Answer:
b.$270,000
Explanation:
Consider the incremental Costs and Revenues arising from Acceptance of the Offer.
Note : Fixed Costs are irrelevant for this decision as order is accepted within normal production capacity of Stryker Industries
Sales (27,000×$19) 513,000
Less Variable Manufacturing Cost (27,000×$9) (243,000)
Net Income 270,000
Therefore acceptance of offer would result in incremental income of $ 270,000
By definition, opportunity cost is the cost of the next alternative that you gave up because you choose another one. In this case, there are two alternatives: the closer gas station and the farther gas station. Because you chose the cheaper but farther gas station, then the opportunity cost is $2.50 for the closer gas station.
Answer:
$250,000
Explanation:
As we know that the income statement reports the total revenues earned and the total expenses incurred. The total revenues should be presented on the income statement on the credit side while the total expenses should be presented on the income statement on the debit side.
In the given case, the sales are made for $250,000 and the other amount that is given is not related to the revenue
So, only $250,000 should be reported as a total revenues
Answer:
The correct answers are the options:
B) The outcome will result in the rights to an activity going to the party that deserves them the most
D) Bargaining will be efficient since transactions costs are eliminated.
Explanation:
To begin with, the concept that is name as "Coase Theorem" is famously known in the microeconomics theory as the statement that describes the economic efficiency of an outcome that involves externalities. Moreover, it indicates that if a trade between two private parties is possible and the transactions costs are low, then it all will end up in a Pareto efficiency situation in where the party that it deserves the most will be benefit himself from that. However the theorem is just that, a theorem, it is very difficult to be applicable for the real life economics due to the fact that in real life the transactions costs are rarely low enough.
Answer:
Substitution
Explanation:
Principle of subsitution states that no consumer should buy a product for a high price of he can get an alternative (duplicate) that is of a cheaper price.
Substitutes are alternatives that provide similar satisfaction to the customer.
When the price of one product goes up the customer has a choice of going for an alternative.
For example honey and sugar are substitutes. When the price of one goes down people will go for the cheaper alternative. This acts as a price control mechanism.