[Nabeel]

yes I think so, because that check must have been already entered on Cash book as it was drawn on 29-december.

[Nabeel]

in chapter 5 sub heading 3
under
Fixed costs: constant over a wide range of activity
there is line,
Note that the “””””cost per unit will decrease as the activity level decreases””””””. For example, say
that the rent was $10,000 and 1,000 units were made. Then you could argue that it takes
$10 rent to make a unit ($10,000/1,000).

thats mistake right ? it should be,
cost per unit will decrease as the activity level increases.
or
cost per unit will increase as the activity level decreases

[Nabeel]

4. llustration
Basic pay = $9/hour for a 40 hour week.
Normal production in that time = 120 units
Bonus = 50% of the time saved on production paid at time and a third
What will be the total wage in a week in which 150 units are made in 40 hours?
A n s w e r
$
Basic pay = 40 x $9 450
150 units should take 50 hours
150 units did take 40 hours
Hours saved 10 hours
Bonus = 50% x 10 x 9 x 1 ?=60
Total pay 510

thats mistake over there right ?
basic pay should be 40×9 = 360
total pay will be 420

am i right ?

[Nabeel]

well i figured it out. i dont know how to delete this forum post so please if possible you can delete it or tell me how to do it.

[Nabeel]

1. is error of omission so no entry is made for that transaction.
2. dr cash 27$ cr rent 27$ (wouldnt make difference in trial balance both are on same Debit side)
3. dr sales 27$ cr receivables control account 27$ (double entry is complete)

[Author]

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