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lutik1710 [3]
3 years ago
7

True or False. Suppose the minimum average total cost (ATC) of a firm competing in a competitive price-taker market was $1.00 pe

r unit and that the firm's minimum average variable cost (AVC) was $.80 per unit. If the market price was $.75 per unit, a profit-seeking firm would shut down.
Business
1 answer:
nevsk [136]3 years ago
6 0

Answer:

True

Explanation:

At least in the short run the company will stop production since the contribution margin will be negative: variable costs are higher than selling price, so the company is losing money with every unit it produces.

The company should start producing again as soon as the price increases and the contribution margin is positive. This way the company will at least be able to cover some of its fixed costs.

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The following information is known for the month of December: Purchases of supplies during December total $4,500. Supplies on ha
4vir4ik [10]

Answer:

1. a.) Dr Supplies 4500

               Cr Cash          4500

  b.)  Dr Supplies expense  1000

                            Supplies            1000

2.a.) Dr Prepaid insurance 24000

                   Cr  Cash                 24000

  b.) Dr  Insurance expense   2000

                           Cr Prepaid insurance    2000

3. Dr Salaries expense  16000

                       Cr Salaries payable 16000

4.a.)Dr  Cash          4500

                 Advance rent     4500

  b.)Dr Rent expense   1500

                     Cr     Advance rent    1500

Explanation:

1.Supplies were purchased on cash and at the end of period supplies were on hand was 3500 so 1000 was of supplies were used.

2. Annually  insurance prepaid was 24000=2000 * 12.so

For the month of Dec was 2000 expense.

3.Salaries for the month of Dec was payable of Rs.16000.

4.As cash was received against rent which was unearned.the rent expense for the month of Dec was = 4500/3=1500.

5 0
4 years ago
West Company estimates that overhead costs for the next year will be $3,600,000 for indirect labor and $820,000 for factory util
Nadya [2.5K]

Answer:

$ 34

Explanation:

Overhead cost $3,600,000

Factory utilities $820,000

Machine hours $130,000

Overhead cost + Factory utilities/ Machine hours

($3,600,000 + $820,000) = $4,420,000

$4,420,000 /130,000 = $34

direct labor hours per hour= $34

The company overhead rate is $34

4 0
3 years ago
Type the correct answer in the box. Spell all words correctly. Which term describes a list of all ledger accounts that businesse
Gnom [1K]

Answer:

General Legder

Explanation:

A general ledger is a title given to the entire accounting system of a company. The general ledger comprises all the accounts used in the bookkeeping system of a company. It sorts and summarizes a company's financial transactions.

The general ledger keeps and maintains information required to prepare the company's financial statements.

3 0
3 years ago
Read 2 more answers
Thomlin Company forecasts that total overhead for the current year will be $15,500,000 with 250,000 total machine hours. Year to
ki77a [65]

Answer:

The predetermined overhead rate based on machine hours is $62

Explanation:

\frac{Cost\: Of \:Manufacturing \:Overhead}{Cost \:Driver}= Overhead \:Rate

We will distribute the expected overhead cost over the costdriver. In this case, machine hours.

15,500,000/250,000 = 62

each machine hour carries 62 dollars of overhead.

The actual machine hours are used to determinate the applied overhead. While the actual cost it is compared with the applied to look for underapplication or overapplication.

6 0
4 years ago
A decrease in the interest rate paid by a business borrower will increase the likelihood that the firm will be able to repay its
fiasKO [112]

Answer:

(a) True

Explanation:

Knowledge of interest rates helps to manage corporate profits and security prices. Understanding of the relationship between security prices, interest rates and corporate profits is key for cooperate growth.

8 0
3 years ago
Read 2 more answers
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