Describe the procedure of handling unequal service life problems in Replacement Analysis?

Q: “The inspection point is the key to the allocation of spoilage costs.” Do you agree? Explain.

A: Spoilage: Spoilage is the defective item at intermediate or final stage. The spoilage goods cannot…

Q: Describe the shortcomings of the direct write-off method.

A: Direct write-off method: This method does not make allowance or estimation for uncollectible…

Q: What does the equipment replacement investment decision involve?

A: Equipment replacement investment decision is an important form of capital budgeting decisions. In…

Q: What is a special order? How does operating capacity affect a special order? In what scenario would…

A: A special order mean a sales order which is in addition to the sales to regular customers of a…

Q: Assess the purpose of identifying failure modes with relevant examples in the process of Failure…

A: Failure mode effect and criticality analysis performed as :- The basic assumption when performing…

Q: Which one of the following techniques would most likely be used to analyze reductions in the time…

A: Learning curve is a graphical representation that reports the relationship between cost and the…

Q: Why is there a need to re-evaluate impairments due to trigger events?

A: When-ever there are any types of assets which are non-tangible assets as well as tangible assets…

Q: What is the difference between adjusting entries and correcting entries? Which method is better and…

A: Difference between adjusting entries and correcting entries:Usually, adjusting entries are needed at…

Q: Explain the benefits of postretirement.

A: Post-retirement benefits may include life insurance  and medical plans, or premiums for such…

Q: “Costs of abnormal spoilage are losses.”Explain.

A: Abnormal spoilage is spoilage that is not inherent in a specific production process and will not…

Q: Disadvantage of institutional based correction

A: Following is the answer to the given question

Q: A good structure diagram should be loosely coupled yet strongly cohesive. How can you achieve both…

A: Entity-Relationship Diagram: A diagram which represents the entity relationship available in the…

Q: Why was the disposal value used for only replace and not upgrading?

A: Disposal Value will be used only in case of replacement because current machine will be sold if we…

Q: Explain service method of allocating prior service cost.

A: Service cost refers to the part of pension expenses deducted every year. Service cost is amortized…

Q: Distinguish between ordinary repairs and extraordinaryrepairs. How is each accounted for?

A: Ordinary repairs:   These costs are incurred to maintain the long-term asset in good condition for…

Q: What is the equipment replacement?

A: Under replacement, one is focused with equipment and machinery that worsens with the passage of…

Q: Verifying repair costs will be handled differently from auditing depreciation costs. What's the…

A: Answer: Repaid costs are the costs that pertains to the maintenance of the assets Depreciation costs…

Q: What is a possibe break-even point scenario in the resturant indurstry?

A: Break-even point is the point wherein revenues equals expenses or contribution equals fixed costs.…

Q: What is the difference between a normal procedure and an extended procedure?

A:

Q: Briefly describe the replacement chain (common life) and the EAA approaches to theunequal life…

A: Replacement Chain Method: A company usually comes across various projects having different life such…

Q: Differential analysis can aid management in making decisions on a variety of alternatives, including…

A:

Q: What is the benefit of identifying avoidable and unavoidable cost in decision making process?

A: Avoidable costs: Avoidable Costs, as the name suggests, are the costs that can be avoided of the…

Q: What is important for a MACRS to consider at the time of disposal?

A: MACRS stands for Modified Accelerated Cost Recovery System. These are the regulations of…

Q: Describe the Replacement Analysis using the Opportunity-Cost Approach?

A: The company always considers the replacement projects when the old machinery or plant in the project…

Q: How can Replacement Analysisbe used when the Required Service Period Is Long?

A: Replacement analysis tells a company about the replacement time of an asset. The asset gets obsolete…

Q: Describe the process of handling Unequal Service Lives?

A: Answer: When the project’s life is equal, it is easy to determine the different capital budgeting…

Q: What do the comparison of alternatives with unequal service livesrequire?

A: Present worth means discounting the future cash flows at the interest rate. The calculation of the…

Q: Explain the accounting treatment required when a change is made to the estimated service life of…

A: .

Q: Discuss the benefit of identifying avoidable and unavoidable cost in decision making process.

A: Benefit of Avoidable Cost   1. Avoidable cost Avoidable cost helps management in decision making…

Q: Explain Replacement-Analysis Fundamentals?

A: Replacement-analysis fundamentalUnder this, the decision regarding the replacement of obsolete as…

Q: Explain Handling Unequal Service Lives?

A: The two projects compared has unequal project lives. Such projects are handled by two…

Q: Why runaway gap (technical analysis) occur? Explain.

A: Introduction : The mentality underlying a runaway gap would be that dealers who missed the initial…

Q: The correction of errors is the situation that creates prior period adjustments. Explain what are…

A: Prior period adjustments:   The corrections or adjustments that are made to the current year…

Q: Should the component be purchased and production stopped ?

A: In relevant costing, in order to decide whether the Company should buy the product or do it's in…

Q: ust be either overhauled or replaced with a new syst ro alternatives:

A: The NPV can be computed as follows:

Q: Explain Handling Unequal Service Life Problems in Replacement Analysis?

A: Companies often consider various options when it does the replacement projects. Companies come…

Q: Consider the Comparing Unequal-Service-Life Problems?

A: The unequal service life of the project refers to the useful life of a project. This denotes the…

Q: Describe the steps to be taken to correct an error.

A: Accounting Error:   It is an unintentional mistake in recording an accounting entry and is…

Q: possible is reflected proaches to program Active treatment

A: The answer has been mentioned below.

Q: How can we compare the alternatives with unequal service lives?

A: When making a decision between two investment alternatives, it may so happen that the alternatives…

Q: Appraisal cost would be high so wait for Failure Cost.

A: In common use, cost refers to the monetary value of products and services purchased by producers and…