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2 years ago

To maximize profit, a perfectly competitive firm:_____.

Business

1 answer:

dmitriy555 [2]2 years ago

3 0

Answer:

Explanation:

A perfect competition is characterized by many buyers and sellers of homogenous goods and services. Market prices are set by the forces of demand and supply. There are no barriers to entry or exit of firms into the industry.

In the long run, firms earn zero economic profit. If in the short run firms are earning economic profit, in the long run firms would enter into the industry. This would drive economic profit to zero.

Also, if in the short run, firms are earning economic loss, in the long run, firms would exit the industry until economic profit falls to zero.

Profit is maximised where marginal cost equals marginal revenue.

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3 years ago

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Pharoah Industries collected $106,000 from customers in 2019. Of the amount collected, $24,200 was for services performed in 201

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Answer:

A. $33,200

B. $35,000

Explanation:

A. Computation for 2018 cash-basis net income

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Therefore 2018 cash-basis net income is $33,200

(b) Computation for 2018 accrual-basis net income

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2 years ago

Crane Company can produce and sell only one of the following two products: Oven Contribution Hours Required Margin Per Unit Muff

Makovka662 [10]

The question is reproduced in the table below for clarity

Oven Contribution

Hours Required Margin Per Unit

Muffins 0.2 $4

Coffee Cakes 0.3 $5

Answer:

Total contribution margin = $ 60,000.00

Explanation:

When a business is faced with a problem of shortage of a resource which can be used to produced more than one product type, to maximize the use of the resource , the business should allocate it for production purpose in such a way that it maximizes the contribution per unit of the scare resource.

Therefore Crane Company should alocate the oven hours to maximise the contribution per unit of oven hour. This is done as follows:

Step 1

Calculate he contribution per oven hour and rank the product

cont/hr ranking

Muffin $4/0.2 hour = 20 1st

Coffee cakes $5/0.3 hour= 16.67 2nd

Because Muffin generates the highest contribution per hour of Oven, Crane should allocate all the resource to it

Step 2

Calculate the Total contribution from the production of Muffin

Total contribution margin = 20 per her × 3000

= $ 60,000.00

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3 years ago

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Horrocks Company granted 180,000 restricted stock awards of its no par common shares to executives, subject to forfeiture if emp

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Answer:

c. 120,000 shares

Explanation:

$\frac{No adjustment to the numerator}{180,000-60,000= 120,000}$

*Assumed purchase of treasury shares

$600,000

// $\frac{10}{60,000}$

Note: The proceeds also must be increased (or decreased) by any tax benefits that would be added to (or deducted from) paid-in capital when the eventual tax deduction differs from the amount expense, the "excess tax benefit." Since that occurs when the stock price at vesting differs from the stock price at the grant date, the fact that the market price remained at $10 avoided that issue.

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