Answer:
Option C. $0.11
Option D. $0.95
Explanation:
As we know that the Transfer Price is set at either selling price for an outside market or variable cost plus opportunity cost if the product sold is to internal market present within the organization (Inter group or inter division sales).
However, the division can still charge upper limit price to the division which is $1 market price of the product.
Upper limit = $1
As it is given that the selling of the additional units will be among divisions which means its inter division market. Hence the lower limit will be used here.
Lower Limit = Variable cost + opportunity cost
Here
Variable cost is $10 cents
And
Opportunity cost will be zero here as the division will be using its excess capacity to sell to the other division, so there is no opportunity cost.
So, by putting values, we have:
Lower Limit = $0.1 - $0 = $0.1
Upper limit = $1
Thus the transfer price set for each bell can be between $1 and $0.1. So the $0.11 and $0.95 falls between these range and both are correct options here.
A. The size of the factory is fixed.
We know there will always be costs of rent and etc when running a business so even in the short run there is fixed costs. The output is always variable depending on the number of workers. The number of workers is also not fixed, but the size of the factory is because you cant just get up and move your business over night, it costs money and is a lot of work.
Answer:
The linear demand function for Frog & Friends Shower curtains is q = -60p + 4,100
Explanation: $5 each ===> 3,800 curtains per month
$10 each ===> 3,500 curtains per month.
===> slope of the demand line is (3800-3500)/(5-10) = 300/-5 = -60
===> demand function is q = -60p + c for some constant c.
Let 3,800 = -60*5 + c.
=3800 = -300 + c
===> c = 4,100.
Therefore the linear demand function for frog & friends curtains is q = -60p + 4,100
Answer:
They are reported on a balance sheet.
They refer to cash received in advance of performing a service or product. They are a liability.
They are also called deferred revenues.
Explanation:
Unearned revenue is a term in which the transactions that are related to the receiving of money could be considered for the service or product to be provided or delivered. It is as a prepayment
Also it is a liability account that should be recorded at the balance sheet. It is also known as deferred revenues
Answer:
B)
Explanation:
Sue is not required to recognize gross income from the receipt of the funds, but she must reduce her cost basis in the land by $2000.-
