Answer:
$40,000
Explanation:
The computation of the controllable margin is shown below:
= Contribution margin - Controllable fixed costs
= $120,000 - $80,000
= $40,000
If we deduct the controllable fixed costs from the contribution margin then the controllable margin can be computed which shows an accurate amount.
All other information which is given is not relevant. Hence, ignored it
Answer:
b. AgCo will sell no bushels of corn.
Explanation:
A perfectly competitive market refers to market has many buyers and sellers will all the market selling the undifferentiated product without any difference.
Some of the others attributes of a perfectly competitive market are that buyers and sellers have perfect information about the price of a good, no barriers to entry and exit, similar products are being sold, there are free entry and exit to the market, and all sellers are price takers.
All sellers are price takers implies that the price of good is determined or given by the market. Therefore, any attempt to increase the price beyond the price given by the market will result into a zero sale because the buyers will immediately switch to another seller selling at the market price which lower.
Based on the above explanation, AgCo will sell no bushels of corn because its prices at $4.10 per bushel for its corn is higher than the current market price for a bushel of corn of $4.00.
Answer:
a)Received cash for services performed.
+ Assets (cash)
+ revenues (fees earned)
This has impact on stockholders equity as the revenues increase the earnings of the business. The company receives an asset (cash increasease of their services, that asset received is what icnrease the value of the company)
b)Paid cash to purchase equipment.
+ Assets (equipment)
- Assets (cash)
This transaction doesn't involve Equity It is just a change in the Assets compositions. It has no impact on the income neither.
Explanation:
Answer: Comparability
Explanation:
Comparability describes information that is measured and reported in a similar manner for different companies. It helps users understand the real similarities and differences in economic activities between companies.
Answer:
a. Accounting profit for the business = $3,500
b. Economic loss = $1,000
c. The two friends can open the business and incur economic loss of $1,000 in the first year of operation. In subsequent years, the revenue may increase to generate better economic profit. This is the labor, risk, and reward of entrepreneurship.
d. If the two friends do not go ahead with the business because of the economic loss they suffer in the first year of operation, then they cannot be regarded as entrepreneurs. They are merely laborers who cannot assume any risk for greater rewards tomorrow.
Explanation:
Cost of business per month:
Operating expenses = $4,000
Lease of building = 2,000
Total expenses = $6,000
Revenue = $10,000
Accounting profit $4,000
Economic profit:
Revenue = $10,000
Total expenses = $6,000
Opportunity costs:
Lost salaries 4,500
Lost Interest 500
Total costs $11,000
Economic loss = $1,000
