How do you depreciate a building?

Scenario 14-4 The information below applies to a competitive firm that sells its output for $40 per unit.

Dominik [7]

The average revenue has the same value at Q = 150 and Q = 151.

Further explanation:

Average fixed cost: The fixed cost per unit is termed as the average fixed cost. The fixed cost does not change with the level of output. However, the average fixed cost changes along with the level of output.

Total revenue: The total revenue refers to the amount of revenue generated during a particular period of time. The total revenue is the total of the revenues.

Total cost: The total cost is the sum total of the variable and fixed cost during the year. The total cost represents all the direct, and indirect costs occurred on a product.

Average total cost: The total cost per unit is also termed as the average total cost. The average total cost represents the cost, which is computed by dividing the total cost with the number of units manufactured during the year.

Calculate the total revenue when the quantity of output is 150 units:

It is given that the output is sold at $40 per unit.

$\text{Total revenue at 150 units}=\text{Number of units produced}\times\text{Sales price per unit}\\ =150\times\$40\\=\$6,000$

Therefore, the total revenue when the quantity of output is 150 units is $6,000.

Calculate the average revenue when the quantity of output is 150 units:

$\text{Average revenue}=\dfrac{\text{Total Revenue}}{\text{Number of units}}\\=\dfrac{\$6,000}{150\text{units}}\\=\$40$

Therefore, the average revenue when the quantity of output is 150 units is $40.

Calculate the total revenue when the quantity of output is 151 units:

It is given that the output is sold at $40 per unit.

$\text{Total revenue at 151 units}=\text{Number of units produced}\times\text{Sales price per unit}\\ =151\times\$40\\=\$6,040$

Therefore, the total revenue when the quantity of output is 151 units is $6,040.

Calculate the average revenue when the quantity of output is 151 units:

$\text{Average revenue}=\dfrac{\text{Total Revenue}}{\text{Number of units}}\\=\dfrac{\$6,040}{151\text{units}}\\=\$40$

Therefore, the average revenue when the quantity of output is 151 units is $40.

Justification for correct and incorrect answer:

a.

Average fixed cost: The average fixed cost changes along with the change in output level. The average fixed cost is different from that of fixed cost. Hence, this choice is incorrect.

b.

Average revenue: The average revenue is $40 at Q = 150 units and Q = 151 units. The average revenue is equal at both the levels of the output. Hence, this choice is correct.

c.

Total cost: The total cost is not the same at both the levels of the output. The total cost is different for Q = 150 units, and Q = 151 units as the average total cost is also different for both output levels. The total cost increases when the output level changes. Hence, this option is incorrect.

Learn more

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Answer details

Grade: Senior School

Subject: Cost Accounting

Chapter: Cost Behavior

Keywords: Scenario 14-4, the information below applies to, competitive firm, scenario 14-4 the information below applies to competitive firm, when the firm produces, which of the following magnitudes, average fixed cost, average revenue, average cost per unit, average total cost, at Q = 150 and Q = 151, represent the quantity of output, refer to scenario 14-4, when the firm produces and sells 150 units of output.

6 0

3 years ago

Read 2 more answers

What human relations skills is most clearly related to communication?

Wewaii [24]

The answer is Hearing. On the off chance if the mouth is open, the ears cannot listen. Hearing and talking go as an inseparable unit, on the off chance that you cannot talk no one can comprehend what you need either.

I hope this helped ^_^

4 0

3 years ago

The actual inventory holding cost incurred by an item depends on how long it actually spends in inventory.

svlad2 [7]

True. The actual inventory holding cost incurred by an item depends on how long it actually spends in inventory. Holding costs are costs that happen when the inventory stays put and does not sell. The costs are calculated into the inventory costs along side of ordering and shortage costs. Holding costs can include the goods being damaged or spoiling due to the length of being held. Since they can be held for 5 days or 100 days (example) the total cost that is held depends on the length the items were held for.

5 0

3 years ago

bro i found this girl that cute and i need tips to get her number help this is how she looks copy link https://brainly.com/app/p

Art [367]

Answer:

Size Up the Situation but Don't Stare. via: Pexels / cottonbro. ...

Come Up With a Few Potential Conversation Starters and Comments. ...

Approach Her at the Right Moment. ...

Start Casually and Be Honest with Her. ...

Lead the Conversation Where She Wants It To Go. ...

Let Her Tell You If She Wants to Give Her Number Indirectly. .

3 0

3 years ago

Haver Company currently produces component RX5 for its sole product. The current cost per unit to manufacture the required 68,00

Genrish500 [490]

Answer:

1.Total cost of making = $1,632,000.

2) Incremental cost of buying $204,000

3.)The company should make the product as it will save $204,000 by doing so

Explanation:

1) Total cost of making = unit cost× units required cost

Total cost of making = 24.00 × 68,000= 1,632,000.0

2) Total incremental cost of buying

Relevant cost of making

Unit variable cost= (5.00 + 9.00+ (30%× 10)=17

Total variable cost of making = 17 ×68,000 = 1,156,000

Relevant cost of buying 68,000× 20 = 1,360,000

Incremental cost of buying 204,000

3) Haver should make the product as it will save $204,000 by doing so

5 0

3 years ago

How do you depreciate a building? ​

How do you depreciate a building?