The impact to likely have on the average inventory in the process is "because larger batches take longer to complete, average inventory will rise."
<h3>What is average inventory?</h3>
An estimation of the worth or quantity of a certain commodity or group of goods over two or more prescribed time periods is known as average inventory.
Some key features of average inventory are-
- By combining the beginning and final inventory values throughout a specific time period, average inventory is indeed the arithmetic mean of inventory during that time frame, which may differ from the average price for the same data set.
- The median price for the same set of data may differ from the average inventory, which is the sample mean of a stock during a specific time period.
- When examining overall sales volume, average inventory statistics can be used as a benchmark, enabling a company to monitor inventory losses.
- A business can keep inventory from the most recent purchase by using moving average inventory.
- Because it enables them to more effectively manage its costs, sales, or business connections, inventory administration is an important success factor for businesses.
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The machine's second year depreciation expense is $3,200.
Depreciation is a method that is used to expense the cost of an asset. The units-of-production depreciation method determines the depreciation expense based on the units of goods that the machine produces in a given year.
Unit of production depreciation expense = (unit of goods produced in year 2 / total units the machine can produce) x (cost of the asset - salvage value)
Total units the machine can produce = 1500 + 1250 + 1000 = 3750
(1000 / 3750) x ($15,000 - $3,000) = $3,200
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Answer:
a) Fixed or variable and (b) as either direct or indirect.
Explanation:
1. Lace to hold leather together: indirect cost/ variable
2. Wages of assembly workers : direct cost/ variable
3. Coolants for machinery : indirect cost/ fixed
4. Annual flat fee paid for factory security : indirect cost/ fixed
5. Leather covers for soccer balls: direct cost/ variable
6. Machinery depreciation (straight-line): indirect cost/ fixed
7. Taxes on factory: indirect cost/ fixed
Answer:
It's called a Normal Good
Explanation:
Normal Goods are a type of goods whose demand shows direct relations with a consumer's income. The consumption of a normal good increases with the increase of a consumer's income, if the income decreases the consumption decreases.
Normal goods have a positive income elasticity of demand. Income elasticity of demand measures the magnitude with which the quantity demanded for a good changes in reaction to a change in income. A normal good has an income elasticity positive, but minor to one.
In this case, if the price of a good increases, the income of the consumer decreases, therefore it consumes fewer quantities of the product. An example of a normal good is Organic food.
An inferior good has an income elasticity of demand negative, meaning that if the income increases, the consumption decreases. An example of an inferior good is margarine if the income increases, consumers will start buying a superior product like butter.
A Luxury good presents an income elasticity of demand superior to one. The consumption of a luxury product increases more than proportional to the increase in income. An example of a luxury good is luxury cars.