Answer:
None of the options is correct.
Explanation:
In a perfectly competitive market a company will shut down in the short run if its product's price is less than the variable cost (total revenue is less than total variable costs).
Since all the companies are price takers in a perfectly competitive market, then the company cannot increase their prices, so they will temporarily shut down until the equilibrium price increases above its variable cost.
Answer:
False
Explanation:
The specific identification inventory method involves assigning of specific cost of inventory to the cost of goods sold. Cost of each item that makes up inventory must be tracked.
This is often used for large assets such as furniture or cars. The items also usually have differing characteristics.
For example if a dealer has 20 cars, he will track each of them from delivery till when he sells the cars.
This method is not used when the items involved are low cost items that are sold frequently and have identical characteristics.
Answer:
According to IFRS any cost that is associated with bringing the asset into use is capitalized. If the management intend is to use the island and then restore it to the current state and repair any damages costs it can be capitalized. This is only possible if the expense can be reliably measured before the asset use and it is only for the purpose of asset usage. If the company intends to consider it as a social responsibility activity then it must expense it out instead of capitalizing it. In IAS 16 of IFRS it only gives options to capitalize the dismantling cost when the cost is associated with the use of asset. For marketing and social responsibility purposes if the repair is undertaken then the cost cannot be capitalized.
Explanation:
West Ltd has planned to increase its business by fishing of tuna near the Steve Irwin which is an island in the Australia. The extended fishing could cause damage to the island as it will disrupt whalers but the company plans to repair any damages caused by its activities. The cost cannot be capitalized as it is for marketing purposes.
Some oil companies drill for their oil crude oil because they can afford it and a certain stage it adds more value to their business. Furthermore, it's a way of controlling a larger segment of the industry and being less dependent of the uncertainties linked with the supply segment. Other companies which don't drill on their own can't generally afford it. Or it may be that they deem it better for their business to only focus on distribution.
Answer:
9,040.54 yards
Explanation:
Input material amount I = 9,816 yards
Productivity P = 92.10%
Let Output Material amount be O
O = I * P
O = 9,816 yards * 0.9210
O = 9040.536
O = 9040.54 yards
So, the unit of yards they will have to produce from the same amount of material input is 9,040.54 yards
