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3 years ago

If the price of a complement decreases, what

Business

1 answer:

Nataliya [291]3 years ago

7 0

Answer:

Demand will rise.

Explanation:

Complement goods are products used together to meet a particular need. Examples of complementary goods include tea and sugar, printer and Ink Cartridges, cars and petrol.

If the prices of a complement good fall, then the demand for the other commodity increases. It will be cheaper for consumers to use both goods together. For instance, if the price of sugar falls, consuming tea will be less expensive, which increases its demand.

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Keith Inc. has 4 product lines: sour cream, ice cream, yogurt, and butter. Demand of individual products is not affected by chan

pochemuha

Answer:

Dropping Sour would lead to a net loss of $(1,900)

Explanation:

To determine whether or not it will be profitable to drop a loss making product, we compare the savings in fixed cost to the lost contribution from dropping it.

It is noteworthy that only the fixed cost attributed to the product would be saved should it be discontinued.

The incremental analysis is done as follows:

Direct fixed cost of Sour = 30%× 7,000 = 2,100

Lost contribution = sales value - variable cost = 10,000-6,000= 4,000

Lost contribution (4,000)

Savings in fixed cost 2,100

Net loss in contribution (1,900)

Dropping Sour would lead to a net loss of $(1,900)

8 0

3 years ago

IOP Company purchased a machine on 1/1/22 costing $500. Estimated life was 5 years; estimated salvage value was $100. In 2025, I

Fittoniya [83]

Answer:

The Prior Period Adjustment to be recorded in 2025 will include a $90 debit as adjustment to Retained Earnings

Explanation:

Correct depreciation would have been = ($500-$100)/5 = $80

Depreciation charged wrongly as ($500-$400)/8 = $50

Therefore depreciation has been charged short by $30 for three years, thereby reflecting income greater by $30 each year for 3 years.

Since due to wrong depreciation retained earnings is higher by $90, therefore we have to debit retained earnings by $90

7 0

3 years ago

Mighty Safe Fire Alarm is currently buying 60,000 motherboards from MotherBoard, Inc., at a price of $65 per board. Mighty Safe

9966 [12]

Answer:

It is cheaper to make the units in-house.

Explanation:

Giving the following information:

Buy:

Purchase price= $65

Make:

Direct materials= $28 per unit

Direct labor= $8 per unit

Variable factory overhead= $17 per unit.

Fixed costs for the plant would increase by $76,000.

We need to calculate the total cost for each option. The best option is the one with lower total costs:

Buy:

Total cost= 60,000*65= $3,900,000

Make:

Total cost= 60,000*(28 + 8 + 17) + 76,000

Total cost= 3,180,000 + 76,000

Total cost= $3,256,000

It is cheaper to make the units in-house.

4 0

3 years ago

Firms that follow variable-cost pricing Multiple Choice sell their products at lower net prices abroad than in the domestic mark

IgorLugansk [536]

Answer:

Sell their products at lower net prices abroad than in the domestic market

Explanation:

Variable costing is a product costing method where only the variable manufacturing cost like the cost of direct materials ,labor and the variable manufacturing overhead are factored into the cost of production. This does not consider a complete cost like the absorption method of costing and as a result , the final overall cost is lower,

Using variable cost males it possible to sell products at lower net prices abroad compared to the domestics market as the tax laws of various country requires absorption method , hence it is not captures using variable costing.

7 0

3 years ago

If a firm increases its use of capital while holding constant the number of workers employed, the firm is said to experience:

stich3 [128]

Answer:

It is capital deepening (D)

Explanation:

Capital deepening typically represents an increase in the capital-labor ratio. This arises when there is infusion of additional capital(e.g technological improvement) into the production processes while work force is either kept constant or cut-down and thereby makes labor to be more productive.

Hence, as the capital-labor ratio increases, the marginal product of labor, i.e. the amount of product that can be produced by supplying one more unit of labor, increases because there are now more units of capital per worker.

8 0

4 years ago