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worty [1.4K]
3 years ago
15

The law of diminishing marginal returnsa. explains why the average total cost, average fixed cost and marginal cost curves are U

-shaped in the short runb. causes average total costs to rise at a decreasing rate as output increasesc. explains why the average total cost and marginal cost curves are U-shaped in the short rund. causes the difference between average total cost and average variable cost to get smaller as output increases
Business
1 answer:
Novosadov [1.4K]3 years ago
8 0

Answer:

c) explains why the average total cost and marginal cost curves are U-shaped in the short run.

Explanation:

According to the law of diminishing returns, when one input variable is increased, the result is seen in the increase in the output. At some point in the production, when an additional factor is added, the output increases but in smaller return. One factor remains fixed in the process of diminishing return. The variable factor is increased at any point of production which do not prove much productive.

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The adjusted trial balance for Chiara Company as of December 31 follows.
faust18 [17]

Answer and Explanation:

The preparations are presented below:

a. For income statement

<u>                                          Chiara Company</u>

<u>                                           Income statement</u>

<u>                                      For the year ended Dec 31</u>

Revenues

Fees earned                  $544,000

Interest earned              $30,000

Total revenues                                                              $574,000

Less: expenses

Depreciation expense - Automobiles   $26,000

Depreciation expense- Equipment       $20,000

Salaries expense                                    $187,000

Wages expense                                      $43,000

Interest expense                                    $32,200

Office supplies expense                        $34,200

Advertising expense                              $63,000

Repairs expense - Automobiles           $25,200

Total expenses                                                         ($430,600)

Net income                                                                $143,400

b. For a statement of retained earnings

<u>                                          Chiara Company</u>

<u>                                          Statement of retained earnings</u>

<u>                                            For the year ended Dec 31</u>

Beginning balance of retained earnings $257,220

Add: Net income                                        $143,400

Less: Dividend                                            -$45,000

Ending retained earnings balance              $355,620

c. For balance sheet

<u>                                          Chiara Company</u>

<u>                                        Balance sheet </u>

<u>                                        For the year ended Dec 31</u>

<u>Liabilities & equity            Amount                         Assets          Amount </u>

Liabilities & equity                                              Cash               $132,400

Accounts payable            $98,000          Accounts receivable $50,500

Interest payable               $20,000          Interest receivable $20,800

Salaries payable               $22,000         90 days notes receivable $171,000

Unearned fees                  $28,000         Office supplies              $16,500

Long-term notes payable $144,000       Automobiles 169,000

Common stock                  $26,580        Less:

Retained earnings             $355,620   Accumulated depreciation  

                                                               Automobiles $ 80,000         $89,000

Total liabilities & equity    $694,200  Equipment 140,000

                                                               Less:                                      

                                                               Accumulated depreciation

                                                                Equipment 23,000             $117,000

                                                                Land                                    $79,000

                                                                Total assets                        $694,200

3 0
3 years ago
Manufacturing reports the following data for the month: Purchases of raw materials, on account $55,250 Materials requisitions: D
xxMikexx [17]

Answer:

Journal 1

Direct Materials $49750 (Debit), Indirect Materials $3700,(Debit)  Direct labor $ 51000 (Debit), Indirect labor $ 2500 ( Debit), Manufacturing Overhead Account $106960 (Credit)

Journal 2

Manufacturing Overhead Account $106960 (Debit), Accounts Payable $106960

Explanation:

Journal 1

Materials and Labor (both direct and indirect) resource acquired shows an accumulation of resources needed for manufacturing process.

Therefore these resources are being recorded in their respective accounts and transferred to manufacturing overhead account.

Journal 2

Both materials and Labor acquired for manufacturing process are still owing.The journal represent a present obligations in settlement of the Manufacturing overhead (Both for Materials and Labor)

7 0
3 years ago
A bank run involves:
Aleonysh [2.5K]

Answer:

The correct answer is letter "B": large numbers of depositors withdrawing their deposits within a short period of time.

Explanation:

A bank run is a situation in which account holders massively withdraw their funds under the fear the financial institution will lose its liquidity. The situation gets to a point in which the bank is at risk of sensing all its reserves and fail to provide all its clients the money they deposited.

In the U.S. financial institutions with deposits between $16 and $122.3 million must have a minimum reserve of 3%. When the deposits exceed $122.3 million the minimum reserve increases to 10%. The rest of the money is reinvested by banks.

5 0
3 years ago
Economic cost can best be defined as: (a) any contractual obligation that results in a flow of money expenditures from an enterp
Andreas93 [3]

Answer:

(d) all costs exclusive of payments to fixed factors of production.

Explanation:

The cost involved in the first three options is considered by economists as accounting cost. Economic cost involves the accounting cost, but it is added to the opportunity cost, which is the remuneration that an economic agent fails to receive for practicing one economic activity and not another.

For example, a business owner has fixed production costs, but it should add to his opportunity cost to be working in that firm rather than another economic activity.

8 0
3 years ago
If the amount realized at a Sheriff's sale upon a delinquent mortgage is more than the indebtedness, the excess belongs to:_____
timofeeve [1]

Answer: The mortgagor

Explanation:

If the amount realized at a Sheriff's sale upon a delinquent mortgage is more than the indebtedness, the excess belongs to the mortgagor.

It should be noted that the mortgagor is the borrower, therefore he or she is the person that is entitled to the excess received upon the sake of the asset.

4 0
4 years ago
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