Answer:
The correct answer is option b.
Explanation:
A steep demand curve implies that the demand is relatively inelastic. In other words, a significant change in price will cause a small change in the quantity demanded.
A flatter demand curve, on the contrary, implies that a small change in price will cause a greater change in quantity demanded. In other words, demand is relatively elastic.
A change in price will not cause demand to change if the elasticity of demand is perfectly inelastic or when the demand curve is a vertical line.
A change in demand will be equal to the change in price if demand is unitary elastic.
Answer:
The Cool Sky product cost per unit is $102.
Explanation:
To determine the product cost per unit using the absorption costing we find the per unit rate for Fixed Overheads for the year as follows,
Total Fixed overheads for the year / Units produced during the year
$528,000 / 44,000 unit = $12 per unit.
Total Cost per unit = Direct Material per unit + Direct labor per unit + Variable overhead per unit + Fixed Overhead per unit.
Total Cost per unit = $60 + $22 + $8 + $12
Total Cost per unit = $102 per unit.
Answer:
$2,500
Explanation:
Bad debts are debts that have been estimated to be irrecoverable, in that case such debts are normally written off to profit and loss account and eliminated by a credit entry to the debtors account.
The allowance for doubtful accounts are provisions made for debts in the account receivable accounts that may be considered doubtful of collection.
The accounting entry for doubtful debt is a debit to profit and loss account and a credit to provision for doubtful debt account. Provision for doubtful debt is made after bad debt has been deducted from the debtors account.
Therefore 5% of $50,000 = $2,500 represents provision for bad debt.
Answer:
D
Explanation:
To get it out of your way
Answer:
The weight of the risky stock is 67.95% while that of the risk free asset is 32.05%
Explanation:
The two stock portfolio is made up of a risk free asset and a risky asset. Thus the portfolio beta is the weighted average of the individual sstock's betas. The beta for the risk free asset is zero.
Using the portfolio beta equation, we can calculate the weight of each stock in the portfolio.
Portfolio beta = rA * beta of A + rB * beta of B
Let x be the weight of the risk free asset in the portfolio. The weight of risky asset will be 1-x.
1.06 = x * 0 + (1-x) * 1.56
1.06 = 1.56 - 1.56x
1.06 - 1.56 = -1.56x
-0.5 / -1.56 = x
x = 32.05%
Thus, the weight of the risk free asset be 1 - 0.3205 = 0.6795 or 67.95%