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2 years ago

The fixed costs of doing business include

Business

1 answer:

11Alexandr11 [23.1K]2 years ago

8 0

Answer:

Fixed costs are the costs associated with your business's products or services that must be paid regardless of the volume you sell. ... Insurance - the liability insurance you hold on your business. Rent - the rent you pay on your office, factory, and storage space. Utilities - electricity, water, and other utilities.

Explanation:

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On December 31, 2020, Marin Company borrowed $67,653 from Paris Bank, signing a 5-year, $114,000 zero-interest-bearing note. The

igor_vitrenko [27]

Answer:

Journal Entries

December 31, 2020

Dr. Note Receivables $114,000

Cr. Discount on bond $46,347

Cr. Cash $67,653

December 31, 2020

Dr. Impairment loss $20,839

Cr. Allowance for Impairment $20,839

Explanation:

Calculate the discount on the bond as follow

Discount on the bond = Face value of Note - Borrowed Amount = $114,000 - $67,653 = $46,347

On December 31, 2020 calculate the present value of face value of note and recoverable value

Present value of Note = Face value x Discount factor at 11% for 3 years = $114,000 x 1/( 1 + 11%)^3 = $83,355.82

Present value of recoverable value of note = Recoverable value of note x Discount factor at 11% for 3 years = $85,500 x 1/( 1 + 11%)^3 = $62,516.86

Now calculate the impairment loss as follow

Impairment loss = Present value of Note - Present value of recoverable value of note = $83,355.82 - $62,516.86 = $20,838.96 = $20,839

8 0

3 years ago

You are the manager of a firm that competes against four other firms by bidding for government contracts. While you believe your

hodyreva [135]

Answer: $1,000

Explanation:

Given Data;

Total government demand is Q = 800 -10P

marginal cost (Mc) = $50

contracted price (cp) = $70 per unit

Therefore;

Marginal Revenue ( MR ) = Marginal Cost ( MC)

Q = 800 -10P

800 - Q = 10P

Divide through by 10, where Q = 1

800/10 - 1/10 = P

80 - 0.1Q = P

Total Revenue(TR) = PQ

TR = 80 - 0.1Q

MR = MC

where MC = $50

80 - 0.1Q = 50

Collecting like terms

80 - 50 = 0.1Q

30 = 0.1 Q

Divide both side by 0.1

Q = 300

Price would be

P = 80 - 0.1Q

P = 80 - 0.1(300)

P = $50

MC = 40

Producing Q units

Total Cost (TC ) = 40 * ( 300 )

= $12,000

Total profit

= TR - TC

= ( P * Q ) - $12,000

= ( $50 * 300 ) - $12,000

= $15,000 - $12,000

= $3,000

Changes caused by regulations

Contracted price = $70

Quantity = 100Units

TT’ = ( P * Q ) - TC

= ( 70 * 100 ) - ( 50 * 100 )

= $7,000 - $5,000

= $2,000

TT - TT’ = $ ( 3000 - 2000 )

= $1,000

If legislation is passed all profit would reduce by $1,000

3 0

3 years ago

On January 1, Brad Inc. sold $30,000 in products to a customer on account. Then on January 10, Brad collected the cash on that a

ozzi

Answer:

No net effect on the accounting equation.

Explanation:

Given that,

On January 1, Products sold to a customer on account = $30,000

On January 10, Cash collected from a customer = $30,000

Accounting equation is as follows:

Assets = Liabilities + Stockholder's equity

On January 10,

The cash of $30,000 is received from the customer which increases the assets by $30,000 and reduces the accounts receivable by $30,000 which is also a part of assets. Therefore, there is no change or impact on the accounting equation.

3 0

3 years ago

] Widget manufacturing Company began operations on January 1. All sales are on credit. Widget has sales budgeted as $160,000 for

NemiM [27]

Answer: $222000

Explanation:

The dollar value of February Expected cash collections from customers will be calculated as the addition of the January credit sales collection and the February credit sales collection and this will be:

= ($160,000 × 30%) + ($290000 × 60%)

= $48000 + $174000

= $222000

The value of February expected cash collections from customers is $222,000.

4 0

2 years ago

Bob Knox is paid on a piece-rate basis. He is paid 30 cents for each unit he produces. For overtime work, he receives in additio

Tresset [83]

Answer:

Bob Knox will be paid $598.5 for 45 hours worked.

Carson Morris will be paid gross pay $903.1 for 50 hours worked.

Explanation:

Bob Knox is paid on piece-rate basis, which means he will be paid based on the units he produced. To calculate his pay

1,890 units × $0.3 = $567

$567 ÷ 45 hours worked = $12.6 per hour

To calculate his overtime pay we multiply by 0.5 because he is paid one half of regular pay as overtime.

$12.6 per hour × 0.5 = $6.3 per hour

$6.3 per hour × 5 hours overtime = $31.5

$31.5 + $567 = $598.5.

Carson Morris is paid average rate basis for overtime. His pay will be calculated as follows,

( 36 hours × $16.00 per hour) + (14 hours × $17.50 per hour ) = $821 for (36 + 14) 50 hours.

$821 ÷ 50 hours = $16.42 per hour

$16.42 × 0.5 = $8.21 per hour

$8.21 per hour × 10 hours overtime = $82.10

=$82.1 + $821 = $903.1

3 0

3 years ago