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Mnenie [13.5K]
2 years ago
13

Suppose labor productivity differences are the only determinants of comparative advantage, and Brazil and Chile both produce onl

y coffee and sugar. In Chile, either 5 units of coffee or 2 units of sugar can be produced in one day. In Brazil, a day of labor produces either 2 units of coffee or 1 unit of sugar.
Refer to Scenario 34-1. Which country has a comparative advantage in producing sugar?

Select one:

a. Brazil only
b. Chile only
c. Both countries
d. Neither country
e. It cannot be determined with the information given.
Business
1 answer:
o-na [289]2 years ago
4 0

Answer:

The correct answer is letter "A": Brazil only.

Explanation:

Comparative advantage is the ability of an organization or individual to produce at lower opportunity costs. This is achieved by introducing efficient productivity strategies or achieving economies of scale.

For the case given, the comparative advantage of Brazil and Chile is based on labor productivity only. Then:

  • <em>The comparative advantage of Chile on sugar</em> = \frac{2 units of sugar}{5 units of coffee} = 0.4
  • <em>The comparative advantage of Brazil on sugar </em>= \frac{1 unit of sugar}{2 units of coffee} = 0.5

Thus, <em>Brazil has a comparative advantage over Chile on sugar.</em>

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3 years ago
Gilberto manages a grocery store in a country experiencing a high rate of inflation. To keep up with inflation, he spends a lot
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Answer:

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Explanation:

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2 years ago
Eli and Marilyn ask Gracie to be the administrator of their will and the guardian of their children if they pass away before the
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a. involve a high degree of trust and confidence.

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3 years ago
White Company has two departments, Cutting and Finishing. The company uses a job-order costing system and computes a predetermin
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Question not complete

Direct Labour Cost is missing

Direct Labor Cost ----- $50,000.00 $270,000.00

Answer:

a.

Overhead Rate (Cutting Department) = $5.5 per machine hour = $5.5 per machine hour

Overhead Rate (Finishing Department) = $12.2 per labour hour

b. Total Manufacturing Cost = $644

c. Yes

Explanation:

a. Compute the predetermined overhead rate to be used in each department.

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Cutting Department

The Cutting Department bases its rate on machine-hours

Manufacturing Overhead Costs = $264,000

Machine Hours = 48,000

Finishing Department

The Finishing Department bases its rate on direct labor-hours.

Manufacturing Overhead Costs = $366,000

Direct Labour Cost = $270,000

Overhead Rate (Cutting Department) = Manufacturing Overhead Cost/Machine Hours

Overhead Rate (Cutting Department) = $264,000/48,000

Overhead Rate (Cutting Department) = $5.5 per machine hour

Overhead Rate (Finishing Department) = Manufacturing Overhead Cost/Machine Hours

Overhead Rate (Finishing Department) = $366,000/$270,000

Overhead Rate (Finishing Department) = 1.36

Overhead Rate (Finishing Department) = 136% direct labour cost

b.

The Cutting Department bases its rate on machine-hours

Given

Machine hours = 80 machine hours

Overhead Rate = $5.5 per machine hours ------ Calculated

The Finishing Department bases its rate on direct labor-hours.

Given

Direct Labour Cost = 150

Overhead Rate = 136% labour cost ------ Calculated

Overhead Applied (Cutting Department) = 80 * 5.5

Overhead Applied = 440

Overhead Applied (Finishing Department) = 136% * 150

Overhead Applied = $204

Total Overhead Applied = $440 + $204

Total = $644

c. Yes

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