Answer:
a positive technology shock
Explanation:
Technology is part of the capital factor of production, and it is the most important way of increasing the quality of capital. An increase in the quality of capital means that given a same amount of capital (e.g one machine), labor will be able to produce a larger output (an increase in productivity). Technological improvements are usually achieved through research and development.
Technological improvements also affect the land factor since they can reduce the use of natural resources and wastes, although the largest impact is usually made on labor productivity.
When a country's productivity increases, real GDP might increase above full employment level because less workers are needed to produce larger outputs.
Answer: Option (b) is correct.
Explanation:
Entrepreneurs are willing to take risks because they know that the patent and copyright provides them an opportunity or right to sell their product for a period of time.
This is due to the fact that entrepreneurs are protected by the patent and copyrights. Patent and copyright gives entrepreneurs an opportunity to earn profit by selling their product but these patent and copyrights are for a certain period of time. It protects entrepreneurs from the other competitors in the market who are producing similar products.
When $25,000 of fixed costs will be eliminated by discontinuing, the operating income will increase by $5000.
<h3>How to calculate the operating income?</h3>
From the complete information given, the impact on operating income will be calculated thus:
= Savings fixed cost - Loss on contribution margin
= $25000 - $20000
= $5000
Therefore, the operating income will increase by $5000.
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Answer:
Predetermined overhead rate=$19.5/machine hour
The company applied $877500 to the units produced.
Explanation:
a) Pre-determined overhead rate= <u>Budgeted overhead manufacturing cost</u>
Estimated number of machine hours
=975000/50000=$19.5/machine hour.
b)Applied overhead = Pre-determined overhead rate * Actual machine hours
= 19.5 * 45000
=$877500.
c.
In traditional costing we use as base for calculating overhead rate is machine hours or labor hours but in activity based costing we identify activity that consume resources,identify cost driver of each activity,compute cost rate per cost driver unit and finally assign cost to products by multiplying cost driver rate.
Predetermined overhead rate= estimated overhead/Estimated base (cost driver).
The U.S. dollar is fiat money, as are the euro and many other major world currencies. This approach differs from money whose value is underpinned by some physical good such as gold or silver, called commodity money. The United States, for example, used a gold standard for most of the late 19th and early 20th century
