Advanced Accounting - Standalone book
Advanced Accounting - Standalone book
12th Edition
ISBN: 9780077632588
Author: Hoyle
Publisher: MCG
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Chapter 7, Problem 4P

Which of the following is correct for two companies that want to file a consolidated tax return as an affiliated group?

  a.    One company must hold at least 51 percent of the other company’s voting stock.

  b.    One company mast hold at least 65 percent of the other company’s voting stock.

  c.        One company must hold at least 80 percent of the other company’s voting stock.

  d.    They cannot file one unless one company owns 100 percent of the other’s voting stock.

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Perreth Drycleaners has capacity to clean up to 5,000 garments per month. Requirements 1. Complete the schedule below for the three volumes shown. 2. Why does the average cost per garment change? 3. Suppose the owner, Dale Perreth, erroneously uses the average cost per unit at full capacity to predict total costs at a volume of 2,000 garments. Would he overestimate or underestimate his total costs? By how much? Requirement 1. Complete the following schedule for the three volumes shown. (Round all unit costs to the nearest cent and all total costs to the nearest whole dollar.) Total variable costs Total fixed costs Total operating costs Variable cost per garment Fixed cost per garment 2,000 Garments 3,500 Garments 5,000 Garments $ 2,800 2.00 Average cost per garment Requirement 2. Why does the average cost per garment change? The average cost per garment changes as volume changes, due to the component of the dry cleaner's costs. The cost per unit decreases as volume , while the variable…
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