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oksano4ka [1.4K]
3 years ago
15

A firm's average cost increases as it increases its output by expanding its plant and hiring additional workers (its only inputs

to production). The firm's owner blames the increase in per-unit costs on the law of diminishing marginal productivity. The owner's reasoning is:
Business
1 answer:
KiRa [710]3 years ago
7 0

Answer:

The correct answer is letter "D": incorrect because all inputs are varied in the example.

Explanation:

The law of Diminishing Marginal Productivity states that increasing one variable will keep the others the same. My initially increase output but eventually adding more of that one variable may lead to a diminishing rate of return. The law helps explain why increasing production is not always the best way to increase profits.

The law of Diminishing Marginal Productivity only applies when certain inputs are fixed, but in this example, the amount of labor available varies since it is increasing.

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On September 1, ABC Company borrowed $50,000 on a 6%, 9-month note payable to XYZ National Bank. Given no previous adjusting ent
scZoUnD [109]

Answer:

c. debit to Interest Expense of $1,000.

Explanation:

The adjusting entry is as follows:

Interest expense Dr ($50,000 × 6% × 4 months ÷ 12 months) $1,000

     To Interest payable $1,000

(Being the interest expense is recorded)

Here interest expense is debited as it increased the expense and credited the interest payable as it also increased the liabilities

Therefore the correct option is c.

7 0
3 years ago
The closing process is necessary in order to
goldfiish [28.3K]

Answer:

The closing process is necessary in order to confirm that net income or net loss and owner withdrawals for the period are closed into the owner's capital account.

Explanation:

Most economies around the world follow a specific accounting period which is commonly referred to as financial year or tax year. Before a new financial year begins, the accounts from the ongoing financial year have to be closed legitimately through a process called the 'closing process'. This process culminates in confirming that the net income secured or the net loss bore by the owner is included in no other account than the owner's capital account.

In order to carry out the closing process, the accountant has to commence with identifying the accounts that are required to be closed with or before the ending of the predefined financial period. He then has to record the last entries in these accounts as 'closing entries'. Once the accounts are closed, he has to calculate the trial balance and interpret the outcome. Closing of temporary accounts through a valid closing process dispenses the ease of calculating profit and loss in any given financial period coming to end.

5 0
3 years ago
Ashley received a scholarship to be used as follows:___________tuition $6,000; room and board $9,000; and books and laboratory s
mojhsa [17]

Answer:

A) True THE CORRECT ANSWER

Explanation:

3 0
3 years ago
Rivera Company manufactured two products, A and B, during April. For purposes of product costing, an overhead rate of $2.00 per
OlgaM077 [116]

Solution :

a). The assigned total cost is :

$A =\$ \ 8000$

$B =\$ \ 24,000$

Total overheads                                 $ 500,000

Total hours                                             250,000

Plantwide overhead rate                        $ 2

Cost assigned to :

A ( 2 x 4 x 1000)                                   $ 8,000

B ( 2 x 4 x 3000)                                  $ 24,000

b).                                                      Department 1         Department 2

Overheads                                       $ 300,000                 $ 200,000

Hours                                                   200,000                       50,000

Overhead rate                                 $ 1.50                           $ 4.00

Overheads for the product A                        $ 8,500

  (1.5 x 3 + 4 x 1) x 1000

Overheads for the product B                        $ 40,500

  (1.5 x 3 + 4 x 1) x 3000

c).                                                          Plant wide          Departmental

material and labor                                  $ 10                        $ 10

overheads                                               $ 8                         $ 13.50

Total                                                         $ 18.00                  $ 23.50

Add: profit                                                $ 7.20                    $ 9.40

Selling price                                             $ 25.20                 $ 32.90

The difference               $ 7.70

Therefore, the increase in the selling price = $ 7.70

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