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3 years ago

What type of cost involves an evaluation of comparative advantage and disadvantages

Business

1 answer:

vlabodo [156]3 years ago

7 0

Answer:

It is the "opportunity cost."

Explanation:

The "opportunity cost" is considered to be the cost that a person incurs in relation to the benefits of the other option that he didn't choose. When it comes to comparative advantage, this cost is naturally present. Comparative advantage refers to the ability that a person or a business is able to produce a good more efficiently compared to another activity he didn't choose. The opportunity cost plays a vital role here.

When a person/company evaluates the advantages and disadvantages of two options (for example), they will try to weigh these things. If the advantages of one option outweighs the other, the person/company will choose this because it is more efficient. The" opportunity cost" here refers to the cost that they incurred relating to the enjoyment benefits from the other option, as they haven't chosen it.

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Support staff in the office of the president include who?

Alina [70]

In the question mentioned above, we are asked who are the support staff in the office of the president and this includes different people when different job description. These people are the following list enumerated below:
1. Administrators
2. The Cabinet Members
3. The reporters
4. The party leaders

7 0

3 years ago

To guide cost allocation decisions, the ability to bear criterion ________.

hoa [83]

Answer:

the answer is D

Explanation:

Disagree. Cost accounting data plays a key role in many management planning and control decisions. The division president will be able to make better operating and strategy decisions by being involved in key decisions about cost pools and cost allocation bases. Such an understanding, for example, can help the division president evaluate the profitability of different customers The salary of a plant security guard would be a direct cost when the cost object is the security department of the plant. It would be an indirect cost when the cost object is a product. Exhibit 14-1 outlines four purposes for allocating costs:

1. To provide information for economic decisions.

2. To motivate managers and employees.

3. To justify costs or compute reimbursement.

4. To measure income and assets for reporting to external parties.

Exhibit 14-2 lists four criteria used to guide cost allocation decisions:

1. Cause and effect.

2. Benefits received.

3. Fairness or equity.

Ability to bear. The cause-and-effect criterion and the benefits-received criterion are the dominant criteria when the purpose of the allocation is related to the economic decision purpose or the motivation purpose. Using the levels approach introduced in Chapter 7, the salesvolume variance is a Level 2 variance. By sequencing through Level 3 (salesmix and salesquantity variances) and then Level 4 (marketsize and marketshare variances), managers can gain insight into the causes of a specific sales-volume variance caused by changes in the mix and quantity of the products sold as well as changes in market size and market share. The total salesmix variance arises from differences in the budgeted contribution margin of the actual and budgeted sales mix. The composite unit concept enables the effect of individual product changes to be summarized in a single intuitive number by using weights based on the mix of individual units in the actual and budgeted mix of products sold. A favorable salesquantity variance arises because the actual units of all products sold exceed the budgeted units of all products sold. The salesquantity variance can be decomposed into (a) a marketsize variance (because the actual total market size in units is different from the budgeted market size in units), and (b) a market share variance (because the actual market share of a company is different from the budgeted market share of a company). Both variances use the budgeted average contribution margin per unit.

8 0

3 years ago

Fields Cutlery, a manufacturer of gourmet knife sets, produced 20,000 sets and sold 23,000 units during the current year. Beginn

Andreyy89

Answer:

Net income under variable costing would be $429,000.

Explanation:

Under the variable costing method the most important point to understand here is that fixed cost of the previous period ( 3000 units in this case ) would not be carried over to current period. Which means that the fixed cost and cost of goods sold be less now and the profit will increase.

NET INCOME =

SALES = $ 1035,000 ( 23,000 X 45 )

(-) COST OF GOODS SOLD = ($ 391,000) ( 23000 X 17 )

( We have multiplied 23,000 units by 17 because now those fixed cost of $5 are not carried forward to this period)

GROSS CONTRIBUTION MARGIN = $1035,000 - $391,000

= $644,000

(-)VARIABLE SELLING AND ADMINISTRATION EXPENSES = ($69,000)

( $115,000 X 60% )

CONTRIBUTION MARGIN = $644,000 - $69,000

= $575,000

(LESS) FIXED COSTS = ($146,000) [ $100,000 + $46,000 ]

1) MANUFACTURING COST = 20,000 X $5

= $100,000

2) SELLING AND ADMINISTRATION EXPENSES = $115,000 X 40%

= $46,000

INCOME = $575,000 - $146,000

= $429,000

8 0

3 years ago

If the marginal propensity to save is 0.2 in an economy, a $20 billion rise in investment spending will increase:

faltersainse [42]

Answer:

D. Consumption by $80 billion.

Explanation:

Marginal propensity to Save = 1 / MPS

= 1 / 0.2

= 5

= $20 billion × 5

= $100 billion

= $100 - $20

= $80 billion

Therefore, a $20 billion rise in investment spending will increase consumption by $80 billion.

4 0

3 years ago

Virtually every business has variable expenses, which move up and down in tight proportion with changes in sales volume or sales

TiliK225 [7]

Answer and Explanation:

Dynamic expenses are pointed to as operating expenses that are the production cost and important to run a business.

common example of the variable cost that depends on sales volume.

The cost of goods sold, that is the equivalent of goods sold to consumers.

Commissions charged from their selling to salespersons.

Fees charged by a company when a customer requires a credit or debit card.

so, we say that when a business increase or decrease their sale volume, their variable cost also gets affected.

3 0

3 years ago