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DedPeter [7]
3 years ago
10

If a company has excess capacity, increases in production level will increase variable production costs but not fixed production

costs.
a. True
b. False
Business
1 answer:
den301095 [7]3 years ago
6 0

Answer; True

Explanation;

When a company has excess capacity, it means that potentially it could produce more than it is producing at the moment. As this potential already takes into account the fixed costs, this means that given the fixed costs it currently has, more goods could be produced on those same fixed costs and they wouldn't increase.

Increasing production level would therefore only increase variable costs which rise whenever production rises as they are directly related to the production of goods.

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Mitchell Corporation bought equipment on January 1, 2017. The equipment cost $300,000 and had an expected salvage value of $50,0
docker41 [41]

Answer:

$250,000

Explanation:

The depreciable cost of the equipment is the amount that will be used to provide for depreciation on the asset also known as Depreciable Amount.

<em>Depreciable Cost = Cost - Salvage Value</em>

therefore,

Depreciable Cost = $300,000 - $50,000 = $250,000

8 0
3 years ago
If a seller requires an intermediary to purchase a supplementary product to qualify to purchase the primary product the intermed
Mashcka [7]

Answer:

A Tying Contract

Explanation:

If a seller requires an intermediary to purchase a supplementary product to qualify to purchase the primary product the intermediary wishes to buy, it results in a tying contract. It is mostly treated as an illegal because it pushes  intermediary organization to buy other products if they wishes to purchase the products which is actually needed to be purchased. Some companies make it compulsory for their intermediaries in doing so. For example, if you have to buy 10 packs of Lays, then you must be buying 5 extra boxes of Pepsi as well. It is being done because of the power and market share that company is enjoying in the market, so they take its advantage.

7 0
3 years ago
Suppose the black market shrinks because firms shift to the formal sector, but production remains the same. GDP
nikdorinn [45]

Answer: will increase but this will not affect living standards

Explanation:

GDP is sometimes called an incomplete measure because there are certain measures that it does not include such as the black market.

If firms in the black market shift to the formal sector, they will now be included in GDP which means that GDP will increase.

The living standards of people in the country will probably not change however because the firms involved were simply shifting sectors and are not said to be more or less prosperous as a result. Assuming they remained the same, nothing changes for living standards.

4 0
3 years ago
"Makers Corp. had additions to retained earnings for the year just ended of $213,000. The firm paid out $183,000 in cash dividen
yuradex [85]

Answer:

Dividends per share is $1.66

Book value per share is $44.36

Market-to-book ratio is 1.42

Price-earnings ratio is 32.54

Price-sales ratio is 1.97

Explanation:

1 ) What are dividends per share?

Dividends per share = cash dividends/ number of shares = $183,000/ 110,000 = $1.66

2) What is the book value per share?

Book value per share = total equity/ number of shares = $4,880,000 / 110,000 = $44.36

3) If the stock currently sells for $63 per share, what is the market-to-book ratio?

Market-to-book ratio = $63/ $44.36 = 1.42

4) What is the price-earnings ratio?

The price of Makers Corp. = market price * number of shares = $63* 110,000 = $6,930,000

Price-earnings ratio = $693,000/ $213,000 = 32.54

5) If the company had sales of $3.52 million, what is the price-sales ratio?

Price-sales ratio = market price/ sales = $6,930,000/ $3,520,000 = 1.97

6 0
3 years ago
In the local paper, a car dealership advertises a small used car for a great price and a low interest rate loan. When Patrice co
Shkiper50 [21]

Answer:

False advertising.

Explanation:

The car dealership is showing some advertising that caughts public atention because it offers lower rates and cheap prices for a product that it may not even exist. This is why is called false advertising, because at the time costumer arrives to the dealership asking for the car advertised, they try to sell a different product that is even more expensive.

5 0
3 years ago
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