Answer: Option (b) is correct.
Explanation:
Economics of scale occurs when a firm's long run average total costs decreases as there are more number of units produced.
Basically, economics of scale is a cost advantage that is experienced by the firms or companies by increasing the level of production.
This is happened because of the indirect relationship between the per unit fixed cost and output level. The larger the output produced results in lower per unit fixed cost.
There are two types of economies of scale that are internal and external economies of scale.
Answer:
Find the difference of 67.2 and 23.9.
Explanation:
Question
The question is incomplete, hence the tutor added a piece of information
The Corporation applies manufacturing overhead on the basis of machine-hours. The predetermined overhead rate is $14 per machine-hour. What amount would be
Assuming the actual machine hours worked is 3,500
<em>Note the actual machine was added by the tutor</em>
Answer:
Applied overhead =$49,000
Explanation:
<em>Overheads are charged to units produced by the means of an estimated overhead absorption rate. This rate is computed using budgeted overhead and budgeted activity level. </em>
<em>Pre-determined overhead absorption rate (POAR) = Budgeted overhead/Budgeted machine hours</em>
The POAR is given as $14 per machine hour
Applied (absorbed) overhead = POAR × Actual machine hours
Applied overhead = $14 × 3,500 =$49000
Applied overhead =$49,000
Answer:
It would decrease
Explanation:
Return on equity is an example of a profitability ratio.
Profitability ratios measure the ability of a firm to generate profits from its asset
Using the Dupont formula, ROE can be determined using:
ROE = Net profit margin x asset turnover x financial leverage
ROE = (Net income / Sales) x (Sales/Total Assets) x (total asset / common equity)
If profit margin reduces and asset turnover and leverage remains the same, ROE would decrease
Answer:
$20,670
Explanation:
Firm A Firm B
Actual Dumping 157 183
Pollution Permits Allotted <u> 11 </u> <u> 11 </u>
Reduction Required 146 172
Cost of Dumping 1 ton $160 $65
As the cost of dumping to Firm A is $160 which is higher than the marginal cost of dumping of Firm B which is $65, so it is better that Firm B take benefit from it by selling it at $65. So now total tons require dumping is 318 tons (146 + 172).
Total cost of reducing pollution = 318 tons * $65 = $20,670
