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amid [387]
3 years ago
8

Which of the following statements is definitely true when price is less than average total cost for a firm producing the profit-

maximizing level of output in the short run?
a. The firm will be earning negative total revenue.
b. The firm is running a loss in an accounting sense, so that total revenue is less than total explicit costs.
c. The firm is incurring an economic loss.
d. The firm will minimize its losses by shutting down.
Business
1 answer:
Flauer [41]3 years ago
7 0

Answer:

d. The firm will minimize its losses by shutting down.

Explanation:

The price multiplied the number of output is the revenue, which is less than the total cost as in this scenario. So this company is always lost.

Lost = number units x (cost – price)

The lost is as high as the number of unit produced.

Given the company do not have any room to improve the profit as it’s producing the profit-maximizing level of output; it’s the best for this firm to shut down.

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Cotton White, Inc., makes specialty clothing for chefs. The company reported the following costs for 2018: Factory rent $ 36,100
salantis [7]

Answer:

1) Direct materials=$43070

2)Direct labor=$126300

3)Manufacture overhead=$117600

4)Total manufacturing cost=$286970

5)Prime cost=$169370

6)Conversion costs = 126300+117600= $243900

7)Total period cost= $418670

Explanation:

The company reported the following costs for 2018:

1) Direct materials

Thread 1,020

Premium quality cotton material 41,300

Buttons 750

Total= $43070

2)Direct labor

Wages paid to seamstresses 76,200

Wages paid to cutters 50,100

Total= $126300

3) Manufacture overhead

Factory rent $ 36,100

Utilities for factory 24,600

Cutting room supervisor's salary 31,300

Factory insurance 19,100

Depreciation on sewing machines 6,500

Total= $117600

Notice that marketing, Depreciation on salespersons' vehicles and president's salary are not part of manufacturing overhead.

4)Total manufacturing cost=$43070+126300+117600=$286970

5)Prime cost= direct material + direct labor=43070+126300=$169370

6)Conversion costs = Direct labor + Manufacturing overhead= 126300+117600= $243900

7)Total period cost= manufacturing cost + Company advertising + Depreciation on salespersons' vehicles + President’s salary

Total period cost= 286970 + 24200 + 30600 + 76900= $418670

7 0
3 years ago
On July 1, 2021, Markwell Company acquired equipment. Markwell paid $185,000 in cash on July 1, 2021, and signed a $740,000 noni
Alenkasestr [34]

Answer:

c. Debit: Discount on notes payable, $41,884.

Explanation:

The journal entry is shown below:

Equipment    $883,116  

Discount on Notes payable $41,884  ($740,000 - $698,116)

        To Notes payable       $740,000  

        To Cash                       $185,000

(Being the amount paid in cash and note payable is recorded)

Working note

= Note payable amount × PVF factor at 6% for one year

= $740,000 × 0.94340

= $698,116

For recording this we debited the equipment as it increased the assets and discount is always debited while the note payable and cash is credited as it increased the liabilities and reduced the assets

7 0
3 years ago
What is a main problem with determining the social benefits of a public good like a community fireworks show?
nexus9112 [7]
The main problem will arise when it has to be with converting the public good to numbers where it can be interpreted and studied. The number of people can also be something difficult to deal with because it deppends on the distance of the people seeing the fireworks show and if the distance is ok for the number of people looking at the fireworks
8 0
3 years ago
What are the constraints of business legislation?
Reika [66]

Answer:

A business may be constrained by a variety of licensure and other regulatory requirements, based on the industry and activities the business wants to pursue. For example, a lawyer must obtain a legal license in a particular state before he can open a practice in that state.

6 0
3 years ago
The following information was taken from the bank reconciliation for Mooner Sooner Inc. at the end of the year:
Lunna [17]

Answer:

The correct cash balance that should be reported in Mooner Sooner's balance sheet at the end of the year is $5,800.

Explanation:

For adjusting the bank statement balance do not consider note collected by the bank, service fee and NSF check returned. Note collected by the banks are already recorded in the bank passbook, so there is no adjustments are needed in the bank statement. Service charge is deducted by the bank, so service charge also recorded in bank passbook; hence no adjustments are required in the bank statement balance. In the case of NSF check returned no adjustments are needed in the bank statement balance.

correct bank balance = Bank balance + Deposits outstanding - Checks outstanding

                                    = $9,000 + $4,600 - $7,800

                                     = $5,800

MAKE SURE YOU AVOID THIS:

For calculating correct cash balance only checks outstanding and deposits outstanding are adjusted with bank balance. For getting correct cash balances add deposit outstanding to the balance as per the bank and minus outstanding checks. Deposit in transit amount must be added to the bank side of the bank reconciliation statement and outstanding check must be deducted from the bank side of the bank reconciliation statement. Here, bank balance is $9,000, checks outstanding are $7,800 and deposits outstanding is $4,600, hence correct cash balance is $5,800.

Therefore, The correct cash balance that should be reported in Mooner Sooner's balance sheet at the end of the year is $5,800.

3 0
3 years ago
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