The choice of country a to purchase wheat from country b is supported by Ricardo's theory of comparative advantage, which is the theory of international commerce.
<h3>What is the trade theory of Ricardo?</h3>
Three premises underlie the Ricardian theory of international trade: labor productivities are fixed, there is no cross-border movement of the production factors, and labor is the only production factor. Only the first of these presumptions is acknowledged by Ricardo himself.
According to Ricardo's well-known theory of comparative advantage, countries can gain a competitive advantage in international trade by focusing on producing goods with the lowest opportunity costs compared to those of other countries.
<h3>What can we infer about the advantages of free trade from Ricardo's theory of comparative advantage?</h3>
The foundation of international trade is comparative advantage, which also serves as the basis for the positive economic effects of free trade on nations. According to the comparative advantage concept, trade can still be advantageous to both trading partners even when one country has a clear advantage in producing goods.
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Answer:
<u>Cullumber Co.</u>
<u>Comprehensive income statement for the month ended January 2022.</u>
$
Sales revenue 400,000
Less Sales returns and allowances (17,000)
Net Sales 383,100
Less Cost of goods sold (201,500)
Gross Profit 181,500
Less Expenses
Rent expense 33,900
Sales discounts 10,000
Freight-out 6,300
Insurance expense 13,400
Salaries and wages expense 61,200
Income tax expense 5,300 (130,100)
Profit for the Year 51,400
Other comprehensive income 2,000
Total Comprehensive income 53,400
Explanation:
The Comprehensive income statement for the month ended January 2022 has been prepared above.
Answer:
Renaissance Gallery
The ending work in process inventory balance and the total cost assigned to finished jobs:
F. None of the above
Explanation:
a) Data and Calculations:
Overhead application rate = 130%
Beginning work in process
(Price Wedding Photo) = $15,500
Direct labor costs incurred on
all jobs during June 70,100
Direct materials costs in June 12,700
Total cost incurred to date = $98,300
Ending work in process:
Direct labor $14,000
Direct materials 4,400 $18,400
Cost assigned to finished $79,900
jobs
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