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Sophie [7]
3 years ago
8

The accounting hired by Forever Fitness have determined total fixed cost to be $75,000, total variable cost to be $130,000, and

total revenue to be $125,000.
Because of this information, in the short run, Forever Fitness should:


a) lower their prices to increase their profits.

b) stay open because the firm is making an economic profit.

c) stay open because shutting down would be more expensive.

d) shut down because staying open would be more expensive.
Business
1 answer:
yan [13]3 years ago
5 0

Answer:

Option D. Shut down because staying open would be more expensive.

Explanation:

The reason is that the total variable cost is lower than the total revenue which means the company can not reduce its variable cost so it is meaningless to produce the product. So the best option left is not to generate loss by simply shutting down the business.

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3 years ago
River Falls Manufacturing uses a normal cost system and had the following data available for 2018: Direct materials purchased on
PtichkaEL [24]

Answer:

The ending balance of work-in-process inventory is $64,000

Explanation:

Opening Raw Material = $34,000

Opening WIP Inventory = $70,000

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Raw materials requisitioned = $88,000

Closing Raw Material = Opening + Purchase - Requisitioned

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Thus remaining is work in process = $363,000 - $299,000 = $64,000

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5 0
3 years ago
Legislation requires that all non-salaried employees who work more than 40 hours a week be paid over-time for the week. This leg
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