Jackson will be paying $100 more than his father.
Answer:
a. Dave has a COMPARATIVE ADVANTAGE in the production of sweaters.
Explanation:
If both Dave and Caroline produce sweaters and socks. If Dave's opportunity cost of producing 1 sweater is 3 socks, and Caroline's opportunity cost of producing 1 sweater is 5 socks, then Dave has a COMPARATIVE ADVANTAGE in the production of sweaters.
Comparative advantage can be defined as an economy's ability to produce goods and/or services at a lesser opportunity cost than other countries.
In the end comparative advantage gives a country the ability to sell those goods and services that he could produce at lower opportunity costs; cheaper to other countries.
This definition adequately describes the position of Dave in relation to caroline, in the given Scenario.
Answer:
Hodge Company
Calculation of Estimated Loss on Inventory in the
Flood Using Gross Margin (Profit) Method
November 21, 2016
Inventory at November 1, 2016 $96,000
Purchases from November 1, 2016 <u>$131,000</u>
to date of flood
Cost of goods available for sale $227,000
<u>Estimated cost of goods sold:</u>
Net sales from November 1, 2016 $250,000
to date of flood
Less: Estimated gross margin <u>$75,000</u> <u>$175,000</u>
(250,000 * 30%)
Estimated cost of inventory at date of flood $52,000
Less: Salvage goods <u>$9,200</u>
Estimated loss on inventory in the flood <u>$42,800</u>
