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3 years ago

Market efficiency and market failure

Business

1 answer:

bulgar [2K]3 years ago

8 0

Missing Part of Question:

The related graph was not present with the original question, so I am attaching it here.

Explanation:

$Q_{E} \;=\;Equilibrium\;Quantity\\$

(a) In a free market, at a quantity exactly equal to $Q_{E}$ , the value of a unit to a buyer is equal to the cost of a unit to a seller. For a quantity below $Q_{E}$ , the value of unit to a buyer is greater than the cost of that product to the seller. Finally, for a quantity above $Q_{E}$ , the value of that unit to the buyer is less than the cost incurred by the seller.

(b) The dumping of toxic chemicals is a typical scenario of Negative Externality which may lead to Market Failure due to poor display of supplier reputation.

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Edgar, Inc. has a materials price standard of $2.00 per pound. Six thousand pounds of materials were purchased at $2.20 a pound.

Lerok [7]

Answer:

Total Material Variance = $2,400 Unfavorable

Explanation:

Total Materials Variance = Standard Cost - Actual Cost

Here, standard cost = Standard Quantity $\times$ Standard Rate

Standard quantity for actual output = 5,400

Standard Rate = $2.00 per pound

Standard Cost = 5,400 $\times$ $2.00 = $10,800

Actual Cost = Actual Quantity $\times$ Actual Rate

= 6,000 $\times$ $2.20 = $13,200

Total Material Variance = $10,800 - $13,200 = - $2,400 Unfavorable

Since the value is negative the variance is unfavorable, as actual cost is more than standard cost.

8 0

4 years ago

Bella, Inc. manufactures two kinds of bagstotes and satchels. The company allocates manufacturing overhead using a single plantw

AysviL [449]

Answer:

See below

Explanation:

Given that estimated overhead costs for the year = $25,750

Bagstotes:

Direct materials cost per unit = $33

Direct labor cost per unit = $52

Number of units = 520

Satchels

Direct materials cost per unit = $44

Direct labor cost per unit = $60

Number of units = 370

Estimated direct labor =

(Direct labor cost per unit × No of units) of totes + (Direct labor cost per unit × No of units) of Satchels

= ($52 × 520) + ($60 × 370)

= $27,040 + $22,200

= $29,240

Predetermine overhead allocation rate:

= Estimated overhead / Estimated direct labor × 100

= $25,750 / $29,240 × 100

= 88.06%

8 0

3 years ago

Jager Inc. holds 30% of the outstanding voting shares of Kinson Co. and appropriately applies the equity method of accounting. A

Kazeer [188]

Answer:

$ 13,750

Explanation:

Calculation to Determine the amount of Equity in Investee Income that Jager should have reported for 2018

First step is to calculate the intercompany unrealized gain

Remaining inventory — end of year $ 50,000

Gross profit percentage ($33,600 ÷ $96,000)x 35%

Profit within remaining inventory$ 17,500

Intercompany unrealized gain$ 5,250

(Ownership percentage 30%*$ 17,500=$5,250)

Now let calculate the amount of Equity in Investee Income that

Equity in investee income:

Equity income accrual $ 30,000

($100,000 x 30%)

Less Deferral of intercompany unrealized gain ($5,250)

Less Goodwill amortization ($ 11,000)

Equity in investee income$ 13,750

($30,000-$5,250-$11,000)

Therefore the amount of Equity in Investee Income that Jager should have reported for 2018 will be $ 13,750

3 0

3 years ago

What is viability and relevancy of insurance products sold to businesses and individual

weqwewe [10]

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8 0

3 years ago

Sally is buying a home and the closing date is set for april 20th. the annual property taxes are $1,234.00 and have not been pai

Tpy6a [65]

Answer:

Sally (the buyer) should pay $865.58 and the seller should pay $368.42.

Explanation:

First we must determine property taxes per day = $1,234 / 365 = $3.38 per day

The seller is responsible for the property taxes until the closing date = 31 days for January + 28 days for February + 31 days for March + 19 days for April = 109 days x $3.38 per day = $368.42

Sally would be responsible for the remaining taxes = $1,234 - $368.42 = $865.58

4 0

4 years ago