Answer:
The annual capacity is 85000 units. If order is accepted of 12000 units the company will be able to sell only 73000 units (instead of 78000).
Explanation:
Current Net Income calculation and New Net Income calculation are atteched in the archive.
- Increase in income = new income – old income = 370000 – 340000 = $30000
- Marston’s Net Income will INCREASE by $30,000 if it accepts the special order.
- The above increase can be also understood as---
Contribution gain on special order – 12000 units x ($105-$90) = $180,000
(-) Contribution lost of normal sale – (78000 units – 73000 units) x ($120-$90) = $150000
Net INCREASE = 180000 – 150000 = $30,000
Answer:
Explanation:
Before trade price is 1.75 and quantity is 125 million tons
After free trade, world price becomes domestic price so it is $1 per ton
At this price quantity supplied is 50 million tons and quantity demanded is 200 million tons
Amount of imported coal is the difference between QD and QS which is 200 - 50 = 150 million tons
Till 50 million tons, domestic supppliers supply. From 50 to 100 million tons, the foreign producers supply and after 100 million tons, domestic supply shifts so the new domestic price after quota is 1.50 per ton
At this price total supply is 150 million tons and total demand is also 150 tons. Domestic supply is 100 million tons and domestic demand is 150 million tons
New amount of imports are 50 million restricted by quota
Revenue to government is quota rents and it is (1.50 - 1.00)*50 million = 25 million. Revenue to producers is 0.5*(1.50 - 0.50)*100 million = $50 million
Answer:
C) performance of the contract is commercially impracticable.
Explanation:
Contract law contemplates certain situations where performing the contract is either difficult or impossible and therefore the party is not liable for breaching the contract.
Commercial impracticability applies to contracts where the performance of at least one party is impracticable and cannot be accomplished.
In this case, Quinn cannot perform his duty since the price of scrap steel increased beyond any reasonable price contemplated in the contract. Since Quinn is not responsible for setting the price of scrap steel, he is not liable for breaching the contract.
Answer:
Option A is correct one.
<u>Wes has a loss of $25,000 suspended under the passive loss rules.</u>
Explanation:
Wes has no passive income. The measure of inactive misfortunes restricted by in danger impediment rules (which would be $25,000) must be set-off just against the easy revenue. As Wes has not earned any easy revenue during the year, the whole measure of $25,000 (as restricted by in danger confinement rules) will get suspended under the latent misfortune rules. Before applying latent movement rules, it is important to apply in risk limitation rules.