The answer would be D: debit to an asset. Hoped this helped:)
Answer:
e. does not always lead to high prices.
Explanation:
Profit-maximization pricing means fixing prices so that total revenue is more as compared to total costs. This pricing strategy is used by a monopolist.
It is the short run or long run process by which the price and output level is determined by the firm that can give the maximum profit.
The price per item has been set higher than its total cost of production make to sure that the company makes a profit on each sale. As a result, the company makes a profit on every sale and to reduce risk and uncertainty factors in business operations.
Profit maximization pricing objective <u>does not always lead to high prices</u>.
Answer:
B
Explanation:
Variable costs are incurred only when a boat is manufactured such as material and direct labor. Thus variable costs will remain unchanged since it will costs the exact same amount to manufacture another identical boat. If it costs $4,000 in material and direct labor to manufacture boat A it will cost $4,000 to manufacture boat B. Fixed costs are sunk costs that will be incurred whether they manufacture 800 or 1,000 boats per year. The rent and admin costs will remain unchanged no matter how many boats are manufactured. But the fixed cost per boat will change. The total fixed costs are $80,000 (800 boats x $1,000 per boat fixed cost). If the manufacturing rate is increased to 1,000 boats per year, the per boat fixed cost will decrease to $800. Fixed costs remain at $80,000/1,000 boats = $800.
I would choose A. But that's a recommended answer from my teacher<span />
Answer:
3. net income is understated by $175
Explanation:
There were two transactions omitted. The first transaction is unearned rent revenue of which $450 was earned. This earned rent revenue increases income by $450. While the second transaction was accrued interest payable of which $275 is owed. This interest payable increases liabilities by $275.
Therefore, from the above, income or revenue is understated by $450, while expenses is understated by $275.
Therefore, net income is understated by income less expenses, thus 450 - 275 = $175. This also implies that liabilities are overstated by $175.
