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4 years ago

An inferior good is best defined as a product for which the:

1 answer:

8 0

As a term in economics, "inferior goods" are those whose quantity of demand becomes less when the income generated by the consumers become more or increased. This is an opposite of the "normal goods" whose quantity or demand increases as the generated income of the populace is increased. These goods are those which are substitute only of much more expensive goods and are patronize only when the income is less.

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Exercise 6-4A Calculate inventory amounts when costs are rising (LO6-3) [The following information applies to the questions disp

VladimirAG [237]

Answer:

1. Ending inventory = $2,408; Cost of goods sold = $16,837; Sales revenue = $22,770; and Gross profit = $5,933.

2. Ending inventory = $2,094; Cost of goods sold = $17,151; Sales revenue = $22,770; and Gross profit = $5,619.

3. Ending inventory = $2,293; Cost of goods sold = $16,952; Sales revenue = $22,770; and Gross profit = $5,818.

Explanation:

Note: This question is not complete. The complete question is therefore presented before answering the question. See the attached pdf file for the complete question.

Explanation to the answer is now presented as follows:

1. Using FIFO, calculate ending inventory, cost of goods sold, sales revenue, and gross profit.

Note: See part 1 of the attached excel for the calculation of calculation of Cost of goods available for sale, Cost of goods sold, and Ending inventory using FIFO.

First In, First Out (FIFO) refers to an inventory accounting method in which inventory items purchased first are sold first, while the one that are purchased last are sold last.

In the attached excel file, since the inventory purchased on Oct. 6 is purchased last, the number of unit of inventory purchased on Oct. 6 sold is calculated by deducting the sum of the beginning inventory and inventory purchased before Oct. 6 from the total inventory sold as follows:

Number of unit of inventory purchased on Oct. 6 that are sold = Number of units sold - (Beginning inventory + Apr. 7 Purchases + Jul. 16 Purchases) = 414 - (45 + 125 + 195) = 49

Therefore, the number of ending inventory is obtained as follows:

Number of unit of ending inventory = Number of inventory purchased on Oct. 6 - Number of inventory purchased on Oct. 6 sold = 105 – 49 = 56

Sales revenue = Number of unit units of inventory sold for the entire year * Selling price per unit = 414 * $55 = $22,770

From the attached excel file, we have:

Cost of goods sold = $16,837

Ending inventory = $2,408

Therefore, we have:

Gross profit = Sales revenue - Cost of goods sold = $22,770 - $16,837 = $5,933

2. Using LIFO, calculate ending inventory, cost of goods sold, sales revenue, and gross profit.

Note: See part 2 of the attached excel for the calculation of calculation of Cost of goods available for sale, Cost of goods sold, and Ending inventory using LIFO.

Last In, First Out (LIFO) refers to an inventory accounting method in which inventory items purchased last are sold first, while the one that are purchased first are sold last.

In the attached excel file, the number of unit of inventory purchased on April 7 that are sold and the ones remaining that are NOT sold that forms part of ending inventory are calculated as follows:

Number of unit of inventory purchased on April 7 that are sold = 414 – (195 + 105) = 114

Number of unit of inventory purchased on April 7 that are NOT sold = Number of unit of inventory purchased on April 7 - Number of unit of inventory purchased on April 7 that are sold = 125 – 114 = 11

Sales revenue = Number of unit units of inventory sold for the entire year * Selling price per unit = 414 * $55 = $22,770

From the attached excel file, we have:

Cost of goods sold = $17,151

Ending inventory = $2,094

Therefore, we have:

Gross profit = Sales revenue - Cost of goods sold = $22,770 - $17,151 = $5,619

3. Using weighted average cost, calculate ending inventory, cost of goods sold, sales revenue, and gross profit. (Round "Average Cost per unit" to 4 decimal places and all other answers to the nearest whole number.)

Note: See part 3 of the attached excel for the calculation of calculation of Cost of goods available for sale, Cost of goods sold, and Ending inventory using weighted average cost.

Weighted average cost method refers to a method of costing inventory in which the total cost of the goods available for sale is divided by the total number of units available for sales in order to obtain weighted average cost per unit.

In the attached excel file, weighted average cost per unit is therefore calculated and rounded to 4 decimal places as follows:

Weighted average cost per unit = $19,245 / 470 = $40.9468

Number of unit of ending inventory = Total number of units available for sales – Number of unit sold = 470 – 414 = 56

Sales revenue = Number of unit units of inventory sold for the entire year * Selling price per unit = 414 * $55 = $22,770

From the attached excel file, we have:

Cost of goods sold = $16,952

Ending inventory = $2,293

Therefore, we have:

Gross profit = Sales revenue - Cost of goods sold = $22,770 - $16,952 = $5,818

Download pdf

8 0

3 years ago

Total (10 marks) QUESTION TWO Amani Ltd. Manufacturers a single product. Currently, the company has eight employees who produce

rewona [7]

Since the unsigned is 3000 it’s

5 0

2 years ago

Marcy owns the company Caps for Kids and sells her hand-knitted caps for $20 each. The variable cost per cap created is $10, and

iragen [17]

At breakeven point, the cost is equal to the revenue. This also means that the net profit is equal to zero. If we let x be the number of units sold or produced, the total costs and revenue are calculated as follows:

Total Cost = 10x + 10,000
Total Revenue = 20x

Equation both,
10x + 10,000 = 20x
The value of x from the equation is 1000.

Answer: 1000

3 0

3 years ago

A tax of €1.00 per litre on petrol

Anni [7]

Answer:

The correct answer is option a.

Explanation:

If a tax worth €1.00 per liter on petrol is imposed it will create a tax wedge of €1.00 between the price the buyers pay and the price the sellers receive.

A tax wedge can be defined as the deviation from the equilibrium price and equilibrium quantity due to the imposition of taxes.

When a tax is imposed on a product, the consumer and producer both have to share the tax burden. The price paid by the consumers increases and the price received by gets reduced.

The quantity of product gets reduced as well.

3 0

4 years ago

What role do individuals play in a capitalist economy. Detailed answer.

AnnZ [28]

Answer:

Capitalism

Explanation:

Private individuals or firms own economic resources and control their use.

Voluntary trade is the mechanism that drives activity in a capitalist system.

The owners of resources compete with one another over consumers, who in turn, compete with other consumers over goods and services.

8 0

4 years ago