The following income statement is provided for Vargas, Inc. Sales revenue (2,500 units × $60 per unit) $ 150,000 Cost of goods sold (variable; 2,500 units × $20 per unit) (50,000 ) Cost of goods sold (fixed) (8,000 ) Gross margin 92,000 Administrative salaries (42,000 ) Depreciation (10,000 ) Supplies (2,500 units × $4 per unit) (10,000 ) Net income $ 30,000 What is this company's magnitude of operating leverage?
Answers
Answer:
The correct answer is 3.
Explanation:
According to the scenario, the computation of the given data are as follows:
Variable cost = Cost of goods sold (variable) + Supplies
= $50,000 + $10,000 = $60,000
Fixed cost = Cost of goods sold (fixed) + Administrative salaries + Depreciation
= $8,000 + $42,000 +$10,000 = $60,000
So, we can calculate the operating leverage by using following formula:
Operating leverage = Contribution margin ÷ Net operating income
Where, Contribution Margin = Sales revenue - Variable cost
= $150,000 - $60,000 = $90,000
And Net operating income = Contribution Margin - Fixed Cost
= $90,000 - $60,000 = $30,000
By putting the value, we get
Operating leverage = $90,000 ÷ $30,000
= 3
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Answers
Answer:
The workers at State Hospital, a public sector employer, and Acme Inc, a private employer, are subject to speech censorship and arbitrary job termination. Constitutional issues are present only for the State Hospital workers is a TRUE statement.
Explanation:
- The State Hospital is owned and supervised directly by the state government, whereas, the organization named Acme Inc, is privately owned.
- In a state-owned entity, the state government is the authority that has the final say which is based on the Constitution.
- Hence, the arbitration done in the state hospital issues would also include Constitutional issues.
- Whereas, the same would not be the case with the privately owned organization.
B)Each worker is paid a wage equal to the highest value of the marginal product of labor(i.e., $40).
C)Each worker is paid $15.
D)We need to know the product price before we can figure out the wage rate.
Answers
Answer: A. In equilibrium, each worker is paid is or her value of marginal product of labour.
Explanation:
Marginal productivity of income distribution refers to the additional revenue derived from the marginal unit of product produced and that wages should be equal to the marginal revenue derived from the production of additional or marginal product and this is achieved at equilibrium.
The theory also implies that workers should not be paid below or above the marginal revenue derivable from marginal product which implies they cannot be paid $15 or $40, moreover the product price is not a determinant of wages rate.
Final answer:
In equilibrium, each worker is paid his or her value of the marginal product of labor.
Explanation:
According to the marginal productivity theory of income distribution, wages are determined by the marginal product of labor. Therefore, the correct answer to your question is option A: In equilibrium, each worker is paid his or her value of the marginal product of labor. In the context of your question, this means Noe is paid $40, Barbara $35, Calvin $27, and Diana $15, reflecting each's respective marginal productivity.
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Answers
Answer:
Price Elastic
Explanation:
We know that
The formula to compute the price elasticity of demand is shown below:
= (Percentage change in quantity demanded) ÷ (percentage change in price)
The classification as follows
1. Perfectly inelastic = If zero
2. Inelastic = When elasticity is below than one
3. Unitary elastic = When elasticity is equal to one
4. Elastic = When elasticity is exceeded than one
5. Perfectly elastic = When elasticity is in infinity
Since the percentage change in the quantity demanded of a good is greater than the percentage change in the price of the good which reflects that the elasticity is more than one
Answer:
The demand is price elastic in nature because it is greater than 1.
Explanation:
Price Elasticity of demand refers to the response of quantity demanded of a good to the change in price. Of course, when the price decreases, quantity demanded of a good increases and vice-versa but to how much degree is determined by the Price Elasticity of demand.
Mathematically, Price Elasticity of Demand is the ratio of % change in quantity demanded of a good and % change in the price of a good i.e.
Price Elasticity of Demand = % change in quantity demanded of a good / % change in the price of a good
In the problem, since the percentage change in the quantity demanded of a good is greater than the percentage change in the price of the good, the above ratio will be greater than 1. Hence, the demand of the good is price elastic.
Answers
Answer:
1.267 = Overhead Rate
Explanation:
As general approach, the manufacturing rate, along with any rate is done by dividing the cost by a cost driver.
In this case teh cost is the manufacturing overhead and the cost driver the direct materials cost:
Using Direct Materials cost, the rate would be:
b. compensating differential
c. taste-based discrimination
d. not clear why XYZ did not match the other firm's offer
Answers
Answer:
The correct answer from the options given is D)
It is not clear why XYZ did not match the other firm's offer.
Explanation:
Alejandro is already an employee at XYZ Tech Corp. If his boss is willing to let him go, it may be because they are unable to match the higher salary being offered by the competition.
Another theory is that Alejandro is no longer very productive in the current company. There is a myriad of possible reasons. However, none of these are hinted in the question.
What we know is that he is Hispanic, He is a computer programmer and he got a better offer which his current company is unable to match.
We cannot posit that this is an issue of statistical discrimination. Why? We don't know that his current boss is not Hispanic as well.
A) Statistical Discrimination arises when agents make use of an individual's measurable trait to draw conclusions regarding another characteristic important to the interaction but more difficult to detect. This clearly is not the case.
B) When the factors surrounding a job suddenly become more adverse, the employee can reject such a change. Sometimes a company may offer such employee(s) additional money to their salary for them to accept such changes. This additional money or benefit is called Compensating Differential.
This also is clearly not the case.
C) Taste-based discrimination simply examines an employer's disposition to hiring a minority applicant. This theory posits that the prejudice of an employer towards people from a minority group will ultimately affect hiring decisions.
Again, this is not the picture painted in the above scenario.
So we are left with option D as the correct answer.
Cheers!
b. A credit to Cash Over and Short for $4.00.
c. A debit to Petty Cash for $392.50.
d. A credit to Cash for $396.50.
e. A debit to Cash for $396.50.
Answers
Answer:
The correct answer would be:
A credit to cash of $385. However, this is not an option indicated. But, according to the figures provided, the answer i recommend is correct.
Explanation:
Debit: Various expenses $382
Debit: Cash shortage ($450 - $382 - $65) $3
Credit: Cash: 385
To record entry to replenish the petty cash fund.
The entry to replenish the petty cashfund will include a debit to Cash for $396.50. The correct option is e.
The custodian must record a debit to the Petty Cash account to raise it back to the starting balance of $450 in order to replenish the petty cash fund. $382 + $65 = $447 in total receipts and cash on hand (coins and currency).
The custodian is short by $2.50 because the initial fund amount is $450. A debit of $396.50 ($450 - $2.50) will be issued from Cash to reflect the amount owed to the custodian in order to return the Petty Cash account to $450.
Thus, the correct option is e.
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