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Vika [28.1K]
3 years ago
9

Changes in the prices of key commodities can have a significant impact on a company’s bottom line. According to a September 27,

2007, article in the Wall Street Journal, "Now, with oil, gas and electricity prices soaring, companies are beginning to realize that saving energy can translate into dramatically lower cogs." Another Wall Street Journal article, dated September 9, 2007, states, Higher grain prices are taking an increasing financial toll." Energy Is an input into virtually all types of production; corn is an input into the production of beef, chicken, high-fructose corn syrup, and ethanol (the gasoline substitute fuel).
a. Explain how the cost of energy can be both a fixed cost and a variable cost for a company.
b. Suppose energy is a fixed cost and energy prices rise. What happens to the company’s average total cost curve? What happens to its marginal cost curve? Illustrate your answer with a diagram.
c. Explain why the cost of corn is a variable cost but not a fixed cost for an ethanol producer.
d. When the cost of corn goes up, what happens to the average total cost curve of an ethanol producer? What happens to its marginal cost curve? Illustrate your answer with a diagram.
Business
1 answer:
mihalych1998 [28]3 years ago
5 0

Answer:

a. Explain how the cost of energy can be both a fixed cost and a variable cost for a company.

Energy is a fixed cost when it affects divisions of the company that are not directly related with the production process, for example, the energy used to power the administrative office.

Energy becomes a variable cost when it powers things such as machinery or equipment, that are directly related with the production process of a good.

b. Suppose energy is a fixed cost and energy prices rise. What happens to the company’s average total cost curve? What happens to its marginal cost curve? Illustrate your answer with a diagram.

The average total cost curve goes up, because the fixed cost curve is a part of the average total cost curve, and energy, as a fixed cost going up, rises the fixed cost curve as well.

The marignal cost curve does not change, because it is not affected by the rise of the cost of energy when it is a fixed cost.

c. Explain why the cost of corn is a variable cost but not a fixed cost for an ethanol producer.

Because corn is the raw material used to make ethanol. For an ethanol producer, the cost of producing ethanol changes depending on the amount of corn used.

d. When the cost of corn goes up, what happens to the average total cost curve of an ethanol producer? What happens to its marginal cost curve?

Both curves go up, because both curves are affected by an increase in the price of corn when corn is a variable cost.

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During September, the capital expenditure budget indicates a $280,000 purchase ofequipment. The ending September cash balance fr
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Answer:

$260000

Explanation:

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$260k >> cash loan in order to achieve balance

------------------------------

$20000 >> Cash balance

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3 years ago
Brown Company provided services to a customer and immediately collected $1,900 cash. Show how to record the transaction to the T
hjlf

Answer:

credited; right; debited; left

Explanation:

The journal entry to record this transaction is shown below:

Cash A/c Dr $1,900

     To Service revenue A/c $1,900

(Being the cash is collected)

It to be displayed in T accounts

For cash account

                                                               Cash

Debit side

Service revenue                    $1,900

For service revenue account

                                                    Service revenue

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                                                                                     Cash    $1,900

So, the cash account would be debited and would be displayed on the left hand side while the service revenue would be credited and  would be displayed on the right hand side

8 0
3 years ago
Laura's father, Albert, gave Laura a gift of 500 shares of Liba Corporation common stock in 2017. Albert's basis for the Liba st
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Answer:

B) $3,000

Explanation:

Since Laura acquired this property (stocks) by gift, her basis for loss will be $3,000 which is equal to the fair market value at the time she received the gift. If she had made a gain with this transaction, her basis for gain would have been the $4,000 of her father's basis.

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Speculator paid $25,000 net each for two 150 front-foot lots. Speculator split them into 3 lots with equal front footage. Specul
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Answer:

The answer is 80%

Explanation:

Profit = revenue - cost of sales

         =[(50* 300) per 50 front-foot lot * 3 lots ] - 25000   *100

         =(45000-25000)/25000    *100

         <u>=80%</u>

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3 years ago
The ________ is a federal statute passed in 1990 that requires food manufacturers and processors to provide nutrition informatio
balandron [24]
<span>Nutrition Labeling and Education Act
   This act requires nutrition labeling on food and standardizes terms such as serving size, "low fat", "light", and the such. It prevents things such as claiming "low calorie" cause the "calories per serving" is only half of the competitors, while specifying an absurdly low serving size that's also half the size the competitors use.</span>
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