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  1. W

    Economics, Accounting & Business: Post your doubts here!

    yes the revenue would increase so would the expenses and so Gross Profit would fall comparatively and yes i was wrong net profit would increase too due to economies of scale
  2. W

    Economics, Accounting & Business: Post your doubts here!

    as i said expenses would increase that are variable expenses. more purchases will be made etc..
  3. W

    Economics, Accounting & Business: Post your doubts here!

    here we are assuming the selling price to stay constant
  4. W

    Economics, Accounting & Business: Post your doubts here!

    well according to me, if the GP decreases, fixed expense are constant so net profit too decreases.
  5. W

    Economics, Accounting & Business: Post your doubts here!

    Gross Profit decreases expenses also increases with increase in volume. but netprofit will also decrease
  6. W

    Economics, Accounting & Business: Post your doubts here!

    FIFO is said to be more profitable than LIFO. it also depends on the nature of the product. for eg. Stores selling perishables always want FIFO - that way, they get rid of stuff that might go rotten on them as quickly as possible. If they went LIFO, then the old stuff might never be sold, and...
  7. W

    Economics, Accounting & Business: Post your doubts here!

    production overheads are fixed cost not a direct expense as they do not increase as output increases where as production wages do increase as output increases. so production overheads are not included in prime cost where as production wages are
  8. W

    Economics, Accounting & Business: Post your doubts here!

    yes they are the same but cashbook does not have bank charges included in it so if we start form cashbook balance, we have to consider bank charges
  9. W

    Economics, Accounting & Business: Post your doubts here!

    more elaborated answer. the opening stock value given in Balance Sheet as at 31 December 2001 already contains the 20% profit. so we take the 20% from the opening stock which gives us the provision of unrealized profit created last year i.e $8,000. Now the profit is also to be calculated on...
  10. W

    Economics, Accounting & Business: Post your doubts here!

    for question no.8: as the share have a face value of $5 and premium of $15, we will multiply the no.of share with $20, 50,000 * $20 = $1,000,000 Now as we know net assets = assets - liabilities, therefore, the effect of the debentures will be zero because in the liabilities side $300,000...
  11. W

    Economics, Accounting & Business: Post your doubts here!

    i too was gonna give this kind of example now
  12. W

    Economics, Accounting & Business: Post your doubts here!

    for image no. 11 first we need to calculate the difference between the increase in cost and output of units. this is done so that we can find out the variable cost per unit. Fixed cost remain constant and hence they dont change with output. therefore, the difference between costs is $13,000 -...
  13. W

    Economics, Accounting & Business: Post your doubts here!

    its a repeat mcq from the year may 04 q30. the solution is simple, OAR is always set before a financial year and hence is a forecast. therefore we would first divide budgeted fixed overheads by budgeted no.of units i.e $354,000/118,000 units = $3 OAR. as the overheads under absorbed, which means...
  14. W

    Economics, Accounting & Business: Post your doubts here!

    yes in OAR, its overhead absorption rate, meaning fixed expenses and overheads no direct costs as they are not overheads but variable costs
  15. W

    Economics, Accounting & Business: Post your doubts here!

    yes the answer's A
  16. W

    Economics, Accounting & Business: Post your doubts here!

    here is another:
  17. W

    Economics, Accounting & Business: Post your doubts here!

    xactly
  18. W

    Economics, Accounting & Business: Post your doubts here!

    here is a mcq, although i know its solution but it might help those on preparing for this kind of mcqs.
  19. W

    Economics, Accounting & Business: Post your doubts here!

    as Vinita Manek said, its done like this because the Revenue reserves which are general reserve and profit and loss account( any reserve that has cash at the back end) usually have cash and using this reserve can or might create liquidity problems due to which capital reserves are used which are...
  20. W

    Economics, Accounting & Business: Post your doubts here!

    look at my post at http://www.xtremepapers.com/community/threads/accounts-eco-business-post-your-doubts-here.10459/page-69#post-262454 in detail: for calculating power expense, we will do the following = 7,500 kwh/ 25,000 kwh * $20,000 = $6,000 for rent = 30,000/50,000 * $100,000 = $60,000...
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