Answer:
Sunk costs.
Explanation:
Sunk costs refers to historical funds spent or incurred that cannot be recovered. Such costs are considered irrelevant during decision making which impacts on the business's future as they present no influence on present or future prospects.
Example
ABC investors decide to acquire land and develop residential houses at a location X. This decision is informed on the fact that the government had recently enacted a policy that led to an increase in demand for residential properties in that location. 6 months into construction of the residential houses, the government reviews and rescinds the policy. This leads to a sharp decline in property values in location X. ABC investors had already incurred 10 million dollars in the project. The 10 million dollars is considered sunk cost.
Sunk costs are the opposite of relevant costs because they can't be changed or recovered, as they've been spent or contracted in the past already. Hence, relevant cost are relevant for decision-making purposes but not sunk costs.
Hence, money that has been or will be paid regardless of the decision whether to proceed with the project is sunk costs.
The correct option is: For each unit of the good that is sold, buyers bear <u>one-half of the tax burden and sellers bear one-half of the tax burden.</u>
<u>Explanation</u>:
Incidence of tax is a term referred in economics which deals with division of taxes. Tax incidence refers to division of tax among the buyer and seller for a product. The tax incidence is related to the price elasticity of supply and demand.
When a product is sold, the buyer of the product is charged with one-half of the tax burden and the seller of the product bears the other-half of the tax burden.
The incidence of tax can be observed in two ways:
i) Formal incidence
ii) Effective incidence
Answer:
$1.236= Estimated manufacturing overhead rate
Explanation:
Giving the following information:
Processing:
Direct labor cost= $44,500
Applied overhead= $55,000
To determine the estimated overhead rate, we need to use the following formula:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
55,000= Estimated manufacturing overhead rate*44,500
55,000/44,500= Estimated manufacturing overhead rate
$1.236= Estimated manufacturing overhead rate
Answer:
B) 280,000; 200,000
Explanation:
Assets = Liabilities + Shareholder Equity
Assets:
Cash $50,000
Accounts receivable $80,000
Inventory $100,000
Gross P&E $730,000
<u>depreciation ($130,000)</u>
total = $830,000
Liabilities:
Accounts payable $12,000
Notes payable $50,000
<u>Long-term debt $218,000 </u>
total = $280,000
Equity = $830,000 - $280,000 = $550,000
Common stock $100,000
Add. paid-in capital $250,000
Retained earnings = $550,000 - $100,000 (common stock) - $250,000 (APIC) = $200,000
<span>Business organizations I bet. Hope this helps. :)</span>
