Total revenue minus the total explicit and total implicit costs of production is economic profit.
Economic profit is accounting profit less implicit or opportunity costs. It is also total revenue less explicit and implicit cost.
Explicit cost is the amount used in running a business. Examples are rent and wages.
Implicit cost is the cost of the next best option that is let gone off when one option is chosen over other options. For example, a baker leaves his job to start his own business. His implicit cost is the wages he earned as a baker.
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Answer:
Total Cost of the jobs: 434,500
Explanation:
DM 120,000
DL 144,500
MO applied 158,000
adjustment for MO to COGS 12,000
(because is a job order costing, in most cases the actual manufacturing overhead is know after the job is done)
<u>Notice</u> the <em>indirect mateirals represent MO </em>so it will be as part of that concept.
Total cost:
120,000+ 144,500 + 158,000 + 12,000 = 434,500
Answer:
Vaughn should produce Plain as it makes greater profit.
Explanation:
Vaughn Manufacturing can sell all the units it can produce of either Plain or Fancy but not both.
Plain has a unit contribution margin of $86 and takes two machine hours to make and Fancy has a unit contribution margin of $111 and takes three machine hours to make.
There are 2400 machine hours available to manufacture a product.
Profit per machine hour for Plain
=
= $43
Profit per machine hour for Fancy
=
= $37
The difference in profit
= $43 - $37
= $6
Plain makes $6 more profit per machine hour than Fancy.
Answer:
The correct answer is letter "A": Fired the employee because of claims of harrasment.
Explanation:
In case an employee has committed a fault and could be found liable for the actions incurred, usually the company that worker belongs to fires the employee. Firms take that decision to avoid any negative image towards the organization that could be reflected in a decrease in sales. However, firms must also be aware of what could be their liability if the employee is found guilty because there is a possibility the firm did not supervise that worker effectively and that is why the fault could take place.
Answer:
France should specialize in producing phones and import computers from Sweden
Explanation:
France can produce: 4 phones or 3 computers
The opportunity cost of producing 1 phone = (3 ÷ 4)
= 0.75 computers
The opportunity cost of producing 1 computer = (4 ÷ 3)
= 1.33 phones
Sweden can produce: 1 phone or 2 computers
The opportunity cost of producing 1 phone = (2 ÷ 1)
= 2 computers
The opportunity cost of producing 1 computer = (1 ÷ 2)
= 0.5 phones
According to the comparative advantage,
Sweden has a comparative advantage in producing computers because the opportunity cost of producing computers is lower for Sweden than for France.
France has a comparative advantage in producing phones because the opportunity cost of producing phones is lower for France than for Sweden and import computers from Sweden because Sweden has a comparative advantage in producing computers.