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Kazeer [188]
3 years ago
8

Costs of production that affect people who have no control over how much of a good is produced

Business
1 answer:
katovenus [111]3 years ago
5 0
SPILLOVER COSTS are costs of production that affect people who have no control over how much of a good is produced. 

Spillover cost is also known as "negative externalities". This happens when costs of production are not fully reflected on market demand or supply schedules that may result to a loss or damage on a third party involved in a market transaction.
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Explanation:

The adjustment required is to record $800 of supplies used as an expense, hence, by carrying out the adjustment, net income is overstated by $800 so also retained earnings and shareholders' equity.

In other words,the balance that would be left in supplies is opening balance of $200 plus purchase of supplies which is $950 minus the supplies used.

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Answer:

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