Answer: The company must rebuild the units.
Explanation: We must compare the benefits obtained by selling the defective units with the benefits obtained by selling the reconstructed units.
If we sell the defective units: 600 units × $2 =<u> $1200
</u>
Versus
If we sell the rebuilt units:<u> 600 units x ($5 - $0.60 [Materials] - $1 [Labor] - $0.80 [Overhead]) =</u>
<u>= 600 x ($2,60) = $1560.</u>
<u>Then it is convenient to rebuild the defective units to obtain a greater benefit.</u>
<u></u>
Answer:
Dr Accounts Payable 9200 Cr Cash 9016 Cr Inventory 184
Explanation:
The payment terms of 2/10, n/45 mean that if paid within 10 days the company is entitled to a 2% discount. Otherwise full payment is required within 45 days.
Since we're settling the account within 10 days ( 7 days after purchase ) we are entitled to a 2% discount.
Originally the inventory was recorded at 9200 Dr and a Cr to Accounts payable of 9200.
The day the invetory is paid we will record the following (August 10)
Dr Accounts Payable $9200
Cr Cash/Bank $9016
Cr Inventory $184
Since we're using the perpetual inventory system the actual cost of inventory is 9016 and not 9200. Thus inventory is now recorded at 9016. The cast amount is the actual amount used to settle the account after the 2% discount was applied.
Answer:
Bellisima's opportunity cost:
Production of rye per million hours of labor = 24 / 12 = 2 pairs of jeans
Production of jeans per million hours of labor = 12 / 24 = 0.5 bushels of rye
Dolorium's opportunity cost:
Production of rye per million hours of labor = 32 / 8 = 4 pairs of jeans
Production of jeans per million hours of labor = 8 / 32 = 0.25 bushels of rye
Dolorium has a comparative advantage in the production of jeans while Bellisima has a comparative advantage in the production of rye.
If both countries specialize:
Bellisima will produce 48 million bushels of rye.
Dolorium will produce 128 million pairs of jeans.
Total production of rye has increased by 12 million bushels.
Total production of jeans has increased by 24 million pairs.
Answer:
Borrowing on a long-term is better.
Explanation:
During recession, sales and revenue declines due to the decrease in consumers' spending and low economic activity, profit and cash flow drops, interest rates are low and unemployment rises.
Borrowing on a long-term is better during recession better recession is not static. According to the phases of business cycle, after recession (contraction), we have trough, then expansion and peak period. And this business cycle vary from more than one year to 10 or 12 years.
Long-term loan also varies from more than one year to 15 years or more. So by the time the economy recovers from recession, paying interest on the debt will not be a problem.
Short-term loan is usually within a year. Going for this is discouraged because during recession, sales decrease, cash flow drops. So paying interest and the principal on this loan will be extremely difficult, thereby, exposing the company to liquidation. The company becomes a going concern.
Answer:
<u><em>Equations for the total cost C</em></u>
Total cost is the sum of total fixed cost and total variable cost incurred on the production of units sold. If c represents total cost and x represents units sold, then
C = $11.20x + $21,000
(where $11.20 is variable cost per unit)
<u><em>Equations for the total revenue R</em></u>
Total revenue is the product of number of units sold and sale price per unit. If R represents total revenue and x represents units sold, then
R = $18.70x