Answer:
either the selling price decreases or the total output decreases
Explanation:
The firm's income statement:
total sales revenue = $120,000
minus total variable costs = ($72,000)
<u>minus total fixed costs = ($15,000) </u>
net profit = $33,000
The long run equilibrium for a monopolistically competitive firm occurs when the firm is making no economic profit since it is charging a price = average total cost.
In this case the average total cost per unit = $6 per unit + ($15,000 / 12,000 units) = $7.25 per unit
Since the firm is currently charging a higher selling price than average total cost ($10 > $7.25), one or two things might happen in the long run:
- selling price will decrease
- output will decrease
Answer:
Cost of goods manufactured = Cost of goods sold + Ending finished goods inventory - Beginning finished goods inventory
Cost of goods manufactured = $22,000 + $46,000 - $10,000
Cost of goods manufactured = $58,000
Explanation: In order to obtain cost of goods manufactured, we need to add cost of goods sold to ending finished goods inventory and deduct beginning finished goods inventory. Ending work-in-process inventory should be ignored because it has been considered before arriving at cost of goods manufactured.
Answer:
option (a) is correct, $ 2400
Explanation:
Given:
Direct materials cost = $ 700
Direct labour cost = $ 1300
Variable overhead = $ 400
Transfer price is relevant cost for Engine division
Now,
the relevant cost is variable cost
Also, variable cost is given as;
variable cost = Direct material + Direct labor + Variable overhead
on substituting the values in the above formula, we get
variable cost = $ 700 + $ 1,300 + $ 400
or
variable cost = $ 2400
Hence, option (a) is correct
Answer:
supply falls and demand remains constant
Explanation:
As illustrated in the attached diagram, if supply shifts to the left (reduces) it result in a shortage of supply. Price rises to a new equilibrium point (P1 to P2) above previous price.
In the market when there is shartage of supply of a product, there is more competition by demand to get the scarce resources, in time the equilibrium price rises.
it looks to me that the answer could be C
Explanation:
it may be C