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Kitchen Help Inc. (KHI) is a manufacturer of toaster ovens. To improve control over operations, the president of KHI wants to begin using a flexible budgeting system, rather than use only the current master budget. The following data are available for KHI's expected costs at production levels of 86,000, 101,000, and 116,000 units.
$78,000
If KHI sells the toaster ovens for $17 each, how many units will it have to sell to make a profit of $301,500 before taxes?
Peter is currently raising corn on his 100-acre farm and earning an accounting profit of $100 per acre. However, if he raised soybeans, he could earn $200 per acre. Is he currently earning an economic profit? Why or not?
Compare and contrast the Fair-Value Method (FAS 115) and Equity Method. When should you use each method and why? What are some of the limitations of the Equity Method?
submit your responses to the following questions in a 1-2 page summary msword document. label each question clearly.
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