Answer 5,000 is the maximum dividend that can be paid to shareholders.
Explanation:
Answer:
b. greater under absorption costing than variable costing.
Explanation:
The question is to calculate the closing value of inventory and based on the choices, we need to calculate based on both the Absorption Costing and the Variable Costing Methods.
1. Closing Inventory based on Variable Costing Method
Direct Material $40
Direct Labour $30
Variable Overhead $2
Fixed Overhead <u>$0 </u>(this method does not reecognise fixed cost
Totals (Unit cost of Production) $72
Based on this, the closing inventory is $72 x (8,000+50,000-55,000 units)
=$77 x 3,000= $216,000
2. Closing Inventory based on Absorption Costing Method
Direct Material $40
Direct Labour $30
Variable Overhead $2
Fixed Overhead <u>$5</u>
Totals (Unit cost of Production) $77
Based on this, the closing inventory is $77 x (8,000+50,000-55,000 units)
=$77 x 3,000= $231,000
Based on these calculations:
The Ending Inventory is higher/Greater under absorption costing than variable costing and the reason is that variable costing does not recognize fixed cost in determining the value of ending inventory.
Answer:
C. $2000 tax refund
Explanation:
Given that
Tax liability = 9000
Tax credits = 3000
Tax withheld = 8000
Maddison tax return = Gross tax liability - tax credits - tax withheld
Therefore
Tax return = 9000 - 3000 - 6000
= -2000.
This indicates a tax refund of $2,000
Answer:
The correct answer is letter "B": For both the millionaire and the pauper, the marginal utility they derive from the one-thousandth dollar is less than the marginal utility they derive from the five-hundredth dollar.
Explanation:
Utility is referred to as the degree of satisfaction perceived by individuals while consuming a product or service. Marginal utility reflects the aggregate utility of consuming one more sample of a product. Interpersonal utility comparisons are made to measure how much utility represents the satisfaction of a need for one individual and another.
In such scenario,<em> the marginal utility of spending $5,000 will be higher than spending $1,000 for both the rich and the poor because one amount itself is greater than the other which implies more goods and services can be acquired (mostly on the poor's side) or invested (mostly on the rich's side).</em>
