Answer:
True
Explanation:
The purpose of any business is to make profit, which is from the difference between revenues (price of product multiplied number of product sold) with the cost of goods sold (average total cost multiplied number of product sold).
In short, the profit = (price - average total cost) x number of product sold.
Normally the price must be above/ higher than cost, so that the firm can have profit. Sometime the price in the market go down, so the firm have have to adjust down its price also to maintain customer's purchases.
Once its price is down, but the firm's average total cost is still same as previous, the firm can not have profit as previously. The firm may bear this situation as long as its capital capacity allowed, but will not be too long.
Answer:
$3,564,400
Explanation:
Equivalent units of Production
Materials = 190,000 + 10,000 = 200,000
Conversion cost = 190,000 + 10,000 x 70% = 197,000
Cost per equivalent units
Materials = $3,152,000 / 200,000 =$15.76
Conversion Cost = $591,000 / 197,000 =$3.00
Total cost per unit = $18.76
Therefore,
the cost of the product that was completed and transferred to finished goods is $3,564,400 ( 190,000 x $18.76)
Answer:
Accounts Receivable 960 Sales Revenue 960
Explanation:
Under periodic inventory system <u>inventory account is not updated for each purchase and each sale.</u>
<u>At the end of the period,</u> the total in purchases account is added to the beginning balance of the inventory to compute cost of goods available for sale.
Hence, the only entries will be between Sales revenue and accounts receivable.
Dr. Accounts receivable...960
Cr. Sales Revenue.......................960
T<span>he equipment to plant, harvest, and transport grain used by the farmers in KS is powered by diesel fuel. Therefore, an increase in the price of the fuel will also increase the price of the bread. The main ingredients of the bread </span>are <span>coming from the farmers' harvest of grain. When the price of the fuel would increase, the farmers would be selling their grains at a higher price which would yield to a higher price of the bread.</span>
Answer:
The correct option is B. Lower the price because demand for the good is elastic.
Explanation:
Own price elasticity of a product can be described as the degree of the responsiveness of the quantity demanded of a product to its own price.
Own price elasticity of a product can be calculated as the percentage change in the quantity demanded of a product over the percentage change in the price of the product.
When the own price elasticity of a product is greater than 1, it implies that the demand for the good is elastic and that the percentage change in the quantity demanded is higher than the percentage change in its price. Therefore, the correct action for a firm to take if it wishes to raise its total revenue is to lower price.
When the own price elasticity of a product is less than 1, it implies that the demand for the good is inelastic and that the percentage change in the quantity demanded is lower than the percentage change in its price. Therefore, the correct action for a firm to take if it wishes to raise its total revenue is to increase price.
When the own price elasticity of a product is equal to 1, it implies that the demand for the good is unitary and that the percentage change in the quantity demanded is equal to the percentage change in its price. Therefore, the correct action for a firm to take if it wishes to raise its total revenue is to leave the price unchanged.
Since the own price elasticity of the product which the firm manufactures of 3.5 is greater than, it implies that based on the explanation above the correct option is B. Lower the price because demand for the good is elastic.
