According to economists like Adam Smith, who benefits from free trade?

Ortega Industries manufactures 15,000 components per year. The manufacturing cost of the components was determined to be as foll

grandymaker [24]

Answer:

Decrease by $30,000

Explanation:

Cost to buy = 15,000 * $34

Cost to buy = $510,000

Note: Since Ortega is buying 15000 units at $34, the $40,000 avoidable cost on fixed manufacturing overhead is non-applicable.

Cost of making = $150,000 + $240,000 + $90,000

Cost of making = $480,000

So, if Ortega purchases the component from the supplier instead of manufacturing it, the effect on income would be decrease by $30,000 ($510,000-$480,000).

8 0

3 years ago

Beasley, Inc., reports the following amounts in its December 31, 2021, income statement. Sales revenue $ 350,000 Income tax expe

lisov135 [29]

Answer and Explanation:

The preparation of the multiple-step income statement is presented below:

<u> Beasley, Inc.</u>

<u> Multiple-step income statement</u>

<u> December 31, 2021</u>

Sales revenue $350,000

Less: Cost of goods sold -$125,000

Gross profit $225,000

Less: Operating expenses

Salaries expense -$37,000

Advertising expense -$23,000

Utilities expense -$43,000

Operating income $122,000

Less: interest expense -$12,000

Income before income tax $110,000

Less: income tax expense -$39,000

Net income $71,000

We simply deduct all the expenses from the sales revenue so that the net income could arrive

7 0

3 years ago

A check-processing center uses exponential smoothing to forecast the number of incoming checks each month. The number of checks

adell [148]

Answer:

a. 41.6 million

b. 42.28 million

Explanation:

The computations are shown below:

a. For the forecast for July month:

= Number of checks received in June × smoothing constant + (1 - smoothing constant) × forecast in June

= 40 million × 0.2 + (1 - 0.2) × 42 million

= 8 million + 33.6 million

= 41.6 million

b. For the forecast for August month:

= Number of checks received in July × smoothing constant + (1 - smoothing constant) × forecast in July

= 45 million × 0.2 + (1 - 0.2) × 41.6 million

= 9 million + 33.28 million

= 42.28 million

c. In this, the exponential method is used. But in the given situation we use linear forecasting method

8 0

3 years ago

Boone’s Cleaning Service performed cleaning services during December 2014, but had not collected any cash from its

mezya [45]

Answer:

B. The service increased assets and increased stockholders’ equity.

Explanation:

Revenue is earned as immediately the service agreed by the parties involved has been delivered whether cash has been collected or not.

The accounting equation shows the relationship between the elements of the balance sheet namely the assets, liabilities and equity.

Given that Boone’s Cleaning Service performed cleaning services during December 2014, but had not collected any cash from its customers as of December 31, 2014, the amount earned is recognized in revenue and accounts receivables as credits and debits respectively.

The effect of this on the accounting equation is an increase in equity(via revenue earned) and an increase in assets (account receivables)

8 0

3 years ago

Before negotiating a long-term construction contract, build- ing contractors must carefully estimate the total cost of completin

zysi [14]

Answer:

<h3>Benzion Barlev of New York University</h3>

NEGOTIATION OF A LONG-TERM CONSTRUCTION CONTRACT

a. The probability that the contract will be profitable for the contractor is:

= 81%

b. The probability that the project will result in a loss for the contractor is:

= 19%

c. The value of R that the contractor should strive for in order to have a .99 probability of making a profit is:

= $1,246,100.

Explanation:

a) Data and Calculations:

Mean total cost (x) = $850,000

Standard deviation = $170,000

Revenue = $1,000,000

Probability of being profitable = (R - x)/std deviation

= ($1,000,000 - $850,000)/$170,000

= $150,000/$170,000

= 0.882

From Z table, 0.882 = 0.81057 = 81%

Probability of loss = 19% (100 - 81%)

To have a 99% (0.99) probability of making a profit, Z value = 2.33 from the Z table:

(R - x)/std deviation = 2.33

(R - x) = 2.33 * $170,000

= $396,100

(R - $850,000) = $396,100

R = $396,100 + $850,000

R = $1,246,100

7 0

3 years ago