Answer:
Minimum transfer price = $21
Explanation:
<em>Transfer price is the price at which goods are exchange between branches or divisions of the same group</em>
<em>Where a division is operating at the less than the existing capacity, to optimist the group profit, the minimum transfer price should be set as follows</em>
Minimum transfer price = Variable cost
Note that the fixed of $12 per unit (i.e 33-21) is irrelevant for this purpose, whether or not Hinges produces, it will be incurred either way.
It is worthy of note that there is no opportunity cost associated with any transfer to the Doors division because Hinges is currently having excess capacity.
Therefore, any offering price equal to or above the variable cost of $21 would be acceptable and optimize the group profit.
Hence, the minimum transfer price = $21
Answer: These could be categorized as follows :-
Explanation:
a. Accounts receivable = Asset in balance sheet
b. Sales = Revenue in income statement
c. Equipment = Asset in balance sheet
d. Supplies expense = Expense in income statement
e. Cash = Asset in balance sheet
f. Accounts payable = Liability in balance sheet
g. Retained Earnings = Equity in balance sheet
h. Revenue = Revenue in income statement
i. Contributed Capital = Equity in balance sheet
j. .Cost of Goods Sold = Expense in income statement
k. Notes Payable = Liability in balance sheet
l. Selling and Administrative Expenses = Expense in income statement
The true statement about this natural monopoly is that It is more efficient on the cost side for one producer to exist in this market rather than a large number of producers.
- Also, it is a true statement that natural monopolies can earn positive profit in the long run without the government regulation.
<h3>What is a
natural monopolies?</h3>
This refers to the type of monopoly that exists in a particular market if a single firm can serve that market at lower cost than any combination of two or more firms.
It mostly occurs when when the most efficient number of firms in the industry is one. Also, a natural monopoly will ideally have very high fixed costs implying that it is impractical to have multiple firms producing the good.
A very good example of a natural monopoly is the case of tap water.
Hence, the true statement about this natural monopoly is that It is more efficient on the cost side for one producer to exist in this market rather than a large number of producers and it is a true statement that natural monopolies can earn positive profit in the long run without the government regulation.
Therefore, the answers are Option B and True.
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The best answer would be answer choice c.
