Answer:
16.67
normal
Explanation:
Income Elasticity of Demand = 
% change in movie downloads = (4 - 2) / 2
% change in movie downloads = 2 / 2
% change in movie downloads = 1
or
% Change in quantity demanded = 100%
% change in income = ($82,000 - $77,000) / $77,000
% change in income = $5,000 / $77,000
% change in income = 0.06
or
% change in income = 6%
Income Elasticity of Demand = 100% / 6%
Income Elasticity of Demand = 16.67
When the Income Elasticity of Demand is positive, it is usually Normal Goods. As Income goes up, similarly the movie downloads or quantity demanded going up. So, this is a normal good.
Answer:
See the journal entries below.
Lease receivable = $235,757.58
Explanation:
Before the journal entries are prepared, the present value of the annual rentals or lease receivable is first calculated using the formula for calculating the present value of an ordinary annuity due since the annual rentals is payable each December 31, beginning December 31, 2019 as follows:
PV = P * ((1 - (1 / (1 + r))^n) / r) * (1 + r) …………………………………. (1)
Where;
PV = Present value annual rentals or lease receivable = ?
P = Annual rentals = $52,800
r = Interest rate = 6%, or 0.06
n = number of years the lease agreement covered = 5
Substitute the values into equation (1), we have:
PV = $52,800 * ((1 - (1 / (1 + 0.06))^5) / 0.06) * (1 + 0.06)
PV = $235,757.58
The journal entries will now look as follows:
<u>Date Account Tittle Debit ($) Credit ($) </u>
31-Dec-19 Lease Receivable 235,757.58
Cost of Goods Sold 156,000.00
Sales Revenue 235,757.58
Inventory 156,000.00
<u><em> (To record the lease.) </em></u>
31-Dec-19 Cash 52,800.00
Lease Receivable 52,800.00
<em><u> (To record the receipt of lease payment.) </u></em>
We are given
fixed cost, F = $6,660,000
sales mix:
65% sporting goods
35% sports gear
margin ratio:
30% sporting goods
50% sports gear
Now, we solve for the break even point in dollars. We use the formula
x = total fixed cost / [ price - total variable cost/price ]
Using the given values
x = 6660000 / [0.65(0.3)(6660000) + .35(0.5)(660000)]/ [(0.3)(6660000) + (0.5)(660000)]
x = $14,400,000
The breakeven point is $14,400,000
This is the sales when the revenue is just equal to the total cost of producing the products resulting to zero profit.
If you need to indicate the missing ammount of each letter in the grahp then it will be like follows:
For the first case:
A = $9,600 + $5,000 + $8,000 = $22,600$22,600 + $1,000 – B = $17,000
B = $22,600 + $1,000 – $17,000 = $6,600$17,000 + C = $20,000
C = $20,000 – $17,000 = $3,000
D = $20,000 – $3,400 = $16,600
<span>E = ($24,500 – $2,500) – $16,600 = $5,400
</span><span>F = $5,400 – $2,500 = $2,900
</span>And now for the second case:
G + $8,000 + $4,000 = $16,000
G = $16,000 – $8,000 – $4,000 = $4,000$16,000 + H – $3,000 = $22,000
H = $22,000 + $3,000 – $16,000 = $9,000(I – $1,400) – K = $7,000(I – $1,400) – $22,800 = $7,000
<span>I = $1,400 + $22,800 + $7,000 = $31,200
</span>J = $22,000 + $3,300 = $25,300
K = $25,300 – $2,500 = $22,800$7,000 – L = $5,000
<span>L = $2,000</span>
Answer:
Explanation:
a) Data and Calculations:
Decrease in the price of penguin patties = 5%
Quantity of frizzles sold increase by 4%
Quantity of mookies sold decrease by 5%
Cross-price elasticity of frizzles relative to penguin patties = 4%/-5% = -0.8
Cross-price elasticity of mookies relative to penguin patties = -5%/-5% = 1
Relative to Frizzles Cross-Price Complement Recommend
and Mookie's Elasticity of Demand or Substitute Marketing
Frizzles -0.8 (4%/-5%) Complement with patties
Mookie's 1 (-5%/-5%) Substitute without patties
b) The cross-price elasticity measurements for penguin patties and frizzles and Mookie’s are calculated by taking the percentage changes in the quantity demanded of frizzles and Mookie’s and dividing them by the percentage change in the price of the penguin patties. Complementary goods have a negative cross- price elasticity because as the price of penguin patties decreases by 5%, the demand for the frizzles increases by 4%. Substitute goods have a positive cross-price elasticity because as the price of penguin patties decreases by 5%, the demand for the other good decreases by 5%.
