In a free-market economy, a product that entails a negative externality (additional social cost) will be underproduced. A free-market economy is when the government has little or no restrictions and regulations on buyers and sellers in the market. They are essentially 'free' of all control and can base their inputs and outputs off of supply and demand. If there is a negative externality, then there too few items being produced in the economy.
Henry Ford started the Ford Motor Company in the late nineteenth century and revolutionized the manufacturing business across the country.
Answer:
The answer is: Poppy's COGS were understated by $31,000
Explanation:
To find how the cost of goods sold were affected by the accounting errors we must add the errors in the inventory records plus the error in the purchasing records.
- Errors in inventory records = $30,000 understated inventory (Jan 1) - $17,000 understated inventory (Dec 31) = $13,000 understated
- Error in purchasing records = $20,000 real cost - $2,000 record = $18,000 understated
How COGS were affected:
$13,000 understated + $18,000 understated = $31,000 understated
<u>Solution and Explanation:</u>
Assume US Investor need 1000 Pound after 90 days:
Option 1: Forward Option:1000 pound = 1000 multiply with 1.98 = $1980
<u>
Option 2: Invest in UK:
</u>
Need 1000 pound after 90 days
so, Invest in UK pound today 1000 divide by 1.04= 961.5385
to get 961.5385 today he need to pay = 961.5385 multiply with $2 ( Current Spot Rate)
= $1923.077
<u>
Option 3 : Invest in US:
</u>
Need 1000 Pound after 90 days
so forward Exchange rate 1.98 he need 1000 pound* 1.98 = 1980 $ after 90 days
so invest today 1980/1.02 = $1941.176
<u>
Advise: Option 2 is best , Invest in UK Bonds
</u>
Answer: Option (c) is correct.
Explanation:
Gross profit of 30% means that every $1 of Sales require $0.7 of inventory and cost of freight.
So, inventory used to generate sales of $3,630,000:
= $3,630,000 x 0.7
= $2,541,000
Total inventory during the period:
= Beginning inventory + Purchases
= $4,950,000 + $2,049,000
= $6,999,000
Remaining Inventory:
= (Total inventory - Inventory used to generate sales) + freight-in
= ($6,999,000 - $2,541,000) + $234,000
= $4,692,000
