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3 years ago

How do economists calculate GDP for one year using the expenditure approach?

1 answer:

3 0

The expenditure method is the most widely used approach for estimating GDP, which is a measure of the economy's output produced within a country's borders irrespective of who owns the means to production. The GDP under this method is calculated by summing up all of the expenditures made on final goods and services.

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On January 2, year 1, Lava, Inc. purchased a patent for a new consumer product for $90,000. At the time of purchase, the patent

Archy [21]

Answer:

The amount Lava should charge against income during year 4 is $63,000.

Explanation:

Since amortization is assumed to be recorded at the end of each year, this can be calculated as follows:

Annual amortization expense = Cost of the patent / Patent's estimated useful life = $90,000 / 10 = $9,000

Amortization expense recorded prior to year 4 = Annual amortization expense * 3 years = $9,000 * 3 = $27,000

Unamortized cost of patent charge against income during year 4 = Cost of the patent - Amortization expense recorded prior to year 4 = $90,000 - $27,000 = $63,000

Therefore, the amount Lava should charge against income during year 4 is $63,000.

4 0

2 years ago

More Hits Company manufactures aluminum baseball bats that it sells to university athletic departments. It has developed the fol

yuradex [85]

Answer: See explanation

Explanation:

AP = 4.15

SP = 4.0

SQ = 114000 × 2 = 228000

1. Direct Materials Price

= (AQ × AP) - (AQ × SP)

= (246000 × 4.15) - (246000 × 4.0)

= 1020900 - 984000

= 369000 U

2. Direct Materials Quantity

= (AQ × SP) - (SQ × SP)

where SQ = 114000 × 2 = 228000

= (220000 × 4.0) - (228000 × 4.0)

= 880000 - 912000

= 32000 F

3. Direct Labor Price

= (AH × AR) - (AH × SR)

= (58700 × 9.8) - (58700 × 10)

= 575260 - 587000

= 11740

4. Direct Labor Quantity

= (AH × SR) - (SH × SR)

where, SH = 114000 × ½ = 57000

= (58700 × 10) - (57000 × 10)

= 587000 - 570000

= 17000 U

5. Total Overhead Variances

= 352000 - (57000 × 6)

= 352000 - 342000

= 10000 Unfavorable

Check attachment for further details

8 0

2 years ago

At a recent family gathering you overheard your two brothers debating the merits of their vacation savings plans. Kyle, your you

Oliga [24]

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5 0

2 years ago

Keller Cosmetics maintains an operating profit margin of 7% and asset turnover ratio of 4.

Stels [109]

Answer:

a) 28%

b) 56%

Explanation:

Data provided in the question:

Operating profit margin = 7%

Asset turnover ratio = 4

Now,

a) ROA = Profit margin × Asset turnover ratio

= 7% × 4

= 28%

b) Given:

Debt-equity ratio = 1

Interest payments = $8,200

Taxes = $8,200

EBIT = $21,000

Now,

Total assets = Net income ÷ ROA

Also,

Net income = EBIT - tax - interest

= $21,000 - $8,200 - $8,200

= $4,600

Thus,

Total assets = $4,600 ÷ 28%

= $16428.57

also,

Total assets = Debt + Equity

Total assets = Equity × ( $\frac{\textup{Debt}}{\textup{Equity}}+1$ )

$16428.57 = Equity × ( 1 + 1 )

=> Equity = $8214.28

Therefore,

ROE = Net income ÷ Equity

= $4,600 ÷ $8214.28

= 56%

4 0

2 years ago

If Glass Inc. produces 80 window panes per day at the market price of $60 in a perfectly competitive market, what would happen t

Verdich [7]

Answer:

Price will not change

Explanation:

A perfectly competitive market is a market where there are many firms that produce and sell similar products, no barriers to entry and exist, all firms are price takers and none of the firms is big enough or has the power to influence the market or change the price in the market.

The implication is that a firm can decide to increase its output to any level in perfectly competitive market market, but this increased out can only be sold at the market price which it has no power to change.

Therefore, if Glass Inc. Glass Inc. increases production to 120 window panes from 80, the price will still remain at $60, every other thing remain constant.

I wish you the best.

8 0

3 years ago