Calculation of Direct Material Budget for the month of July:
Budgeted production (Units) for July 5,000
Material required per unit (pounds) 3
Material requirement for July (pounds) = (5000 units * 3 pounds) 15,000
Add: Ending material inventory (5300 units * 3 pounds* 30%) 4,770
Less: Beginning material inventory 4,500
Direct Material Purchase (Pounds) (15000+4770-4500) = 15,270
Cost per pound of Metrial ($) $6.00
Direct Material Purchase ($) (15270 pounds * $6) = $91,620
Answer:
Two categories of expenses in merchandising companies are c. cost of goods sold and operating expenses
Explanation:
Merchandising Companies will incur direct expenses related to their trading activities in relation to each of their sales and these are known as cost of goods sold. Cost of Goods Sold is an expense in the Trading Account.
However, the Merchandising Company will also incur other indirect expenses to maintain its trading and are not directly related to each sale of their merchandise. For example the cost of Administration Work and Depreciation of its equipment. These are known as Operating Expenses. Operating Expenses are expenses in the Profit and loss Account
Answer:
D. measures the degree to which one input can be substituted for another, output held constant.
Explanation:
Marginal Rate of Technical Substitution is the rate at which producer gives up one input, in exchange of other input, maintaining the same output level.
So implicatively, it denotes the degree to which one input can be substituted for another, output held constant.
MRTS (K,L) = MP L / MP K = w / r ; Where :-
K = Capital, L = Labour, MP L = Marginal Productivity of Labour, MP K = Marginal Productivity of Capital, w = Wages, r = Rent
MRTS is diminishing, because of decreasing marginal productivities of factor inputs.
