In fact, even a business with a very high markup may not be able to cover its expenses ones taxes, interest rates on debts and other expenses are included. Oftentimes the markup cited will only include variable costs and not include costs such as re... Read more
In terms of flow of cost, the principle that FIFO follows is clearly reflected in its name. We follow strict ethical journalism practices, which includes presenting unbiased information and citing reliable, attributed resources. Therefore, the inven... Read more
When you perform analysis of variances, you may find both favorable and unfavorable variances. Volume variance occurs when a company produces more or less than planned. If the budgeted number of units differs from actual production, both material co... Read more
Financial analysis adds value by calculating ratios, spotting and managing business trends, and providing decision support for new opportunities. Alternate problem A Pocket Umbrella, Inc., is considering producing a new type of umbrella. This new po... Read more
This is where consignment inventory comes into play. Consigned inventory reduces the retailer’s risk because the consignor (i.e., the supplier or vendor) retains ownership of the merchandise until they’re sold. This means that the consig... Read more
Expenses related to income earned during a set time are included in (or "matched to") that period regardless of when the expenses are paid. In some cases, businesses look to create losses in order to reduce their tax liabilities. For example, a busi... Read more
What you want is something that is going to provide a temporary storage need that is durable and secure enough to store small amounts of cash. Cash Boxes and Lock Boxes are used for temporary storage of cash during the day. Made of steel, these lock... Read more
When using models to compute the ongoing exposure, FAS 157 requires that the entity consider the default risk ("nonperformance risk") of the counterparty and make a necessary adjustment to its computations. When balance sheet is prepared, unrealized... Read more
The LIFO method proponents argue that the LIFO method improves the matching of revenues and replacement costs. However, the cost of ending inventory presented in the balance sheet presents older costs. More importantly, users of the LIFO method say... Read more
Your home insurance gives you financial protection if your home or belongings are damaged or destroyed, but there are different kinds of protection available. If you have a replacement cost policy, you’re covered for the actual replacement cos... Read more
