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2 years ago

resource prices raise production costs and, assuming a fixed product price, profits.

Business

1 answer:

Paraphin [41]2 years ago

6 0

Higher resource prices raise production costs and, assuming a fixed product price, reduce profit.

<h3>What is the explanation to the above phenomenon?</h3>

When resource inputs are overtly expensive it is logical to expect that these will translate into higher costs. Where costs can be shifted to the end-user, the company remains in a state of operational efficiency.

In a very price elastic market however, the company is faced with a huge challenge as it must absorb such costs or face the consequences of increasing it's prices.

When input costs are high, technology may be explored as a solution to reduce costs and increase efficiency in the long run.

Learn more about resource inputs:
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3 years ago

On January 1 of the current year, Barton Corporation issued 10% bonds with a face value of $200,000. The bonds are sold for $191

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Answer:

a. $21,800

Explanation:

The discoun of issuance of the bond is amortized over the period until maturity. Total Interest expesne on a discounted bond is the sum of the coupon payment and the amortization of the discount amount.

Coupon payment = $200,000 x 10% = $20,000 per year

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3 years ago

Standard rate per direct labor-hour $ 2 Standard direct labor-hours for each unit produced 3 Units manufactured 1,000 Actual dir

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Answer:

Variable overhead efficiency variance= $600 unfavorable

Explanation:

Giving the following information:

Standard rate per direct labor-hour $2

Standard direct labor-hours for each unit produced 3

Units manufactured 1,000

Actual direct labor-hours worked during the month 3,300

<u>To calculate the variable overhead efficiency variance, we need to use the following formula:</u>

<u></u>

Variable overhead efficiency variance= (Standard Quantity - Actual Quantity)*Standard rate

Variable overhead efficiency variance= (1,000*3 - 3,300)*2

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3 years ago

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4 years ago

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3 years ago

______ resource prices raise production costs and, assuming a fixed product price, ______ profits.

resource prices raise production costs and, assuming a fixed product price, profits.