Answer:
Annual depreciation= $4,300
Explanation:
Giving the following information:
Purchasing price= $27,600
Salvage value= $1,800
Useful life= 6 years
To calculate the depreciation expense using the straight-line method, we need the following formula:
Annual depreciation= (original cost - salvage value)/estimated life (years)
Annual depreciation= (27,600 - 1,800) / 6= $4,300
Answer: Greater the MPC
Explanation:
The Marginal Propensity to consume refers to how much Economic consumption increases or decreases due to a change in income.
The formula for MPC is;
= Change in Consumption/Change in Income.
Consumption is a major component of GDP so it has a direct influence on Economic output. In other words, the larger the level of consumption, the higher the higher the output.
As evident from the equation, if the change in consumption is higher than the change in income, the MPC will be larger. A larger MPC therefore corresponds to a higher Consumption.
If a higher Consumption leads to a larger output and a larger MPC corresponds to a higher Consumption then that means that a higher MPC leads to a larger output.
Answer:
4. Debit Cash account $43,000
Credit Accounts receivable $43,000
Being entries to record cash received from credit sales made earlier
5. Debit Cash $15,000
Credit Sales revenue $15,000
Being entries to recognize revenue generated from Cash sales.
6. Debit Cash $57,275
Debit Charges (expense) $725
Credit Sales revenue $58,000
Being entries to recognize revenue generated from Credit card sales.
Explanation:
When revenue is earned but cash is yet to be received, the entries required are;
Debit Accounts receivable
Credit Revenue account
When cash is received,
Debit Cash account
Credit Accounts receivable.
Total sales
= $15000 + $43,000
= $58000
Credit card charge
= 1.25% * $58000
= $725
Cash collected from credit card sales
= $58000 - $725
= $57275
Answer:
MC > AC : AC rise ; MC < AC : AC fall ; MC = AC : AC minimum .
Explanation:
Marginal Cost MC is addition to total cost with an additional production.
∆C/∆Q
Average Cost AC is average cost per unit of production output. C / Q
Relationship between AC & TC : Average move in direction of Marginal .
MC > AC : AC rises
MC < AC : AC falls
MC = AC : AC is minimum