted basis.
Explanation:
A mutual fund manager is someone who implements a investment strategy for a fund and helps.in the management of the trading activities as well. They simply help in overseeing the mutual funds and also help in making vital decisions regarding such investments.
Given the vast resources available to mutual fund managers, these managers on average have generally underperformed the market on a risk-adjusted basis. They've not been able to beat the market while some have even run at a loss as they made bad investment decisions.
Suppose a coworker just brought you a union leaflet urging employees to sign an authorization card. What questions would you ask of the union supporter
Answer:
If a coworker just brought you a union leaflet urging employees to sign an authorization card, the questions needed to ask him will be:
1. How the authorization card work.
2. What does it necessarily mean if one signs the authorization card
3. The next steps after signing the authorization card and what to expect as the end result.
4. If signing the card automatically makes one to become a member of the union.
Challenges to Employee Development Special challenges in employee development include overcoming the barrier that keeps women and minorities from obtaining top jobs, known as the glass ceiling; preparing for the retirement of leaders, a process known as succession planning; and addressing the problem of dysfunctional managers. To address the glass ceiling, companies need to implement development systems that ensure that minorities and women have access to developmental job experiences and developmental relationships. To have an effective succession-planning program, organizations need to identify and develop high-potential employees for management positions. Dysfunctional managers could benefit from additional development to help them succeed. A well-designed system for employee development can help organizations face three widespread challenges: the glass ceiling, succession planning, and dysfunctional behavior by managers. This activity is important because it gives you the opportunity to review several examples of challenges in employee development. The goal of this activity is to discuss how organizations are meeting the challenges of the "glass ceiling," succession planning, and dysfunctional managers. Read each scenario, then select the appropriate category to which it refers.
1. Angela Martinez had difficulty finding a mentor as a Latin American woman.
2. Our organization systematically evaluates high potential employees that we believe can succeed in higher-level business positions.
3. To overcome what would be considered "toxic behaviors", Julie practiced role plays with her coach.
4. Although John, our CEO may be retiring soon, our organization has provided development experiences for candidates to succeed in his role.
5. Our manager, Tom, is arrogant and abrasive, which alienates people both inside and outside of the organization.
6. Our organization provides job assignments based on the successful career paths of past upper managers.
7. The Executive Team at our organization consists of seven men and one woman.
8. Our organization offers Individual Coaching for Effectiveness (ICE) for managers deemed to display dysfunctional behaviors.
9. Our organization tends to have an "old boy’s network" that excluded women from key promotions and positions of power.
Answer:
1. Angela Martinez had difficulty finding a mentor as a Latin American woman. ⇒ REFERS TO GLASS CEILING
2. Our organization systematically evaluates high potential employees that we believe can succeed in higher-level business positions. ⇒ REFERS TO SUCCESSION PLANNING
3. To overcome what would be considered "toxic behaviors", Julie practiced role plays with her coach. ⇒ REFERS TO DYSFUNCTIONAL MANAGERS
4. Although John, our CEO may be retiring soon, our organization has provided development experiences for candidates to succeed in his role. ⇒ REFERS TO SUCCESSION PLANNING
5. Our manager, Tom, is arrogant and abrasive, which alienates people both inside and outside of the organization. ⇒ REFERS TO DYSFUNCTIONAL MANAGERS
6. Our organization provides job assignments based on the successful career paths of past upper managers. ⇒ REFERS TO SUCCESSION PLANNING
7. The Executive Team at our organization consists of seven men and one woman. ⇒ REFERS TO GLASS CEILING
8. Our organization offers Individual Coaching for Effectiveness (ICE) for managers deemed to display dysfunctional behaviors. ⇒ REFERS TO DYSFUNCTIONAL MANAGERS
9. Our organization tends to have an "old boy’s network" that excluded women from key promotions and positions of power. ⇒ REFERS TO GLASS CEILING
Explanation:
Glass ceiling refers to barriers laid out that prevent certain employees from advancing within an organization.
Succession planning takes place when high potential employees are trained and followed in order to fill future vacant managerial positions.
Dysfunctional managers are managers that fail to do their job properly because they do not trust their employees and try to make all important decisions themselves. They really do not want to manage other people's work, instead they believe that only they can do it right.
The impact of globalization on human resource planning
Answer:
The answer is below
Explanation:
The impact of globalization on human resource planning is both positive and negative depending on the point of view it is being looked upon.
Some of which are:
1. Globalization has led to firms and organizations to recruit from far and wide, across nations if needed.
2. It has reduced the cost of traveling and goods and services deliveries
3. It has led to increasing firms reducing the cost of maintaining staff as individual contractors have increased due to the opportunity of remote jobs caused by globalization.
4. The human resources planning has been impacted by globalization such that, many staff has been retrenched.
5. Globalization has also caused brain drain to developing nations in terms of human resource planning.
The riskiest stage of the product life cycle is the
O introduction stage
O growth stage
O maturity stage
O decline stage
Answer:
growth stage
Explanation:
growth stage
A simple trust has ordinary income of $56,000, a long-term capital gain of $20,000 (allocable to corpus), and a trustee commission expense of $5,500 (payable from corpus). The two income beneficiaries, Woo and Jae, are entitled to the trust's annual accounting income, based on shares of 60% and 40%, respectively. Woo is allocated DNI of $________ and Jae is allocated DNI of $._________
Answer:
Woo is allocated DNI of $30,300 and Jae is allocated DNI of $20,200
Explanation:
Item Totals Accounting Taxable Distributable N.I.
Income Income /Deductions
Ordinary income 56,000 56,000 56,000
Net long-term capital 20,000 20,000
gain
Fiduciary fees -5,500 -5,500
Personal exemption -300
Accounting Income/ Taxable 56,000 70,200 70,200
Income before the Distributions
Deduction
Exemption 300
Corpus Capital Gain/Loss -20,000
Distributable Net Income 50,500
Distribution Deduction 50,500
Entity Taxable Income 19,700
Distributable Net Income
Woo allocated DNI = 50,500 * 60% = $30,300
Jae allocated DNI = 50,500 * 40% = $20,200
The goal of maintenance is to minimize the cost of maintenance.
a. True
b. False:
Answer:
B) false
Explanation:
maintenance is the way of preserving condition of necessary asset.
The goal of maintenance is in achieving maximum efficiency as well as availability of needed utilities as well as facilities with optimum cost with safety of life and property.
Bellue Inc. manufactures a single product. Variable costing net operating income was $111,700 last year and its inventory decreased by 3,000 units. Fixed manufacturing overhead cost was $2 per unit for both units in beginning and in ending inventory. What was the absorption costing net operating income last year
Answer:
$105, 700
Explanation:
The cause of the difference between the Variable Costing Net Operating Income and Absorption Costing Net Operating Income is because of fixed costs absorbed in inventory using the absorption costing method.
We need to reconcile the Variable Costing Net Operating Income to Absorption Costing Net Operating Income.
Reconciling the Variable Costing Net Operating Income to Absorption Costing Net Operating Income
Variable costing net operating income $111,700
Fixed costs in Inventory decrease (3,000 × $2) ($6,000)
Absorption Costing Net Operating Income $105,700
Conclusion :
The absorption costing net operating income last year was $105, 700