Explain Amortised cost and how to calculate it.

Q: replacement cost historical cost net realizable value present value

A: Hey there the question is assumed to be as assets are valued under.

Q: The lessor’s initial direct costs often are substantial. What are initial direct costs?

A: The costs which are associated directly with originating a lease and are essential to acquire the…

Q: Search about how technique is efficient Analysis at the account level to estimate cost.

A: technique is efficient Analysis at the account level to estimate cost.

Q: Describe and apply the lower-of-cost-or-net realizable value rule.

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Q: What are the Nonmanufacturing costs?

A: Cost: The amount paid to purchase the asset, install it, and put it into operations, is referred to…

Q: the amount of relevant costs that would be saved

A: Relevant costs mean the variable costs that affect the decision making.

Q: relevant costs are always: a.variable costs b.avoidable costs c.sunk costs d.fixed costs

A: Relevant costs are the cost that describes the avoidable costs that are incurred for making specific…

Q: In a replacement analysis, why are the previous costs irrelevant?

A: Replacement Analysis is a capital budgeting method that determines whether existing assets need to…

Q: My question is asking the amount of the total variable expense. Please help.

A: Variable expenses are those which do not remain constant. These expense keeps on varying with the…

Q: Define restructuing costs.

A: Income statement: The financial statement which reports revenues and expenses from business…

Q: What would the total expense be?

A: Introduction: Income statement: All revenues and expenses are shown in income statement. It tells…

Q: What effect do minor deviations from the EOQ have on totalinventory cost?

A: Minor variations from the EOQ will not in general highly affect the total inventory cost except if…

Q: Explain the Incremental Cost of Refinancing?

A: Answer: If the interest rate on the higher sum of borrowing is greater, then the average cost of…

Q: Define unavoidable fixed costs.

A: Unavoidable fixed costs are fixed costs which cannot be avoided by discontinuing a product line or…

Q: Describe the different approaches of expense recognition.

A: Expenses are being recognized when the revenues and relevant expenses are matched for the same…

Q: Explain the term utilities expense and give an example.

A: Utilities Expenses are expenses incurred on public service utilities like electricity, sewage,…

Q: Understand and apply the lower-of-cost-or-net realizable value rule.

A:

Q: Describe the following terms: (a) residual value, (b) guaranteed residual value, and (c) initial…

A: (a) Residual value: It is the projected ending value of an asset after its useful life or lease…

Q: Explain any one pros and cons of historical cost.

A: Historical cost is one of the four basic accounting principles. This method is used under Generally…

Q: How can we determine the operating margin?

A: Operating margin refers to percentage of net operating income over the sales of the company.

Q: Define the term Current cost.

A: Cost: The amount paid to purchase the asset, install it, and put it into operations, is referred to…

Q: What are the two approaches that can be used to adjust for flotation costs?

A: The cost which is arises while issue new stock or shares in the market is commonly known as floating…

Q: Explain how to determine the cost of an asset.

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Q: True or false Amortization is the spreading out of a cost over a period of time  ?

A: Cost refers to the amount incurred by the entity over a particular item of expense, asset or…

Q: (a) What are the percentage depletion and the cost depletion allowances?

A: Depletion: It refers to the process of proportionately distributing the cost of the extracting…

Q: What are the usefulness of the gross margin method?

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Q: Define Cost recovery method

A: Cost recovery is a method in accounting wherein a business only records the revenue it earns from a…

Q: what is inventoriable costs?

A: Cost: The amount paid to purchase the asset, install it, and put it into operations, is referred to…

Q: What is function of expense method?

A: Organisations can opt for either of the options to prepare and report the income statement. They are…

Q: Explain the major reasons for allocating costs.

A: The entity allocates its cost by using a different measure. The cost that is allocated is common and…

Q: What circumstances might create distortions where estimated costs are not an accurate representation…

A: The estimated costs are the costs determined through the estimation process on past…

Q: How does the length of the time horizon affect the classification of a cost as fixed or variable?…

A: Cost are being classified as variable and fixed normally. It is necessary to bifurcate the cost in…

Q: The marginal cost of an asset is equivalent to its EUAC. True or False?

A: Marginal Cost of Asset means the cost required to run the asset for the next period. EUAC =…

Q: Define historical costs.

A: Historical cost principle: This is an accounting principle which states that the actual cost paid in…

Q: avoidable and unavoidable cost?

A: Costs are the amount incurred for the different purposes of the business. It is defined in monetary…

Q: Explain how the accounting definition of an asset is related to the choice between absorption and…

A: Absorption costing:   Absorption costing is compulsory under Generally Accepted Accounting…

Q: Explain Classifying Costs for Predicting Cost Behavior?

A:

Q: What is meant by the incremental cost of refinancing?

A: Refinancing refers to making change in the capital structure of the company by replacing the…

Q: example of lower of cost or net realizable value and explain

A: The concept of lower of cost or net realizable value says that the amount of inventory should be…

Q: Discuss the relationship between fixed costs, variable costs and risk.

A: 1. Fixed cost Fixed assets are assets that are used in an organization for the purpose of long-term…

Q: Which costs might be included in the initial cost of equipment?

A: Property, plant and equipment:   Property, plant and equipment are the tangible assets which are…

Q: What are sunk costs? Give an example.

A:

Q: A cost that cannot be changed because it arises from a past decision and is irrelevant to future…

A: Definition:

Q: What are “initial direct costs” and how are they accounted for by lessees and lessors?

A: Initial Direct Costs: Initial direct costs refer to the costs that a lessor incurs directly while a…

Manufacturing Costs

Manufacturing cost is the total cost of procuring or producing a product. In other words, the manufacturing cost is the cost that an individual or business owner undertakes for the manufacturing of goods.