Answer:
B) $7
Explanation:
The computation of the consumer surplus is shown below:
Consumer surplus = Willing to pay - Market price
For Austin, The consumer surplus = $10 - $6 = $4
For Erin, The consumer surplus = $9 - $6 = $3
So, the total consumer surplus = $4 + $3 = $7
Simply we deduct the market price from the willing to pay so that the consumer surplus can be computed
Answer:
The nature of the major raw material requires to produce the product of the business determines the level of importance attached to locating a business closer to raw materials.
Explanation:
The level of importance attached to locating a business closer to raw materials depends on the nature of the major raw material requires to produce the product of the business.
When the major raw material requires to produce the product of the business is a heavy raw material that cannot be easily transported, locating the business closer to the raw material will be the most important factor.
However, when the major raw material requires to produce the product of the business can be easily be transported, locating the business closer to raw materials will NOT be the most important factor. In this case, some of the other important factors to consider will include proximity to markets; availability of labour; water supply; availability of power, fuel or gas; waste products disposal facility and among others.
Answer:
Adriana Corporation
Using the High and Low method the Variable and Fixed portions of the Total Cost is:
Fixed Costs = $247,420
Variable Costs = $39.50 Per unit x 8,020 Machine Hours = $316,790
B. at an average of 7,500hrs Machine hours, the estimated Overhead costs = $247,420 x (39.50 x 7,500)
= $543,670
Explanation:
The High and Low Method is a costing method which attempts to split the mix of Fixed and Variable costs in a mixed Total cost of production by looking at one element of variability (in this case Machine Hours)
It is a subjective approach, however simple to calculate. Other method is the regression analysis, which is more complex in comparison to the high and Low
The attached excel file shows how we derived the Variable and Fixed Costs element of the Overhead Costs
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Answer:
purchases = 160000
Explanation:
given data
beginning inventory = $140,000
amount of inventory on hand = $80,000
net sales = $400,000
gross profit rate = 40%
solution
we first Computation of cost of goods sold hat is
Gross profit rate = 
× 100
= 
= = 
= 100 Gross profit = 16000000
so
Gross profit = 160000
and
Cost of goods sold is = sales - gross profit
so
Cost of goods sold = 400000 - 160000
Cost of goods sold = 240000
and
Cost of goods sold = opening inventory + purchases - closing inventory
so put here value
240000 = 140000 + purchases - 60000
so purchases = 160000
Answer:
126,000
Explanation:
56,000/4 = 14,000
5*14,000 = 70,000
56,000 + 70,000 = 126,000
