Answer:
The correct answer is letter "A": Production increases at a decreasing rate.
Explanation:
Law of Diminishing Returns states that the marginal product of an additional employee will be less than the marginal product of a previous employee at some point as the number of new employees increases. Adding additional employees at a certain point will saturate the workplace to the point that there will be workers without being assigned duties. There, productivity begins to decrease gradually.
Answer: D. $480,000.
Explanation: OCF ( operating cash flow) is usually calculated using the following formula: Operating Cash Flows = Net income + Noncash Expenses ( Depreciation Expense) + Changes in Working Capital.
Net income =$380,000
Depreciation = $70,000
Increase in accounts = $30,000
OCF = $380,000 + $70,000 + $30,000
= $480,000
Answer:
Cashflow statement gives the true state of affairs of a business with respect to cash and cash equivalent. Whereas a company may report good profit, it may be running an unhealthy business because of its poor management of cash resources. As a result, such a business may run into troubles.
Cash from operating Activities is a healthy way of evaluating the core operations of the business, to make good investment judgment around the profit reported.
Net Income = $380,000
Add Depreciation (non- cash expense) = $70,000
Deduct Increase in Accounts receivables (non-cash income) = $30,000
Cash from operations = $420,000.
Answer:
$750,000 units
Explanation:
Calculation to determine the number of units the company would have to manufacture during the year
PRODUCTION BUDGET
Budgeted unit sales 700,000
Add desired ending finished goods inventory 73,000
Total $773,000)
(700,00+73,000
Less beginning finished goods inventory $23,000
Units to manufacture 750,000
Therefore number of units the company would have to manufacture during the year would be: $750,000
The tariff has resulted in a net drop of $80 million in combined surplus between consumers and producers, but a $60 million increase in government income, which is less than the net decrease in combined surplus between consumers and producers.This means that the tariff policy is not helpful for the welfare of the United States, and hence the supplied statement is FALSE.
What are the increase and decreases of consumer and producer surplus?
Prior to technological development, demand was 1000 units, while supply was 400. This means there are 600 units of imports.
The globe price drops by $100 as a result of technical improvement. Area CEDG is responsible for the increase in consumer surplus.
The decrease in producer surplus is given by area CEFG in image format
As a result of the lower world price, the consumer surplus rises $110,000, or $110 million; the producer surplus falls $30,000, or $30 million, and the total surplus raises $80 million.
The price will return to its original level if the government imposes a $100 tariff on imported televisions.
Imports will be reduced to 600 units, as well. Both the consumer and producer surpluses will return to their previous levels. A total of $60 million will be raised by the government.
For more information about consumers and producers, refer below
Answer
The answer and procedures of the exercise are attached in the images below.
Explanation
Please consider the data provided by the exercise. If you have any question please write me back. All the exercises are solved in a single sheet with the formulas indications.
Answer:
Job 334 total cost: $ 8,400
Unit cost: 8,400 / 200 = $ 42
Explanation:
Total cost: Material + Labor + Overhead
Material: 5,000
Labor: 2,400
Overhead:
We distribute the expected cost over the expected base:
expected cost: 100,000
cost driver: 40,000 labor hours
cost per hour: 100,000 / 40,000 = 2.5 predetermined overhead
Now we multiply this rate by the hours of the job to know Applied Overhead:
job labor hours x overhead rate:
Job #334 had 2,400 labor cost / $6 rate per hour = 400 hours
400 x 2.5 = 1,000
Total cost: 5,000 + 2,400 + 1,000 = 8,400
Ken is determined not to have employees work on Sunday, but he would like to know the opportunity cost of not working on Saturday. Provide Ken with an estimate of the opportunity cost, and explain why you do not have to consider rent or depreciation of office equipment in your estimate.
Answer:
Parrish Plumbing
1. Opportunity cost of not working on Saturday:
= $52,000 per year.
2. Parrish's monthly rent or depreciation related to office equipment are not considered because they are not incremental costs. Non-incremental costs do not make any difference to the decision to work on Saturday or not. Therefore, the costs are regarded as sunk, because they must be incurred no matter the decision. They are therefore irrelevant and non-variable in nature.
Explanation:
Daily revenue = $2,500
less relevant or incremental expenses:
Labor $700
Parts 500
Transport 100
Office staff 200 (1,500)
Incremental profit $1,000 per week
Annual incremental profit = $52,000 (52 * $1,000) or opportunity cost
The opportunity cost of not working on Saturday for Parrish Plumbing is $52,000, which is the foregone profit. This is calculated by subtracting operation costs from potential revenue. Sunk costs like rent or depreciation are not considered as they don’t affect incremental costs.
To calculate the opportunity cost of not working on Saturday for Parrish Plumbing, we need to subtract the total costs associated with working on Saturday from the total revenue that could be generated if work was done on that day. Ken is projecting a daily revenue of $2500 for each Saturday they would be opened for 52 Saturdays in a year, giving a total annual revenue of $130,000 ($2500 * 52).
The costs for staying open on Saturday include $700 for labor, $500 for parts, $100 for transportation, and $200 for office staff which totals to $1500. Therefore, the net profit for working on a Saturday would be the revenue ($2500) subtracted by the costs ($1500), which gives us $1000. Over 52 Saturdays in a year, this amounts to $52,000 ($1000 * 52). The $52,000 is the opportunity cost of not working on Saturday. This represents the amount of profit Ken is foregoing to give his employees the day off.
Regarding why we don’t need to consider rent or depreciation of office equipment, those are considered sunk costs. Sunk costs are expenses that have already been incurred and cannot be recovered. These costs do not change regardless of business operations, hence, they are not relevant when considering incremental costs for extra operation days.
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Answer:
Present value of payments to the bank=938.51
Explanation:
The present value of the payment to the bank are an ordinary annuity i.e equal payments made at the end of each year for 16 years.
The Present value of an ordinary annuity is calculated as follows:
where PMT is the annual payment made at the end of each year=$100;
i is the interest rate or discount rate = 4%,
n=the number of years the periodic payment of 100 is to be made=12
Present value of payments to the bank = = 938.51