There is a surplus, as you can see, the quantity supplied is more than the quantity demanded.
Answer:
The answer is A. resources are shared by more than one product or service.
Explanation:
Indirect cost are costs that are not directly related or traced to any product or activity. They are shared or used by more than one activities. Examples include, Adminstrative expenses, advertising expenses, telephone expenses, rent, office expenses etc.
Like direct cost, indirect cost can be fixed or variable.
Indirect costs are used by business as a whole and not just limited to a particular product.
Option B is not correct. Cost that are directly traced or related to a product is known as direct material. For example, direct labour and direct material used to produce a particular good.
Option C and D are also wrong
Answer:
Option (A) is correct.
Explanation:
Contribution Margin:
= Total sales of the product - variable expenses
= $400,000 - $270,000
= $130,000
Avoidable fixed cost = Total fixed cost - Unavoidable fixed cost
= $160,000 - $ 70,000
= $90,000
Net Margin :
= Contribution Margin - Avoidable fixed expense
= $130,000 - $90,000
= $40,000
Hence, if product A is dropped, the company's overall net operating income would decrease by $40,000 per year.
Jdjdjjdjdjjdjdjxnnxnnxnxjdjfnfnjtjfjjfjfbcbch hh b h
Answer:
A) The bulk of Airline A's profits came from other income which included the sale of some of its fleet.
Explanation:
Investment in favor of Airline A would severely be hindered if it is found out that the bulk of Airline A's profits came from other income which included the sale of some of its fleet.
This is because it would mean that Airline A is unable to keep up with its costs and thus is divesting its operations. Divesting is never a good sign for a firm looking to gain advantage in the future. Furthermore this explains why there was a sudden shift from loss making in the previous years to profits in the current year. A detailed inspection would be needed to eliminate uncertainty and as such any investment decisions in favor of airline A would not be justified.
Option B, C and D is efficient management and would make Airline A more lucrative for investment as it would mean management is eagerly looking to cut inefficient operations.
Option E would require more information to weaken the argument.
Hope that helps.
