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olga2289 [7]
3 years ago
12

Babak owns a sports practice facility called Boston Batting Cages in Boston, Massachusetts. During the first year of operation,

Boston Batting Cages incurred many costs. In that year, Babak spent $5,000 on labor, $2,000 on maintenance, and $1,000 on electricity. Babak took out a loan to open his business, in which he would have earned $1,500, and his previous job, which he could get back at any time, paid him $50,000.Boston Batting Cages incurred ________ in implicit costs.
a. $51,500
b. $9,500
c. $50,000
d. $8,000
e. $7,000
Business
1 answer:
lions [1.4K]3 years ago
7 0

Answer:

$8000

Explanation:

They have to pay $8,000 as an implicit costs.

The implicit expenditure is the advantage of the right to use the personal resources of a company that is not listed as actual, distinct expenditures.

 Computation of Implicit cost for the Boston Batting Cage :

Implicit cost = Labor + maintenance + electricity

= $5,000 + $2,000 + $1,000

= $,8000

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In developing a flexible budget within a relevant range of activity,
gladu [14]

Answer: d. it is necessary to relate variable cost data to the activity index chosen

Explanation:

The activity index shows how various activities have an impact on the cost of production.

When developing a flexible budget within a relevant range of activity, ome must relate variable cost data to the activity index chosen to ensure that it is indeed variable.

6 0
3 years ago
If Dirk’s Doughnuts is a perfectly competitive firm and is currently incurring economic losses of $500: a. firms will enter the
GenaCL600 [577]

Answer:

The correct answer is option e.

Explanation:

In a perfectly competitive market, there are no limitations on the entry and exit of firms. If the existing firms have positive economic profits, this attracts other potential firms to join the market. In case of losses the firms incurring losses exit the market.  

If Dirk’s Doughnuts is operating in a perfectly competitive market and is incurring economic losses, firms having losses will exit the market.  

This will cause the market supply to decrease. As the supply curve shifts to the left, the price of the product will increase. This will cause profits to increase. The firms will operate at zero economic profits.  

4 0
3 years ago
A revenue tariff is designed to assist more efficient domestic producers, whereas a protective tariff is designed to promote imp
bezimeni [28]

Answer:

False

Explanation:

Revenue tariff means increasing earnings. It will raise government revenue instead of protecting domestic ventures. It is a direct income in the form of tax to obtain from corporate revenues.

On the other hand, protective tariffs are designed to protect domestic producers. It protects local manufacturers by imposing a heavy duty on imported products, which enables the products to become less attractive. Therefore, the aim is to reduce imports.

6 0
3 years ago
Read 2 more answers
G why is the future value always more than the present value?
olya-2409 [2.1K]
The future value is always more than the present value because the value of the dollar can be higher in the next day. plus it can be adding the interest in the future value. 
3 0
2 years ago
Flannery​ Company, a manufacturer of small​ appliances, had the following​ activities, allocated​ costs, and allocation​ bases:
VashaNatasha [74]

Answer:

Cost per letter for the correspondence​ activity= $ 8.75

Explanation:

Flannery​ Company

Given

                                 Activities Allocated      Costs Allocation Base

Account inquiry​ (hours)$ 77, 000                      2,600 hours

Account billing​ (lines) $ 38, 000                         19,000 lines

Account verification​ (accounts) $ 20,000         30,000 accounts

Correspondence​ (letters) $ 14,000                    1, 600 letters

Activities                          Northeast Office        Midwest Office

Account inquiry​ (hours)          100 hours            200 hours

Account billing​ (lines)             10,000 lines          9,000 lines

Account verification​ (accounts) 1 ,000 accounts 650 accounts

Correspondence​ (letters)           50 letters               110 letters

Calculations

Cost per letter for the correspondence​ activity= Total Correspondence/ Total No of letters

Cost per letter for the correspondence​ activity= 14000/1600= 8.75

Cost per letter for the correspondence​ activity= $ 8.75

We divide the activity cost with the corresponding cost driver to get the cost per unit of activity.

4 0
3 years ago
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