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Alex777 [14]
3 years ago
9

Chiquita produces bananas for an average explicit cost of $0.25 per banana and sells 1 million bananas per week for a price of $

0.50 per banana. The implicit costs per week are $200,000. Which of the following statements is true?a. Chiquita makes an accounting profit of $250,000 b. Chiquita makes an accounting profit of $50,000. c. Chiquita makes an economic profit of $250,000. d. Chiquita makes an economic profit of $450,000. e. More than one answer is correct
Business
1 answer:
Sergio039 [100]3 years ago
5 0

Answer:

Option (A) is correct.

Explanation:

Given that,

Implicit costs per week = $200,000

Average explicit cost per banana = $0.25 per banana

Per week bananas sold = 1 million

Explicit cost = Average explicit cost per banana × No. of banana sold

                    = $0.25 × 1,000,000

                    = $250,000

Total revenue = No. of banana sold × Selling price of each banana

                        = 1,000,000 × $0.50

                        = $500,000

Accounting profit = Total revenue - Explicit cost

                             = $500,000 - $250,000

                             = $250,000

Economic profit:

= Total revenue - Explicit cost - Implicit costs

= $500,000 - $250,000 - $200,000

= $50,000

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Answer:Incomplete Question, You omitted the values for the following

supplies remaining at year-end: $700

Wages earned by workers but not yet paid at year-end: $500

Explanation:

1. To Record the journal entries required for December, excluding the December 31 year-end adjusting entries.

Cash Paid for prepaid insurance

Date            Account and Explanation     Debit         Credit

1st Dec   Prepaid Insurance                  $24,000

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Supplies purchased in cash

7th Dec      Supplies                                   $2000

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13th Dec     No ENTRY            Roland Co agreed to do but has not done itr yet.

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Date            Account and Explanation     Debit         Credit

31st Dec  Insurance Expense                   $1,000

        Prepaid Expense                                                    $1,000

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Date            Account and Explanation     Debit         Credit

31st Dec  Supplies  Expense                   $1,300

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31st Dec  Wages   Expense                   $500

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31st Dec  Accounts receivable                 $6,000

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