Answer:
Accounting profit = $45,000
Economic profit = $5,000
Explanation:
The computation of accounting profit and economic profit is shown below:-
Accounting profit = Sales - External expenses
= $75,000 - $30,000
= $45,000
Economic profit = Accounting profit - Implicit cost
= $45,000 - $40,000
= $5,000
Therefore for computing the accounting profit and economic profit we simply applied the above formula so that each one could arrive
Answer: Common and Preferred Stock Purchasers
Explanation:
Answer:
$20.
Explanation:
As the question require us to calculate the profit when one unit in excess of break-even point is sold, so we have to calculate the break-even quantity first. The formula to calculate the break-even quantity is:
Break-even Units = Fixed Cost / (Contribution Margin Per Unit)
where
Contribution margin per unit = Selling price per unit - variable cost per unit
⇒ Break-even units = 15 / (50 - 30) = .75.
This makes the one unit in excess of break-even volume to be 1.75. Now, we have to draft the income statement to determine the operating profit when sales volume is 1.75.
Income Statement
Revenue (50 * 1.75) $87.5
Variable Cost (30 * 1.75) (52.5)
Fixed Cost (15)
Operating Profit $20
Answer: The correct answer is "a. the dollar will depreciate and the peso will appreciate.".
Explanation: If the inflation rate in the United States rises relative to the inflation rate in Mexico, it follows that the dollar will depreciate and the peso will appreciate.
As inflation in the United States is higher, the dollar is affected by a loss of purchasing power, therefore it depreciates with respect to the Mexican peso.
