Answer:
a) Contribution from the special order= $52,640.
b) Stuart should accept the order
Explanation:
The amount of contribution to profit from the special order is the difference between the revenue and the relevant cost of variable cost of the special order.
The relevant cost of the special order is equal the sum of all variable cost only.
Note that the allocated facility overhead is irrelevant to whether to accept or reject the order. This is so because the costs would still be incurred either way.
Relevant variable costs of special order = (880 + 510) × 47 = $65,330
Sales revenue = 2,510 × 47 = $117,970.00
Contribution from the special order =$117,970.00 - $65,330
= $52,640.00
B) Stuart should accept the special order because it would increase its profit by $52,640.
Answer:
b. spending on goods to be used in future production
Explanation:
There are basically four components of Gross domestic product (GDP) which are as follows
GDP = Consumption spending + investment + government spending + net exports
where,
Net exports would equal to
= Export-import
Here, investment means the investment is done on goods which increase in productivity for the future period so that overall output could be increased
Answer:
Answer sheet required more space then was available so I attached it as a picture.
Answer:
e. None of these.
Explanation:
The deductible expenses are expenses that are wholly, necessarily and exclusively for business purpose. This excludes the entertainment cost which is the only avoidable cost in the classes of cost given.
Hence, Sophie's deductible expenses are
= $3,000 + $800 + $600
= $4,400
Answer:
b. The producer who gives up less of other goods to produce Good X has the smaller opportunity cost of producing Good X
Explanation:
<u>The opportunity cost is the cost of the best alternative.</u>
In this case, the producer uses factors (labor, raw materials, capital) to produce good X. His opportunity cost is the goods he would produce instead of good X.
A producer who gives up less of the other goods means his best alternative is lower than one who gives up more.
<em>For example</em>
if a producer can do
10 good X
or 50 of good Y
The opportunity cost for good X is 5 units of Y
if another producer can do
10 good X
or 20 of good Y
The opportunity cost of good X is 2 units of Y
For this second producer, it is more feasible to produce X than the first producer. It renounces to fewer unis of good Y
