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Feliz [49]
2 years ago
5

How does an improvement in consumer confidence affect the consumption function and the aggregate demand curve?

Business
2 answers:
puteri [66]2 years ago
3 0
If the consumers are further confident they will expend additional dollars at entirely earnings stage and the consumption function moves upward. This increase in expenditure reasons the aggregate demand curve to move to the right. The ceteris paribus is known as a alteration in interest rates reasons a movement alongside the investment demand curve.
DanielleElmas [232]2 years ago
3 0
If the consumers are more confident, they will spend more at entirely earnings stage, therefore, making  consumption function goes up. This increase in expenditure causes the aggregate demand curve to move to the right. The ceteris paribus is known as an alteration in interest rates causes a movement alongside the investment demand curve.
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1-a. Prepare a contribution format income statement for the game last year. 1-b. Compute the degree of operating leverage. 2. Ma
marishachu [46]

Answer:

1-a. Total Contribution margin is $210,000 and Net operating income is $28,000.

1-b. Degree of Operating Leverage = 7.50

2-a. The expected percentage increase in net operating income for next year is 150%.

2-b. Expected amount of Net Operating Income is $70,000.

Explanation:

Note: This question is not complete. The complete question is therefore provided before answering the question as follows:

Magic Realm, Inc., has developed a new fantasy board game. The company sold 15,000 games last year at a selling price of $20 per game. Fixed costs associated with the game total $182,000 per year, and variable costs are $6 per game. Production of the game is entrusted to a printing contractor. Variable costs consist mostly of payments to this contractor.

Required:

1-a. Prepare a contribution format income statement for the game last year.

1-b. Compute the degree of operating leverage.

2. Management is confident that the company can sell 18,000 games next year (an increase of 3,000 games, or 20%, over last year). Given this assumption:

a. What is the expected percentage increase in net operating income for next year?

b. What is the expected amount of net operating income for next year? (Do not prepare an income statement; use the degree of operating leverage to compute your answer.)

Explanation of the answer is now provided as follows:

1-a. Prepare a contribution format income statement for the game last year.

The contribution format income statement for the game last year can be prepared as follows:

Magic Realm, Inc.

Contribution Income Statement

For Last Year

<u>Details                               Total ($)       Per Unit ($)   </u>

Sales                                 300,000              20

Variable cost                <u>    (90,000)   </u>          <u>  (6) </u>

Contribution margin         210,000               14

Fixed expense                <u> (182,000) </u>

Net operating income   <u>   28,000  </u>

1-b. Compute the degree of operating leverage.

Degree of Operating Leverage = Contribution Margin / Operating Income = $210,000 / $28,000 = 7.50

2-a. Management is confident that the company can sell 18,000 games next year (an increase of 3,000 games, or 20%, over last year). Given this assumption: What is the expected percentage increase in net operating income for next year?

Since:

Degree of Operating Leverage = Percentage change in Operating Income / Percentage change in Sales

Substituting the relevant values, we have:

7.50 =  Percentage change in Operating Income / 20%

Percentage change in Operating Income = 7.5 * 20% = 150%

Therefore, the expected percentage increase in net operating income for next year is 150%.

2-b. Management is confident that the company can sell 18,000 games next year (an increase of 3,000 games, or 20%, over last year). Given this assumption: What is the expected amount of net operating income for next year? (Do not prepare an income statement; use the degree of operating leverage to compute your answer.)

This can be calculated as follows:

Change in Net Operating Income = 150% * $28,000 = $42,000

Expected amount of Net Operating Income = Current Net Operating Income + Change in Net Operating Income = $28,000 + $42,000 = $70,000

6 0
3 years ago
Dave Malloy is a marketing director for the Redding Company. His recent trip to a developing Asian country got off to an awkward
xxMikexx [17]

Answer:

d. cultural

Explanation:

Cultural barrier -

It is the expectation or rule according to any culture which prevents someone for any other culture from being included .

The most common cultural barriers are the religion and language .

Same is the case with Dave Malloy , as he treated the with a hearty handshake , but did not get a warm or good regards from the other person .

Because for each and every cultural and religion , the method of welcoming someone is different , hence , the case given in the question is of cultural barrier .

8 0
3 years ago
In 1990, Johnson Company purchased a building for $170,000. In 2020, a real estate professional says the building has a fair val
Julli [10]

Answer:

$170,000.00

Explanation:

The amount of $170,000.00 will still be recorded as the value of the building, before considering accumulated depreciation.

<em>Fair value</em> of $1,000,000.00 or <em>selling price</em> of $900,000.00 does not affect the original value of the building in the company's balance sheet.

4 0
3 years ago
Answer completely and correctly please.
spin [16.1K]

Answer:

Explanation:

                                  September      October      Nov    December

Opening cash balance  - 9250          3490      3290       3090

Football tickets                (160)    

Entertainment                  (250)            (250)    (250)       (250)

Tuition fee                        (4,800)

Rent                                    (600)           (600)     (600)      ( 600)

Food                                   (550)           (550)      (550)       (550)

Apartment deposit            (600)                                           600

Earning                               1200           1200       1200        1200

                                           3490              3290     3090      3490

Covaig Kovar does not have enough cash for the tuition

The projected cash balance of $3490 is less than the tuition of $4800 by  $1310

With this budget he is able to realize that he needs to augment his cash inflow or cut his expenses to meet up

5 0
2 years ago
Morgan and Flynn owned a partnership business that was facing financial difficulties. The debts of the business were getting out
ahrayia [7]
<span>They can file the bankruptcy code under chapter 11. 

</span>This chapter of the Bankruptcy Code generally provides for reorganization, usually involving a corporation or partnership. A chapter 11 debtor usually proposes a plan of reorganization to keep its business alive and pay creditors over time. People in business or individuals can also seek relief in chapter 11<span>.
</span>
I hope my answer has come to your help. God bless and have a nice day ahead!
8 0
3 years ago
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