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2 years ago

Starting from point e, which point is the outcome of a decrease in the price of a complementary good, holding all else constant?

Business

1 answer:

inn [45]2 years ago

6 0

A decrease in the price of complementary goods will shift the demand curve rightward.

A decrease in the price results in increase in demand for a good. Or a rightward move in the demand curve results an increase in both price and production of a complementary good in an economy.

When the price of a complementary good decreases, the quantity demand for that good increases, but the demand for the good that it is being complemented, decreases.

Complementary Goods refers a negative relationship with each other – which means that when price of the product 'A' increases , demand for product 'B' decreases. when price of product 'A' decreases , demand for product 'B' increases. Because in such a case more people now buy product 'A' because of the lower price. This relationship of complementary goods is known as ’negative cross-elasticity of demand.

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(One Temporary Difference, Tracked for 4 Years, One Permanent Difference, Change in Rate) The pretax financial income of Truttma

Schach [20]

Answer:

Truttman Company

a. Journal Entries:

December 31, 2020:

Debit Income Tax Expense $112,000

Income Tax Payable $63,000

Deferred tax liability $49,000

To record income tax expense for the year.

December 31, 2021:

Debit Income Tax Expense $70,000

Income Tax Payable $112,000

Deferred tax liability $25,000

To record income tax expense for the year.

December 31, 2022:

Debit Income Tax Expense $76,000

Income Tax Payable $52,000

Deferred tax liability $24,000

To record income tax expense for the year.

December 31, 2023:

Debit Income Tax Expense $90,000

Deferred tax asset $22,000

Income Tax Payable $112,000

To record income tax expense for the year.

b. Income Statement for 2021

Year 2021

Pretax Financial Income $320,000

Income tax expense 70,000

Net income $250,000

Explanation:

a) Data and Calculations:

Year Pretax Financial Income Taxable Income Tax Rate

2020 $290,000 $180,000 35%

2021 320,000 225,000 20

2022 350,000 260,000 20

2023 420,000 560,000 20

Year 2020 2021 2022 2023

Pretax Financial Income $290,000 $320,000 $350,000 $420,000

add Nondeductible expense 30,000 30,000 30,000 30,000

Adjusted Pretax Financial $320,000 $350,000 $380,000 $450,000

Taxable Income 180,000 225,000 260,000 560,000

Depreciation temporary

differences $140,000 $125,000 $120,000 ($110,000)

Tax Rate 35% 20% 20% 20%

Income Tax Payable $63,000 $45,000 $52,000 $112,000

Deferred tax liability (asset) 49,000 25,000 24,000 (22,000)

Income tax expense $112,000 $70,000 $76,000 $90,000

6 0

3 years ago

Gallerani Corporation has received a request for a special order of 6,000 units of product A90 for $21.20 each. Product A90's un

Alja [10]

Answer:

The annual financial advantage(disadvantage) for the company as a result of accepting this special order should be $5,400

Explanation:

Company's current variable expenses =

Direct material + Direct labor + Variable manufacturing overhead

= $6.10 + $4.20 + $2.30

= $12.6

Please note that fixed costs will not be included in the computation because they have been incurred. It is also within the capacity of the company to produce additional units hence decision will be on variable cost of ($4.20) per unit and additional mould cost of ($21,000).

Considering that absorption costing is used, normal fixed cost would be included hence total cost of 6,000 units would be = Total variable cost + Fixed cost

Where

Total variable cost = $12.6 + $4.20

= $16.8

Fixed cost = $21,000

Total cost = [$16.8 × 6,000] + [$21,000]

= $100,800 + $21,000

= $121,800

Revenue from 6,000 units would be

= $21.20 × 6,000

= $127,200

Net result = $127,200 - $121,800

= $5,400

The project should be accepted since there is a positive result with a financial leverage of $5,400

6 0

4 years ago

After graduating this May, Dale is planning on buying a new Ferrari for $250,000. He decides to finance his new car with a 5 yea

jek_recluse [69]

Answer:

c) $18,986

Explanation:

The computation of the payment of principal is shown below:

= Annual payment - (Balance of Principal × interest rate)

= $48,986 - ($250,000 × 12%)

= $48,986 - $30,000

= $18,986

We do not consider the time period. Hence, we ignored it as it is not relevant for the computation part.

We simply multiply the principal balance with the interest rate and then deduct it from the annual payment.

3 0

3 years ago

Sales and Production Budgets Ultimate Audio Company manufactures two models of speakers, U500 and S1000. Based on the following

mixas84 [53]

Answer:

Part a

Ultimate Audio Company

Sales Budget

For the Month Ending June 30

Product and Area Unit Sales Volume Unit Selling Price Total Sales

Model U500 :

Northeast Region 140,000 $45 $6,300,000

Southwest Region 160,000 $45 $7,200,000

Total $13,500,000

Model U500 :

Northeast Region 100,000 $80 $8,000,000

Southwest Region 125,000 $80 $10,000,000

Total $18,000,000

Total Revenue from Sales $31,500,000

Part b

Ultimate Audio Company

Production Budget

For the Month Ending June 30

Model U500 Model S1000

Expected Units to be Sold 300,000 225,000

Add Desired Closing Inventory 30,000 15,000

Total 330,000 240,000

Less Desired Opening Inventory (25,000) (10,000)

Total Production 305,000 230,000

Explanation:

Note : I have attached the complete question as images below !

A Sales Budget shows the Total Expected Revenue from sale of budgeted units.

Total Revenue = Total Expected Units Sales x Selling Price Per Unit

A Production Budget shows the number of units to be produced to meet the Sales and Inventory targets

Total Production = Expected Sales + Desired Closing Inventory - Desired Opening Inventory

5 0

3 years ago

Aguilera acoustics, inc., (aai) projects unit sales for a new seven-octave voice emulation implant as follows:

Andrew [12]

Answer:

NPV = $ 3,969,921.84

IRR = 23.94%

Explanation:

As the values are not given so i searched and found a similar question. i am using those values.

using formulas:

Cash Flows = Net Income + Depreciation + Investment + NWC + After-tax Salvage value

NPV = NPV(rate, CF1...CF5) - CF0

IRR = IRR(values)

It requires a table for it to be solved easily and efficiently so i am putting a screen shot of a word file on which i have solved the question. the question and its values are also given in screenshots.

4 0

3 years ago