The law of diminishing marginal returns holds for a situation in which some inputs are variable and some inputs are fixed.
<h3>What is the law of
diminishing marginal returns?</h3>
The law of diminishing marginal returns states that after some optimal level of capacity is reached in a production process, an additional factor of production would result in a lessening of output (quantity of production).
In this context, we can infer and logically deduce that the law of diminishing marginal returns would only hold for an economic situation in which some inputs are variable and some inputs are fixed.
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Answer:
2.7 times
Explanation:
The computation of the current ratio is shown below:
Current ratio = Current assets ÷ Current liabilities
where,
Current assets = Cash + account receivable + inventory + marketable securities + prepaid expense
= $30,000 + $65,000 + $72,000 + $36,000 + $2,000
= $205,000
And, the current liabilities is
- Account payable + accrued liabilities + short term note payable
= $40,000 + $7,000 + $30,000
= $77,000
So, the current ratio is
= $205,000 ÷ $77,000
= 2.7 times
Answer: a. $56925 ; b. Account payable
Explanation:
a. If Hoffman Company pays the invoice within the discount period, what is the amount of cash required for the payment?
Purchase invoice = $65000
Less: Return = ($7500)
Net Purchase Invoice = $57500
Less: Discount = $57500 × 1% = $575
Cash received = $56925
b. What account is debited by Hoffman Company to record the return?
The account that is debited by Hoffman Company to record the return is the account payable.
