Answer:
either the selling price decreases or the total output decreases
Explanation:
The firm's income statement:
total sales revenue = $120,000
minus total variable costs = ($72,000)
<u>minus total fixed costs = ($15,000) </u>
net profit = $33,000
The long run equilibrium for a monopolistically competitive firm occurs when the firm is making no economic profit since it is charging a price = average total cost.
In this case the average total cost per unit = $6 per unit + ($15,000 / 12,000 units) = $7.25 per unit
Since the firm is currently charging a higher selling price than average total cost ($10 > $7.25), one or two things might happen in the long run:
- selling price will decrease
- output will decrease
Using straight-line depreciation.
Changing to FIFO
Using the weighted average method for capitalizing interest during times of reduced interest rates, rather than the specific method.
Changing to the successful efforts method of accounting for natural resource exploration costs.
Changing to the successful efforts method of accounting for natural resource exploration costs.
<u>Explanation:</u>
The particular technique initially underwrites the enthusiasm on explicit obligation. With financing costs on the decay, enthusiasm on lower rate obligation is promoted and more is expensed, comparative with the weighted normal technique, which underwrites at the normal rate over all obligation.
The weighted normal strategy would underwrite more enthusiasm on more established (higher loan cost) obligation, in this way diminishing the present measure of premium cost and expanding income. Expanding profit lessens the danger of rebelliousness for this firm.
Answer:
It cost $915,166.69
Explanation:
R=75,000
i=j/m, j=0.0525, m=1 - annually
i=0.0525
n=mt
n=20
An=R[1-(1+i)^-n] : i
An=(75,000x[1-(1+0.0525)^-20]) : 0.0525
An=$ 915,166.69
Answer:
A. slopes upward for normal goods and downward for inferior goods.
Explanation:
In the case of Engle curve it plots the relationship between income and demand for a good.
In the case of the normal goods, as the income rises the demand also rises while on the other hand in the case of inferior goods, the income rises the demand false
So it sloped upward for the normal goods and slop downwards for the inferior goods
Answer: $678,220
Explanation:
Given that,
Purchase Discounts = $ 11,000
Freight-in = $15,300
Purchases = $689,020
Beginning Inventory = $55,000
Ending Inventory = $45,600
Purchase Returns and Allowances = $15,100
Cost of goods purchased:
= Purchases + Freight in - Purchase discounts - Purchase returns and allowances
= $689,020 + $15,300 - $ 11,000 - $15,100
= $678,220
