A manufacturing company prepays its insurance coverage for a three-year period. The premium for the three years is $2,100 and is paidat the beginning of the first year. Sixty percent of the premium applies to manufacturing operations and forty percent applies to selling andadministrative activities. What amounts should be considered product and period costs respectively for the first year of coverage?ProductPeriodA)$280$420B)$420$280C)$700$0D)$0$700O A. Choice DO B. Choice CO C. Choice AO D. Choice B

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Answered: A manufacturing company prepays its…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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A company enters into a contract with a customer to build a building, with a performance bonus of $33,500 if the building is completed by September 30, 2021. The bonus is reduced by $5,000 each week that completion is delayed. The company commonly includes these completion bonuses in its contracts and, based on prior experience, estimates the following completion outcomes: Completed by ProbabilitySeptember 30, 2021 70%October 7, 2021 15%October 14, 2021 10%October 21, 2021 5%The amount of revenue the company should recognize related to this bonus is $_______________.
Company M uses the cost recovery method. During 19A, it sells goods with a cost of $15,000 for $25,000, payable in installments of $10,000, $10,000 and $5,000, respectively, beginning in 19A. How much profit should be recognized each year?
Ecco Company sold $128,000 of kitchen appliances with six-month warranties during September. The cost to repair defects under the warranty is estimated at 7% of the sales price. On October 15, a customer required a $100 part replacement, plus $80 labor under the warranty. a. Provide the journal entry for the estimated expense on September 30. If an amount box does not require an entry, leave it blank. b. Provide the journal entry for the October 15 warranty work. If an amount box does not require an entry, leave it blank.
What is the liability for the outstanding premiums at year-end?* a. 2,000,000 b. 562,500 c. 2,250,000 d. 500,000
Question: A manufacturing company prepays its insurance coverage for a three-year period. The premium for the three years is $3,090 and is paid at the beginning of the first year. Ninety percent of the premium applies to manufacturing operations and ten percent applies to selling and administrative activities. What amounts should be considered product and period costs respectively for the first year of coverage? a) $3,090 / $0 b) $2,781 $309 c) $1,854 $206 d) $927 / $103
4. Bonita.com sells 6800 units of its product for $460 each. The selling price includes a one- year warranty on parts. It is expected that 3% of the units will be defective and that repair costs will average $40 per unit. In the year of sale, warranty contracts are honored on 120 units for a total cost of $4800. What amount should Bonita.com accrue on December 31 for estimated warranty costs? Select answer from the options below a. $8160 b. $32640 c. $ 4800 d. $3360
Company Z manufactures printers, which comes with one-year warranty. During this year, Company Z sold 51,000 units of printers for $510,000 of total revenues. The company estimates that it will cost the company $150 in warranty costs for every unit sold. At the beginning of this year, Company Z reported a liability for estimated warranty costs of $1,000,000. During the year, the company paid $850,000 in warranty claims filed by customers for printers they had bought. At the end of year, what would be the total warranty liability reported on the balance sheet?

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