Forest Components makes aircraft parts. The following transactions occurred in July.
1 answer:
Answer and Explanation:
Answer and explanation attached
Beginning raw materials = ending raw materials +raw materials for production+issued raw materials- raw materials purchased -raw materials returned from production= $79800
Cost of goods manufactured =ending finished goods+cost of goods sold -beginning finished goods= $553000
Beginning work in progress inventory=
Ending work in progress + cost of goods manufactured + materials returned - manufacturing overhead applied- issued raw materials-direct labour wages =$105490
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Answer:
a. Decrease
b. Decline
c. Exit
d. No change
Explanation:
The market for gourmet chocolate is in the long-run equilibrium, and an economic downturn has caused the consumer disposable income to fall. Chocolate is a normal good, and the chocolate producers have identical cost structures.
a. This decline in the consumer income will reduce the purchasing power of the consumers. As a result, the demand will decrease. The demand curve will move to the left.
b. This leftward shift in the demand curve will cause the price to decline, As the price falls, the profits earned by the producers will decline as well.
c. In the long run, the firms operate at zero economic profits. So a decline in profits imply that the firms are operating at an economic loss. This will cause the loss incurring firms to exit the market.
d. The long run supply curve will remain the same. It is not affected by change in profits, it changes only with change in the state of technology or availability of resources.
