Answer: Because the United States imports televisions, <u>P2 (GREATER)</u> represents the world price before the technological advance, and<u> P1 (MINOR)</u> represents the world price after the technological advance.
Explanation: The United States has no comparative advantage over the other countries in the production of televisions, therefore it IMPORTS them. Therefore, the price of televisions in the United States under normal conditions is higher than the world price, and as the world price falls as a result of Japan's technological advance, the price in the United States also decreases.
Question Completion:
A building owned by Hopewell Company was recently valued at $850,000 by a real estate expert.
Answer:
Book Value and Fair Value
There is a difference between the book value and the fair value of an asset. The book value is based on the asset's historical cost. The fair value is the current market price of the asset. In reporting long-term assets, the acceptable basis is the historical cost or the cost of acquiring the asset. This cost is further reduced by annual depreciation charges. The fair value is not often the acceptable basis for reporting long-term assets unless the entity is no longer a going concern or the asset has suffered an impairment loss.
Explanation:
a) Data and Calculation:
Fair value by a real estate expert = $850,000
Book value (historical cost) = $550,000
Difference between fair value and book value = $300,000
Answer:
If we made the switch, our OH rate would be closest to: $30.40 per MH
Explanation:
Overhead Rate is used to allocate manufacturing overheads (indirect costs) to jobs and departments.
In our senario Overhead rate are used to allocate fixed manufacturing overheads to production of lenses for satellite cameras.
Overhead Rate = Budgeted Overheads / Budgeted Activity
= $760,000/ 25,000
= $30.40 per practical equipment machine hour
Answer:
Off-Peak daily rate changes
Explanation:
Off peak daily rate changes is strategically changing the price of product and services based on time factor, when number of customer turnaround is very less. The price are fixed lesser than that of price during normal of peak demand time so that customer are motivated to buy the product.
As given in question, early evening drinking time is not considered a healthy drinking practice, hence to induce customer to use drinking service at that time, slightly reduced prices are charged, business have defined it as happy hour .
Since this is time based pricing strategy it can be termed as Off peak daily rate changes.
Answer: $10,000
Explanation:
I know this question looks like a lot but it isn't. It is simply asking how much gain was made in the cash that was exchanged.
Now we see that the company acquired the building for $50,000 but acquired the mortgage on it of $40,000 and hence paid off the balance of $10,000 to Al.
So the gain was,
Cash in the amount transferred = (fair market value - mortgage)
= $50,000) - $40,000
= $10,000
$10,000 is the gain that Al should recognize as a result of this transaction.