Answer:
Given:
Demand = 15,000
Initial investment = $256,000
Variable cost = $15
Selling price = $30
Here, we'll first compute break-even quantity :
i.e.
From above we can state that the demand is less than break-even quantity i.e. in this case the organization will not be able to recover the investment made.
<u><em>Therefore, the company's total margin will be less than its investment. </em></u>
<u><em>The correct option is (b)</em></u>
Answer:
$858,500
Explanation:
Cash paid for operating expenses = Operating expenses + Prepaid rent increase - Salaries payable increase
= $855,000 +$17,000 - $13,500
= $858,500
Answer:
It's called a Normal Good
Explanation:
Normal Goods are a type of goods whose demand shows direct relations with a consumer's income. The consumption of a normal good increases with the increase of a consumer's income, if the income decreases the consumption decreases.
Normal goods have a positive income elasticity of demand. Income elasticity of demand measures the magnitude with which the quantity demanded for a good changes in reaction to a change in income. A normal good has an income elasticity positive, but minor to one.
In this case, if the price of a good increases, the income of the consumer decreases, therefore it consumes fewer quantities of the product. An example of a normal good is Organic food.
An inferior good has an income elasticity of demand negative, meaning that if the income increases, the consumption decreases. An example of an inferior good is margarine if the income increases, consumers will start buying a superior product like butter.
A Luxury good presents an income elasticity of demand superior to one. The consumption of a luxury product increases more than proportional to the increase in income. An example of a luxury good is luxury cars.
Answer:
Retained earnings, December 31, 2016 = 26,700
Explanation:
The Statement of Retained Earnings can be prepared as follows:
SMART TOUCH LEARNING
Statement of Retained Earnings
For the month ended December 31, 2016
<u>Details Amount </u>
Retained earnings, December 01, 2016 13,000
Net income for the month 46,800
Dividends <u> (33,100) </u>
Retained earnings, December 31, 2016 <u> 26,700 </u>
Note: No currency sign is used in the answer in order to avoid confusion because no currency is used in the question itself.