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4 years ago

What happens to price when the cost of resources rise and falls

1 answer:

6 0

In any business, when the cost of resources rise, the price of buying the commodity will also be high, this is because when it cost you much to produce a commodity, you will end up charging a higher price when selling it. Failure to do so may lead to making loses. The opposite is also true, when the cost of resources fall, the pricing will also be less.

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ABC Production ABC Production, a consumer products firm with a functional structure, is expanding from a single product line int

Ksivusya [100]

Answer:

Divisional product structure

Explanation:

Divisional product structure is also referred to as a product based structure. Employee are shared into divisions based on products they manufacture and sell within a particular geographic location.

The advantage of this structure is that employees work efficiently on the production and sale of one particular product.

This is ideal for ABC production that are expanding from a single product line into several diverse product groups, with most sales within one country.

8 0

3 years ago

Which of the following is correct?a. The GDP deflator is better than the CPI at reflecting the goods and services bought by cons

kap26 [50]

Answer:

A) The GDP deflator is better than the CPI at reflecting the goods and services bought by consumers.

Explanation:

The GDP deflator measures the change in prices of all finished goods and services produced within an economy in a given year.

The CPI, on the other hand, measures the change in the price of a selected basket of goods and services, that corresponds with those that are most often bought by citizens, but is limited anyways in scope.

Therefore, we can safely conclude that the GDP deflator is a more comprehensive measure, even if it's used less frequently than the CPI.

5 0

3 years ago

Product costs are computed by:

Alexxandr [17]

Answer: Option (B) is correct.

Explanation:

Product costs are the that are incurred during the production of a product. Various costs are involved in this product cost such as direct labor cost, consumable production supplies, direct material, etc. It is calculated by multiplying the cost driver rate to the number of the units of cost driver that are used in the production of each product.

5 0

3 years ago

Suppose a 65-year-old person wants to purchase an annuity from an insurance company that would pay $20,700 per year until the en

laila [671]

→Answer:

a. $188,533.82

b. $219,296.09

Explanation:

These problems can be solved using the present value of annuity formula which is:

PV= C x (1-(1+r)^-n)/r

Where:

PV = the present value of annuity (the amount we are solving for)

C= The annual amount receivable from the insurance company ($20,700)

r= The interest rate (7%)

n= Number of years (15 and 20 years respectively)

To solve the first question (a) plug the variables into the formula and you will have → 20,700 × (1-(1.07)^-15)/.07= $188,533.82
to solve the second question (b) plug the variables into the formula and you will have → 20,700×(1-(1.07)^-20)/.07 = $219,296.09

5 0

3 years ago

The jackson company has just paid a dividend of $3.00 per share on its common stock, and it expects this dividend to grow by 10%

Norma-Jean [14]

Answer:

cost of new common stock= 16.3%

Explanation:

The value of a stock is the present value of its expected future dividend discounted at the cost of equity.

Cost of equity can be determined, using the capital pricing model (CAPM).

Cost of equity using CAPM:

Ke = Rf + β(Rm-Rf)

Rf= 6%, Rm-Rf = 5%, β= 2.00

E(r) = 6% + 2.00× (5%) = 16%

Current market price:

Market price = 3.00 × (1.1)/(0.16-0.1)

= $55

In incorporating the flotation cost and using the dividend valuation model,

the cost new common stock will be:

Cost of new common stock:

= D0× (1+g)/Po × (1-F) + g

Po- 55, g- 10%, F- 5%, Do- 3

= 3 × (1.1)/55× (1-0.05) + 0.1

= 16.3%

7 0

4 years ago