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Andrei [34K]
3 years ago
8

Linda's Autoplex performs oil changes on automobiles, light trucks, and sport utility vehicles. She is a profit maximizing busin

ess owner whose firm operates in a competitive market. The marginal cost of an oil change is $10. The marginal productivity of the last worker that Linda hired was 1.5 oil changes per hour. What is the maximum hourly wage that Linda was willing to pay the last worker hired?
a. 510
b. 515
c. 520
d. 530
Business
1 answer:
madam [21]3 years ago
3 0

Answer:

$15 per hour

Explanation:

In order for a profit maximizing firm to operate in a competitive market, the marginal revenue product (MRP) must be equal to the marginal cost (MC).

MRP = 1.5 oil changes per hour x $10 per oil change = $15

since MRP = MC, then Linda should pay her worker a maximum of $15 per hour.

No option is even close, they are all over $500 and that is way off limits.

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Ornaments, Inc., is an all-equity firm with a total market value of $608,000 and 27,300 shares of stock outstanding. Management
Stels [109]

Answer:

The EPS in recession is $1.546 per share.

Explanation:

The earnings per share or EPS is a function of net income divided by the number of shares outstanding. The earnings per share calculates the dollar return per share that is earned in a year.

Earnings per share = Net Income / No of common shares outstanding

Where, Net Income = EBIT - Interest - Tax

The EBIT in recession will be = 86600 * (1-0.25) = $64950

The company is all equity financed so there is no interest cost.

Net Income in recession will be = 64950 - (64950 * 35%)  =  $42217.5

Thus, EPS in recession = 42217.5 / 27300  =  $1.546 per share

3 0
3 years ago
If _________ is constrained, we should __________ the staffing level to lower capacity.
Goryan [66]
 Capacity is constrained when demand exceeds supply and the flow rate is equal to process capacity. The capacity constraint<span> is a factor that prevents a business from achieving more output. </span><span>
If capacity is constrained, we should raise the staffing level to lower capacity.</span>
4 0
3 years ago
2 Points
Serhud [2]

Answer:

The minimum wage

Explanation:

5 0
3 years ago
Glenn sells a piece of equipment used in his business for $31,500 during 2019. The equipment was purchased on July 1, 2017, at a
Schach [20]

Answer:

A gain of $16,100

Explanation:

When the amount received from the disposal of an asset is higher than the carrying value of the asset, the company makes a gain on disposal.

The carrying amount of an asset is the difference between the cost of the asset and the accumulated depreciation of the asset.

Carrying amount

= $22,000 - $6,600

= $15,400

Gain/(loss) on sale of asset

= $31,500 - $15,400

= $16,100

6 0
3 years ago
"Ayres Services acquired an asset for $80 million in 2021. The asset is depreciated for financial reporting purposes over four y
Zepler [3.9K]

a. The cumulative temporary book-tax difference for the depreciable asset are as follows:

December 31, 2021 = $60 million

December 31, 2022 = $40 million

December 31, 2023 = $20 million

December 31, 2024 = $0

b. The balance to be reported in the deferred tax liability account are as follows.

December 31, 2021 = $15 million

December 31, 2022 = $10 million

December 31, 2023 = $5 million

December 31, 2024 = $0

Explanation:

Note: See the attached excel file for the calculation of cumulative temporary book-tax difference for the depreciable asset and the balance to be reported in the deferred tax liability account for December 31 of years 2021, 2022, 2023 and 2024 in bold red color.

In the attached excel file, the following formula are used:

Cumulative Temporary differences at December 31 of the current year = Cumulative Temporary differences at December 31 of the previous year + (Depreciation on the tax return at December 31 of the current year - Depreciation on the income statement at December 31 of the current year)

Balance to be reported in deferred tax liability account at December 31 of the current year = Cumulative Temporary differences at December 31 of the current year * Tax rate

8 0
3 years ago
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