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Ad libitum [116K]
3 years ago
15

Q2. Why can the distinction between fixed costs and variable costs be made in the short run? Classify the following as fixed or

variable costs: advertising expenditures, fuel, interest on company-issued bonds, shipping charges, payments for raw materials, real estate taxes, executive salaries, insurance premiums, wage payments, sales taxes, and rental payments on leas
Business
1 answer:
Lyrx [107]3 years ago
3 0

Answer:

Variable costs vary with the volume of production and can be changed in the short run.

Fixed costs do not vary with the volume of production and cannot be changed in the short run. Only in the long run can they be changed.

Variable costs:

  • Advertising expenditures
  • Fuel
  • Shipping charges
  • Payments for raw materials
  • Wage payments
  • Sales taxes

Fixed costs:

  • Interest on company issued bonds
  • Real estate taxes
  • Executive salaries
  • Insurance premiums
  • Rental payments on leased office machinery.
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Cleveland Corporation acquired a machine for $42,000 and has recorded depreciation for two years using the straight line method
dsp73

Answer:

The book value of the machine at the end of year 2 is $35,000

Explanation:

Straight line method depreciates the asset on its useful life after deducting salvage value from the cost of the asset.

Depreciation per year = ( Cost of Machine - Residual Value ) / Useful life

Depreciation per year = ( $42,000 - $7,000 ) / 10 years

Depreciation per year = $3,500 per year

Book value of machine at the end of year 2 = $42,000 - ( $3,500 x 2 )

Book value of machine at the end of year 2 = $42,000 - $7,000

Book value of machine at the end of year 2 = $35,000

7 0
3 years ago
Select best example below illustrative of transaction costs.a. All of the above b. The costs of various dinners during which a c
vaieri [72.5K]

Answer:

The correct option is A

Explanation:

Transaction costs are the whole array of costs associated with selling, buying, transferring goods etc.

Transaction costs can be of different types which are:

  • search costs
  • monitoring costs
  • Bargaining costs
  • transfer costs etc.
4 0
3 years ago
The Gap, Inc. has targeted teenagers and young adults in need of casual clothes, and through its GapKids stores, the parents or
Nataliya [291]

Answer:

The correct option is A, market segmentation

Explanation:

Market segmentation is the process of dividing customer base into distinct groups based on age,income,level of education,personality,perception and so on.

The purpose of segmenting the markets  is for the organization to satisfy the needs of these different groups based on their unique characteristics and to able to sell to them goods that  best match their status.

The scenario here is that Gap Inc,has successfully been able to discover the right set of people that its casuals best match.

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3 years ago
What are some advantages of students being exposed to computer software? (as it relates to Accounting)
ivann1987 [24]

Answer:

There are many advantages in students being exposed to accounting softwares.

-There productivity increases as they can engage in more work in less time

-The accuracy of the accounting process increases as well, mainly lyrics because there is no room for human errors

-the process becomes easier and less time consuming, this makes accounting less complicated and more attractive as a subject for the students

Explanation:

5 0
3 years ago
Read 2 more answers
Stock Z is trading at $50 today. In one year, the value will go either up to $62.50 or down to $40. A call option on Z with exac
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Answer:

0.33

Explanation:

Delta = (Cu – Cd)/(Su – Sd)Cu

= 62.50 – 55 = 7.50

Cd = 0

Delta = (7.50 – 0)/(62.50 – 40)

= 0.33

5 0
3 years ago
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