Answer:
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Explanation:
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Cost advantages that accrue for firms with larger output because they can spread fixed costs over more units and can employ technology more efficiently are called:
<h3>What are Economies of scale?</h3>
Economies of scale is a term that is used to describe the cost advantages that a company gets because they have increased the level of production. There are different types of economies of scale.
Some of these are the financial, technical, and purchasing economies of scale. So, when the purchasing strength of the organization increases, then there is an economy of scale.
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The key considerations that should be made when choosing the most suitable type of stock is to control the stock.
<h3>What should the company control stock?</h3>
When stock is controlled it ensures that there is materials or resources available enough for production.
It includes adequate monitoring of the stock level to ensure sustainability through details inventory and monitoring.
Therefore, the key considerations that should be made when choosing the most suitable type of stock is to control the stock.
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Answer: Option (A) is correct.
Explanation:
When there is an increase in both the components of aggregate demand i.e. government spending and taxes then this will most likely to offset the fiscal policy actions.
If there is an increase in the taxes, as a result aggregate demand decreases because of lower disposable income. This policy action is known as Contractionary fiscal policy.
Whereas, if there is an increase in the Government spending, as a result aggregate demand increases. This policy action is known as Expansionary fiscal policy.
But this will also largely depend upon the tax multiplier and government spending multiplier.
Answer and Explanation:
Any additional cost incurred on account of improving the performance of long term asset is called capital improvement.
1. New component was purchased to improve the efficiency of the equipment.
Journal entry:
Particulars Debit Credit
Equipment $22,000
Cash $22,000
(Being component purchased for cash)
Equipment is debited as capital improvements are made.
2. In the third year, some repair expense incurred for maintaining the efficiency of equipment.
Journal entry:
Particulars Debit Credit
Repair expense $6,250
Cash $6,250
(Being repair expense incurred and paid in cash)
increase in expenses is debited and decrease in asset (cash) is credited.
3. Since repairs is improving the useful life of the equipment, it is considered capital improvement, so the same will be charged to the equipment.
Journal entry:
Particulars Debit Credit
Equipment $14,870
Cash $14,870
(Being repair expense charged to equipment)
