It results in lower short run average cost in economies of sale .
<h3>Economies of scale</h3>
Economies of scale refers to the situation where, as the quantity of output goes up, the cost per unit goes down. This is the idea behind “warehouse stores” like Costco or Walmart. In everyday language: a larger factory can produce at a lower average cost than a smaller factory. Figure 2 illustrates the idea of economies of scale, showing the average cost of producing an alarm clock falling as the quantity of output rises. For a small-sized factory like S, with an output level of 1,000, the average cost of production is $12 per alarm clock. For a medium-sized factory like M, with an output level of 2,000, the average cost of production falls to $8 per alarm clock. For a large factory like L, with an output of 5,000, the average cost of production declines still further to $4 per alarm clock.
One prominent example of economies of scale occurs in the chemical industry. Chemical plants have a lot of pipes. The cost of the materials for producing a pipe is related to the circumference of the pipe and its length. However, the volume of chemicals that can flow through a pipe is determined by the cross-section area of the pipe.
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Answer: Bad Debt Expense 28,000 Allowance for Doubtful Accounts 28,000
Explanation:
Account receivable = 300,000
Percentage uncollectible = 10%
Current balance = 2000
Adjustment to allowance for uncollectible accounts is given by :
(Account receivable ×percentage uncollectible) - current balance
(300,000 × 10%) - 2000
(300,000 × 0.1) × 2000
30,000 - 2000 = 28,000
Therefore, adjustment should be :
bad debt expense debit 28,000
allowance for doubful account credit 28,000
Answer: a. Making authorized commitments
Explanation:
Executive Orders 12674 and 12731 (which amended 12674) of 1989 and 1990 respectively, were signed by President Bush with the purpose of setting forth the principles of ethical conduct that were required of Federal Government Officers and Employees.
These principles were meant to ensure that government officials and employees abstained from Abuse of power whilst working in such a way as not to bring disrepute to the Federal Government.
All of the above are violations of the Order except option A which is stated in Part I Section 101 (f) of Executive Order 12674. It reads that, "<em>Employees shall make no unauthorized statements</em>..." thus insinuating that employees are allowed to make Authorized statements.
Management is the big-picture process of making business run smoothly through effective planning, organizing, staffing, training, leading, and controlling the company.
Answer:
Indication of items erroneously stated on:
A) the income statement for the year
Salaries Expense will be understated.
Therefore, the Net Income will be overstated.
B) the balance sheet as of October 31:
Salaries Expense Payable (current liabilities) will be understated.
Explanation:
When accrued salaries are not accounted for in the financial statements for an accounting period, it means that the revenues generated for that period are not being matched with the expenses incurred in generating the revenues. Such omission does not agree with the accrual concept and the matching principle of generally accepted accounting principles. These require that expenses are accrued whether paid for or not, and that expenses are matched to the period's revenue since they are necessarily incurred in generating such revenue.
