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3 years ago

Explain how a Target price for farm crops is an example of a price floor.

1 answer:

8 0

Answer: A target price for farm crops is an example of price floor because it’s fixed ahead of harvests with the interest of farmers in mind.

Explanation: A quick definition of both concepts would be of help. A price floor is usually fixed by government legislation and it ensures that the price of a commodity or service does not fall below a certain minimum. In the case of farm crops, a floor price makes sure that the farmers are guaranteed a level of profit in case there is poor harvest for any reason whatsoever. The price floor must be fixed above the equilibrium price for this to be effective.

A target price is an expectation of the future price of commodities or services, and hence prices are fixed ahead of the harvest in the case of farm crops. This is so because as explained earlier, future conditions might change and become unfavorable, therefore making the current market price unprofitable for farmers. If for example, a sack of potatoes currently sells for $30, the government may fix the price floor ahead of the harvest season at $45 per sack. This implies that after harvesting farmers can still sell at $30. However if the harvest turns out to be bad perhaps due to natural disasters, pests or fungal attacks, etc, then the farmers can go ahead and sell at $45 and possibly higher. No farmer is allowed to sell below $45 (since that is the ‘floor’). That way, farmers would still have some profit guaranteed and would be encouraged to remain in the farming business.

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Variance analysis Jack Joe, Inc. standard costing provided below. During 20x1, Jack Joe Inc. used 410,000 of raw materials to pr

ICE Princess25 [194]

Answer:

1) Direct material price variance= -5,000 or $5,000 unfavorable

2) Direct material quantity variance= $5,000 unfavorable

3) Actual price= $0.5122

Explanation:

Giving the following information:

Units produced= 200,000

Units sold= 200,000

Direct material used= 410,000

Standard quantity= 2 units of raw material

Budgeted cost= $0.5 per raw material unit

Total Raw material variance= $10,000 unfavorable

First, we need to calculate the direct material quantity variance:

Direct material quantity variance= (standard quantity - actual quantity)*standard price

Direct material quantity variance= (400,000 - 410,000)*0.5

Direct material quantity variance= $5,000 unfavorable

Now, we can determine the direct material price variance:

Total direct material varaince= Direct material quantity variance + direct material price variance

10,000= -5,000 +

direct material price variance= -5,000 or $5,000 unfavorable

Finally, we can calculate the actual price per raw material unit:

Direct material price variance= (standard price - actual price)*actual quantity

-5,000= (0.5 - actual price)*410,000

-5,000= 205,000 - 410,000actual price

210,000/410,000= actual price

$0.5122=actual price

7 0

3 years ago

Selected accounts from the ledger of Garrison Company appear below. For each account, indicate the following:

joja [24]

Answer & Explanation:

Account Type of Account Increase side

Supplies Asset Debit

Retained Earnings Capital Credit

Fees Earned Revenue Credit

Accounts Payable Liability Credit

Salary Expense Debit

Common Stock Asset Debit

Account Receivable Asset Debit

Equipment Asset Debit

Notes Payable Liability Credit

8 0

3 years ago

Explain the following factors that influence the choice of funding: risk

konstantin123 [22]

Risk is the major factor to consider when deciding the funding, when funds are provided it is a risk that whether the funds will be received or not.

Risk is the threat of being unable to receive the funds back, this is the highest level of risk, there are many small risks too, but the highest level is losing the money.

There could be a small portion of loss of money or sometimes the debtor completely defaults so not a single penny is retrieved.

Funding is a choice and the debtor should be chose according to the risk appetite of the investor or lender on money.

There are investors who are risk averse are not willing to take the risk and fine with the less amount of returns and there are risk takers, who want high returns in return of high risk of defaulting.

Learn more about Risk at brainly.com/question/27331968#SPJ1

6 0

1 year ago

Tim's Tools just issued a dividend of $2.22 per share on its common stock. The company is expected to maintain a constant 2.8 pe

LekaFEV [45]

Answer:

expected return = 12.03%

Explanation:

using the dividends growth model we can calculate the required return

$\frac{divends}{return-growth} = Intrinsic \: Value$

2.22 x 1.03 = 2.2866

We must remember that the gordel model is used with next year dividends

2.2866(return - 0.023) = 19

2.2866/19 +0.023 = return

return = 12.03%

4 0

3 years ago

Which of the following does not influence parent-child relationship

NISA [10]

Answer:

Monetary Contribution

Explanation:

Parent-child relationship refers to the way the parents nurture the social, physiological, and psychological development of the children.

Monetary contribution implied that in order for parents to give love and care to the children, the children need to provide the parents with a certain amount of money in return.

The type of care and attention that parents give to their children tend to be voluntary. It's purely based on unconditional love and affection. This is why we don't consider monetary contribution as a factor that influence parent-child relationship.

6 0

3 years ago

Explain how a Target price for farm crops is an example of a price floor.​

Explain how a Target price for farm crops is an example of a price floor.