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SSSSS [86.1K]
4 years ago
10

What will happen if a shoe firm sells its shoes at a price lower than the opportunity cost of the inputs used in the production

process?
Business
1 answer:
Maslowich4 years ago
5 0
Had to look for the options and here is my answer. What happens when a shoe firm puts its shoes on sale at a price that is lower than the opportunity cost of the inputs used in the process of production is that the firm will possibly make losses between the accounting and economic aspects. 
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The following selected information is from Princeton Company’s comparative balance sheets. At December 31 2017 2016 Common stock
lukranit [14]

Answer:

Princeton Company

The T-accounts are attached.

Explanation:

They can also be obtained as follows:

1. T-accounts to calculate the Cash received from the sale of its common stock during 2017:

Common Stock & APIC

Closing balance of common stock = $131,000

Closing balance of APIC = $593,000

less Opening balance of common stock = $126,000

less Opening balance of APIC = $355,000

Cash collected = $243,000

2.  T-account to calculate the cash paid for dividends during 2017:

Retained Earnings:

Opening balance = $313,500

Add net income = $61,000

Less closing balance = $339,500

Cash Dividends paid = $35,000

Download xlsx
8 0
3 years ago
g Estimate the cost of common equity for a firm, given the following information. For the next year, the firm plans to pay a div
wel

Answer:

The cost of equity is 12.49 percent

Explanation:

The price per share of a company whose dividends are expected to grow at a constant rate can be calculated using the constant growth model of the DMM. The DDM bases the price of a stock on the present value of the expected future dividends from the stock. The formula for price today under this model is,

P0 = D1 / r - g

Where,

  • D1 is the dividend expected for the next period
  • r is the cost of equity
  • g is the growth rate in dividends

As we already know the P0 which is price today, the D1 and the growth rate in dividends (g), we can plug in the values of these variables in the formula to calculate the cost of equity (r)

100.81 = 8.76 / (r - 0.038)

100.81 * (r - 0.038) = 8.76

100.81r  -  3.83078 = 8.76

100.81r  =  8.76 + 3.83078

r = 12.59078 / 100.81

r = 0.12489 or 12.489% rounded off to 12.49%

6 0
3 years ago
A company's flexible budget for the range of 35,000 units to 45,000 units of production showed variable overhead costs of $2 per
Gnom [1K]

Answer:

c. $3,200 favorable.

Explanation:

We know that

Total controllable cost variance = Budgeted overhead cost - actual overhead cost

where,

Budgeted overhead cost =  Variable overhead + Fixed overhead

where,

Variable overhead = 40,000 units × $2 = $80,000

And, the fixed overhead = $72,000

So, the budgeted overhead = $152,000

And, the actual one is $148,800

So, the total controllable cost variance would be

= $152,000 - $148,800

= $3,200 favorable

7 0
3 years ago
The United States enjoys a free market economy in which _____.
Mnenie [13.5K]
Free market means you can choose what path you want to take such as a career or future. therefore the consumers control the market. that is why share prices go up and down because of s and d. the suplly and demand comes from the consumer wanting to purchase and sell. Therefore a free market economy is an economy controlled by consumers
4 0
3 years ago
What is the core of marketing<br>​
kkurt [141]

Answer:

l

Explanation:

the core concept of marketing is a social and managerial process by which individuals and groups obtained what they need and want through creating,offering and exchangeing products of value with others

7 0
3 years ago
Read 2 more answers
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