Which situation best illustrates an effect of the law of supply?

Given Advanced Company's data, and the knowledge that the product is sold for $71 per unit and operating expenses are $300,000,

Kobotan [32]

Answer:

b) $113,000

Explanation:

For the computation of net income under absorption costing first we need to follow some steps which is shown below:-

variable overhead per unit = $105,000 ÷ 35,000

= $3 per unit

The Variable cost of production per unit

Particulars Amount

Direct material $19.00

Direct labor $21.00

Variable overhead $3.00

Variable cost of production

per unit $43.00

Cost per unit of finished goods under absorption costing

Particulars Amount

Total direct material cost $665,000

($19 × 35000)

Total direct labor $735,000

($21 × 35000)

Total variable overhead $105,000

Total fixed overhead $175,000

Total $1,680,000

Units in finished goods = Number of units produced - units sold

= 35,000 - 21,000

= 14,000

Cost of finished goods under variable costing

= Variable cost of production per unit × Number of units in finished goods

= $43 × 14,000

= $602,000

Cost of goods sold

= Production cost - Finished goods cost

= $1,680,000 - $602,000

= $1,078,000

Income statement under absorption costing

Particulars Amount

Sales revenue $1,491,000

($71 × 21,000)

Less: cost of goods sold -$1,078,000

Gross Profit $413,000

Less : operating expenses -$300,000

Net operating income $113,000

3 0

3 years ago

Which type of business is likely to have purchasing activities related primarily to consumable goods rather than products that w

lilavasa [31]

Answer:

service-oriented business

Explanation:

Ape.x verified

5 0

2 years ago

Shawna wins the lottery and her income increases by 60 percent. she used to buy 10 pints of cottage cheese per month and now she

Dmitriy789 [7]

Answer: Her income elasticity of demand for cottage cheese is 0.3333 making it a normal and necessary good.

The income elasticity of demand is given by :

$\mathbf{YED = \frac{percentage change in demand}{percentage change in income}}$

The percentage change in income is given as 60%. We calculate the percentage change in quantity demanded as follows:

$\mathbf{percentage change in quantity demanded = \frac{Q_{1}-Q_{0}}{Q_{0}}}$

$\mathbf{percentage change in quantity demanded = \frac{12-10}{10}}$

$\mathbf{percentage change in quantity demanded = 0.2}\\$

Substituting the value above in the income elasticity demand formula we get,

$\mathbf{YED = \frac{0.20}{0.60}}$

YED = 0.33333

Since the income elasticity is positive, and since Shawna buys more cottage cheese after an increase in income, we can classify this good as a normal good.

Since the income elasticity is between 0 and 1 we can also conclude that cottage cheese is also a essential good or a necessity.

7 0

3 years ago

Someone who helps to teach a concept privately, or to a very small group, is a:

Annette [7]

Answer:

B tutor how are u???????????

8 0

2 years ago

Suppose a project financed via an issue of debt requires six annual interest payments of $20 million each year. If the tax rate

pochemuha

Answer:

$4,200,000

Explanation:

Given :

Annual interest payment = $20 million

Tax rate = 21%

Cost of debt = 6%

The value of the interest rate tax shield is given by :

The tax rate * annual interest payment

Tax rate = 21% = 21/100 = 0.21

Annual interest payment = $20,000,000

The value of interest rate tax shield = (0.21 * $20,000,000) = $4,200,000

5 0

2 years ago