A C. variable cost <span>cost is a cost whose total amount changes in direct proportion to a change in volume.
If something varies, it means that it changes - and in this case, the cost changes with regards to a change in volume. This means that the cost isn't constant, but rather fluctuates based on other changes too.</span>
Answer:
D. The difference between the rate of return earned on assets (ROI) and the rate of return earned on stockholders' equity (ROE)
Explanation:
Answer:
Option (3) is correct.
Explanation:
Given that,
cost of purchasing Tetter Company's 12% bonds = $50,000
Accrued interest expense = $2,000
The journal entry is as follows:
On April 1,
Investments in debt securities - Tetter Company bonds A/c Dr. $50,000
Interest receivable A/c Dr. $2,000
To Cash $52,000
(To record the purchase of the bonds)
Answer:
%decrease= 16.8%
Explanation:
Giving the following information:
Sales $51,300 (51,300/19= 2,700 units)
Less variable expenses= 32,400 ($12 per unit)
Fixed expenses 12,500
Operating profit $ 6,400
We have to maintain an operating profit of $6,400.
The fixed costs must decrease by an equal amount as the contribution margin. First, we need to calculate the decrease in the total contribution margin.
Decrease in contribution margin= 300 units* (19 - 12)= $2,100
Decrease in fixed costs= $2,100
%decrease= (2,100/12,500)*100= 16.8%
Answer:
They are currently earning an economic profit of $1,600 per year
Explanation:
Economic profit = total revenue - accounting costs - opportunity costs
in this case:
opportunity costs = interest earned by their bond investment + the salaries of the three sisters = ($120,000 x 7%) + ($35,000 x 3) = $8,400 + $105,000 = $113,400
accounting costs = $25,000
total revenue = $140,000
Economic profit = $140,000 - $25,000 - $113,400 = $1,600
