Answer:
The answer to both a and b is in the explanation below
Explanation:
a) The increase in wage can either decrease or increase the hours worked. This is became an increase in wage has both substitution effect and income effect that work in different directions. Substitution effect An increase in wage increases the opportunity cost of leisure, thereby making the worker increase number of hours worked. Income effect The increase in wage also makers the worker richer, thereby making the worker decrease number of hours worked.
Since no information about worker's preferences is given, we do not Imow which effect will dominate the other effect and, therefore, we do not know what the net impact of the increase in wage will be.
b) The bonus will only have income effect. The bonus will make the workers richer, thereby making the worker decrease number of hours worked.
If in part a), the substitution effect and income effect are equal in magnitude, then there will be no change in the number of hours worked. The number of hours worked will remain the same at 2000 hours. Since the employer would be paying $5 extra on each hour worked, the cost to the employer of increase in wage would be $10,000 (=2000 x $5), which is the same as the bonus in part b).
Answer:
First year : Le 2100
Second year : Le 2800
Third year : Le 2800
Explanation:
Given the following :
Cost of equipment = 30,000
Useful years = 10
Salvage or scrap value = 2,000
depreciation account for the first 3 years in the life of the asset using the Straight line method :
Straight line Depreciation :
(Cost - salvage value) / useful years
First year: (April - December 1990)
April - December 1990 = 9 months
(30,000 - 2000) / 10 × 9/12
28000 / 10 × 0.75 = Le 2100
Second year:
(30,000 - 2000) / 10 × 12/12
28000/ 10 = Le 2800
Third year:
(30,000 - 2000) / 10 × 12/12
28000/ 10 = Le 2800
Answer:
C. The equilibrium interest rate will rise.
Explanation:
According to the question, When the economy made the transition from the short run equilibrium to the long run equilibrium than there is a rise in the supply that results in rise in the nominal wages but the real wage would remain unchanged or constant
Therefore the option c is correct and the rest of the options are wrong
Answer:
28,000 Units
Explanation:
The inventory that we actually have possession or the point at which the risk and reward associated with the inventory are shifted towards the company then it must recognize it. So this means, the inventory that is ordered and yet not received on board and hence must not be included in the inventory.
Closing Inventory = Opening Inventory + Inventory Received - Inventory Despatched
Here
Inventory Received is Zero Units
Inventory Despatched is 2,000 Units
Opening Inventory 30,000 Units
By putting the values, we have:
Closing Inventory = 30,000 Units + 0 Units - 2,000 Units
Closing Inventory = 28,000 Units
Answer:
Yes that is an appropriate way ti prepare an operating budget.
Explanation:
An operating budget is a financial statement that reflects reflects operating activities and its cost implications.
It outlines other budgets like ending fines the financial plan for each operating sub sector such as sales, production, direct labor, manufacturing overhear, etc. for a particular period.
Nathan's method of preparing the operating budget for his company is appropriate because he is following the correct sequence.
To prepare an operating budget, the sales and production budgets are captured first, followed by direct materials, direct labor, manufacturing overhead, direct labor, direct materials and other other additional budget before the budgeted income statement is prepared.
