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3 years ago

Consider each of the transactions below. All of the expenditures were made in cash.

Business

1 answer:

love history [14]3 years ago

8 0

Answer:

of the expenditures were made in cash.

a. The Edison Company spent $12,000 during the year for experimental purposes in connection with the development of a new product.

b. In April, the Marshall Company lost a patent infringement suit and paid the plaintiff $7,500.

c. In March, the Cleanway Laundromat bought equipment. Cleanway paid $6,000 down and signed a noninterest-bearing note requiring the payment of $18,000 in nine months. The cash price for this equipment was $23,000.

d. On June 1, the Jamsen Corporation installed a sprinkler system throughout the building at a cost of $28,000.

e. The Mayer Company, plaintiff, paid $12,000 in legal fees in November, in connection with a successful infringement suit on its patent.

f. The Johnson Company traded its old equipment for new equipment. The new

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g Firm X is a monopolist with marginal cost of $5/unit. When maximizing profit, Firm X charges a price of $24/unit. What elastic

Yanka [14]

Answer:

Firm X is facing low elasticity of demand at its current level of output.

Explanation:

This is why Firm X is able to set such a high price of $24/unit when its marginal cost is $5/unit. Usually, a monopolist does not want to set prices and outputs in the inelastic range of the demand curve. It is always interested in setting profit-maximizing prices and outputs. Firm X should be wary of setting too high prices because consumers can decide to lower their demand.

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3 years ago

The following information relates to next year's projected operating results of the Children's Division of Grunge Clothing Corpo

Fudgin [204]

Question:

The following information relates to next year's projected operating results of the Children's Division of Grunge Clothing Corporation:

Contribution margin.... 200,000

Fixed Expense.... 500,000

net operating loss..... (300,000)

If Children's Division is dropped, half of the fixed costs above can be eliminated. What will be the effect on Grunge's profit next year if Children's Division is dropped instead of being kept?

A) 50,000 increase

B) 250,000 increase

C)250,000 decrease

D) 550,000 increase

Answer:

Option A is correct

Increase in profit = $50,000

Explanation:

To determine whether or not it will be profitable to drop a loss making division, we compare the savings in fixed cost to the lost contribution from the division.

It is noteworthy that only the fixed cost attributed to division can only be saved should the division be shut down.

The analysis is done as follows:

Lost contribution (200,000 )

Savings in fixed cost (1/2× 500,000) <u> 250,000 </u>

Net savings <u> 50,000</u>

Increase in profit = $50,000

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3 years ago

Cheryl is taking classes at an institution that offers face-to-face time with her instructor and classmates and also online time

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The answer is B. Blended Learning. Blended learning combines traditional classroom education with the ability to learn from and utilize an online platform.

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4 years ago

Given the following linear demand forecast: Demand = 50 + 10 X (where X is the desired forecast period), what is the predicted f

Irina18 [472]

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3 years ago

A cost incurred in the past that is not relevant to any current decision is classified as a(n): incremental cost. opportunity co

melamori03 [73]

Answer:

sunk cost.

Explanation:

Sunk cost can be defined as a cost or an amount of money that has been spent on something in the past and as such cannot be recovered. Thus, because a sunk cost has been incurred by an individual or organization it can't be recovered and as such it is irrelevant in the decision-making process such as investments, projects etc.

Basically, sunk costs are referred to as fixed costs.

Sunk costs are the opposite of relevant costs because they can't be changed or recovered, as they've been spent or contracted in the past already. Hence, relevant cost are relevant for decision-making purposes but not sunk costs.

Hence, a cost incurred in the past that is not relevant to any current decision is classified as a sunk cost.

For example, ABC investors decide to acquire land and develop residential houses at a location X. This decision is informed on the fact that the government had recently enacted a policy that led to an increase in demand for residential properties in that location. 6 months into construction of the residential houses, the government reviews and rescinds the policy. This leads to a sharp decline in property values in location X. ABC investors had already incurred 10 million dollars in the project. The 10 million dollars is considered sunk cost.

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3 years ago