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3 years ago

What is diminishing marginal returns?

Business

1 answer:

Bumek [7]3 years ago

8 0

In economics, diminishing returns is the decrease in the marginal (incremental) output of a production process as the amount of a single factor of production is incrementally increased, while the amounts of all other factors of production stay constant.

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AirQual Test Corporation provides on-site air quality testing services. The company has provided the following cost formulas and

serg [7]

Answer:

AirQual Test Corporation

Flexible Budget:

Fixed Variable Actual Flexible Variance

Revenue $276 $35,890 $41,400 ($5,510) U

Technician wages $8,600 $8,450 8,600 150 F

Mobile lab operating exp. $4,600 $34 $9,200 9,700 500 F

Office expenses $2,800 $3 $3,070 3,250 180 F

Advertising expenses $1,580 $1,650 1,580 (70) U

Insurance $2,890 $2,890 2,890 0 N/A

Miscellaneous expenses $930 $1 $375 1,080 705 F

Total $10,255 $14,300 $4,045 U

Explanation:

a) Data and Calculations:

Fixed Variable Actual

Revenue $276 $35,890

Technician wages $8,600 $8,450

Mobile lab operating exp. $4,600 $34 $9,200

Office expenses $2,800 $3 $3,070

Advertising expenses $1,580 $1,650

Insurance $2,890 $2,890

Miscellaneous expenses $930 $1 $375

Expected number of jobs to be worked = 140

Actual number of jobs worked = 150

Flexible costs:

Revenue = $276 * 150 = $41,400

Mobile lab operating expense:

Fixed element = $4,600

Variable element = $34 * 150 = $5,100

Total flexible budget = $9,700

Office Expenses:

Fixed element = $2,800

Variable element = $3 * 150 = $450

Total flexible budget = $3,250

Miscellaneous expenses:

Fixed element = $930

Variable element = $1 * 150 = $150

Total flexible budget = $1,080

Spending Variances:

Technician wages $8,600 $8,450 8,600 150 F

Advertising expenses $1,580 $1,650 1,580 (70) U

Insurance $2,890 $2,890 2,890 0 N/A

Spending variances = $80 F

Activity Variances:

Mobile lab operating exp. $4,600 $34 $9,200 9,700 500 F

Office expenses $2,800 $3 $3,070 3,250 180 F

Miscellaneous expenses $930 $1 $375 1,080 705 F

Total activity variances = $1,385 F

5 0

2 years ago

Gabriella, a single taxpayer, has wage income of $160,000. In addition, she has $7,000 in long-term capital losses, $1,000 in lo

Hatshy [7]

Answer:

c. $156,000

Explanation:

Adjusted gross income = Wage income + Long-term capital gains + Short-term capital gains - Long-term capital losses - Short-term losses

Adjusted gross income = $160,000 + $1,000 + $3,000 - $7,000 - $1,000

Adjusted gross income = $156,000

Thus, Gabriella's AGI for 2017 is $156,000

6 0

3 years ago

__________ is the amount a business earns after deducting what it spends for salaries and other expenses.

Lana71 [14]

Answer:

profit

Explanation:

profit is a financial return or reward that an entrepreneur aims to achieve to reflect the risk it takes. Profit is also an important signal to other providers of finance to a business. Banks, suppliers and other lenders are more likely to provide finance to a business that can demonstrate that it makes a profit and that it can pay debts as they fall due.

4 0

3 years ago

If the contribution margin ratio for france company is 45%, sales were $425,000, and fixed costs were $100,000, what was the inc

Semenov [28]

Answer:

d. $91,250

Explanation:

We can calculate variable costs by using the contribution margin ratio formula.

Contribution Margin Ratio= Sales revenue Less Variable Costs/Sales revenue

45%= $ 425,000- Variable Costs / $ 425,000

45% * $425,000= $ 425,000 -Variable Costs

$ 191250= $ 425,000- Variable Costs

Variable Costs = $ 425,000- $ 191250

Variable Costs = $ 233750

Sales $ 425,000

Variable Costs 233750

Fixed Costs= $ 100,000

Income from Operations= $ 91250

7 0

3 years ago

Park Company reports interest expense of $340,000 and income before interest expense and income taxes of $6,120,000.(1) Compute

algol13

Answer: 1. 18 times

2. Park is in better position

Explanation:

1. Times interest earned is a financial ratio that measures interest coverage. It's essentially to check if a company can pay it's debt payments and is calculated by either EBIT or EBITDA divided by the total interest expense. The higher the better and anything above 2.5 times is usually considered.

Calculating would therefore be,

= $6,120,000 /$340,000

= 18 times.

2. As mentioned in the first answer, for the Times interest earned, the higher it is, the more favourable it is. So Park Company will be considered safer and are most definitely in a better or worse position than its competitor to make interest payments if the economy turns bad. The fact that theirs is 18 means that they can pay off their interest expense 5 times more than their competitor who can only repay 12 times.

If you need any clarification do comment.

7 0

3 years ago