Answer:
B. The khaki pants
Explanation:
Opportunity cost is the benefits forfeited as a result of choosing one item or activity over the other. It the value of the next best alternative of choice made.
Opportunity costs arise because people have to make choices every day. Choosing an item over others implies sacrificing the benefits of the others. The value or cost of the sacrificed item represents the opportunity cost.
Khaki pants are the opportunity cost. Kyla is comfortable with either blue jeans or khaki pants. He does not like black jeans. His alternatives are khaki pants or Blue jeans. Choosing blue jeans implies forfeiting khaki pants. The khaki pants are the best alternative that was missed.
FOR:
- increased income for workers
- more workers attracted to the workforce
- less strain on federal resources for those in poverty
Against
- more costly for businesses
- possible unemployment due to job automation
- higher prices for consumers.
Here are some basic arguments. You will need to explain these a bit more for your assignment though.
Answer:
1. Why is this an operating lease for Child Company?
The life of the asset is 10 years while the lease is only 3 years long, so it cannot be classified as a financial lease.
2. What are the amounts of the right-of-use asset and lease liability that Child Company should report on its balance sheet at December 31, 20X1?
annual lease payment = $128,000 (ordinary annuity)
PVIFA, 9%, 3 periods = 2.5313
present value = $128,000 x 2.5313 = $324,006.40
3. How much lease expense should Child Company recognize in 20X1?
lease expense = PV of lease x interest rate = $324,006.40 x 9% = $29,160.58
Answer:
a) Contribution from the special order= $52,640.
b) Stuart should accept the order
Explanation:
The amount of contribution to profit from the special order is the difference between the revenue and the relevant cost of variable cost of the special order.
The relevant cost of the special order is equal the sum of all variable cost only.
Note that the allocated facility overhead is irrelevant to whether to accept or reject the order. This is so because the costs would still be incurred either way.
Relevant variable costs of special order = (880 + 510) × 47 = $65,330
Sales revenue = 2,510 × 47 = $117,970.00
Contribution from the special order =$117,970.00 - $65,330
= $52,640.00
B) Stuart should accept the special order because it would increase its profit by $52,640.
Answer:
Salespersons will be motivated to sell more wake boards as they will create a higher commission per unit for them.
The company would rather see more skis sold as it creates the higher profit per unit for the company.
Explanation:
As from the company's perspective the sales of skies shall be more, as it offers higher revenue per unit, in form of higher contribution than that of boards per unit, the company estimates to sell more of these units.
Further, as the sales commission is based on the price of article sold, and boards have higher selling price,
As sales commission is to be earned by individual acting as agent will sell more units of boards to get higher commission.
