Variable cost vary in direct proportion to business volume (quantity sold or quantity produced)
Fixed cost remain constant regardless of sales or manufacturing volume.
According to question if sales are increased by 1200 units.current year sale will be 11200 unit .
Suppose Wesson have a variable cost of $6 per unit and fixed cost of $1000.
Cost of 10000 units are :-
Variable cost is 60000(10000*6)
Fixed cost is 1000.
Cost of 11200 unit are :-
Variable cost is 67200(11200*6)
Fixed cost is 1000
So if sales are increased by 12%. Variable cost are increased by 12%(67200-60000). Fixed cost remain the same at 1000 regardless of sales increased
Therefore,
Variable cost increases, Fixed cost remains constant. Answer is choice (e)
Answer:
D) $600,000
Explanation:
The double-declining-balance method of depreciation = Depreciation factor x cost of asset
Depreciation factor = 2 x (1/useful life of the asset)
Depreciation factor = 2 / 5 = 0.4
Deprecation expense = 0.4 x $1,500,000 = $600,000
I hope my answer helps you
Answer:
So unit elastic at q = 5
inelastic above 5
and elastic below 5
Explanation:
The elasticity is determianted by the marginal revenue.
Our first goal is to find the marginal revenue function
p = 40 - 4q
total revenue(TR) = quantity times price
q x (40 - 4q) = -4q^2 +40q
marginal revenue TR(q)/d(q) = -8q + 40
Now, with this fuction the economic analisys states that a demand is unit elastic when marginal revenue is zero.
It will be inelastic below zero and elastic above zero
MR will be zero when q = 5
-8(5) + 40 = 0
As quantity increases the demand will be inelastic
while
Answer:
The change in checking deposit is equal to $22,727.27.
Explanation:
An amount of $2,500 is deposited in a checking account.
The required reserve ratio is 0.11 or 11%.
A part of this deposit will go to the required reserve and the rest will be added in the checking deposit of the bank.
The change in the checking deposits will be
=
amount deposited
= 
= $22,727.27