Answer:
A. Jordan specializes in household production, while Chris specializes in marketplace work.
Explanation:
Chris and Jordan both can work for their household. The best way is to achieve maximum utility by using the combination of their skills. Chris can go for household work and Jordan can go for marketplace work. They both can use combination of their specialization to achieve maximum utility.
Answer:
$91
Explanation:
Given the following information,
Direct materials per unit = $54
Direct labor per unit = $20
Variable overhead per unit = $6
Fixed overhead for the year = $462,000
For Absorption costing method, it includes all costs associated with production, including fixed and variable cost. The unit product cost is calculated using direct material, direct labor and total unitary manufacturing overhead.
Unitary cost = (Fixed overhead for the year / Units produced) + Direct materials per unit + Direct labor per unit + Variable overhead per unit
Unitary cost = ($462,000 / 42,000) + $54 + $20 + $6
Unitary cost = $11 + $54 + $20 + $6
Unitary cost = $91
Therefore, the product cost per unit is $91
Answer:
B. Both of these techniques can be used to increase the demand for the product.
Explanation:
A catchy brand name and adequate marketing of a product plays a vital role in the relative demand of that product. Coca cola for example has properly advertised its products for decades now and when one thinks of beverage, you think Coke. It's been embedded in ones mind and that is the advantage of proper advertising and proper brand naming.
Answer:
The profit expected from the two IPOs is $2887.5
Explanation:
For the overpriced IPO,1100 shares would be received and since the share was overpriced by $6.25, an instant loss of $6,875
($6.25*1100) is recorded.
For the under-priced IPO ,550 shares (1100 shares divided by 2) would be received and the immediate gain recorded is $9,762.5(550 *$17.75)
Overall the two portfolios, when taken together,give an immediate gain of $2,887.50(gain of $9,762.50 less loss of $6,875
)
This is power of portfolio diversification, that managing potential investment losses by spreading one's investment.
Answer:
The amount of manufacturing overhead allocated for the year based on machine hours would have been $268,087
Explanation:
For computing the manufacturing overhead amount, first, we have to compute the predetermined overhead rate. The formula is shown below:
Predetermined overhead rate = (Total estimated manufacturing overhead) ÷ (estimated direct labor-hours)
= $238,700 ÷ 20,200 hours
= $11.81
Now the manufacturing overhead equal to
= Actual direct labor-hours × predetermined overhead rate
= 22,700 hours × $11.81
= $268,087
