Answer:
$22
Explanation:
JL Groomers will maximize its accounting profit while taking to 0 its economic profits when the marginal revenue = marginal costs.
Economic profits are not the same as accounting profits, since they include the opportunity costs of investing the money somewhere else. That is why in the long run firms are not able to make economic profits since as long as they exist, new competitors will enter the market. But on the short run, firms are able to make economic profit, but by doing so, they will not be maximizing their accounting profit.
Economic profit = accounting profit - opportunity costs
Opportunity costs are the extra costs associated or benefits lost from choosing one activity or investment over another one.
Answer:
higher than net income computed under variable costing when units produced are greater than units sold
Explanation:
Absorption costing and variable costing techniques are used to compute the accounting cost of various operation. The calculation procedures of both the techniques are different; that is why the results are different. The net income under absorption costing is higher because it takes into account the indirect expenses and indirect costs. Likewise, absorption costing technique also includes manufacturing or overhead cost.
Answer:
$13,400
Explanation:
The movement in cash balance over a period is as a result of receipts and disbursements over the period. This may be expressed mathematically as
Opening balance + receipts - disbursements = closing balance
If the company wants to maintain a desired closing balance, the amount to be borrowed would form part of the receipts
$19,200 + receipts - $190,400 = $31,200
Receipts = $190,400 + $31,200 - $19,200
= $202,400
Given Budgeted cash receipts total $189,000 then amount to be borrowed
= $202,400 - $189,000
= $13,400
Answer:
$86 million
Explanation:
The computation of the net cash flows from operating activities using the indirect method is shown below:
Cash flows from operating activities
Net income $81 million
Add: depreciation expense $9 million
Less: Gain on sale of equipment -$1 million
Less: Increase in account receivable -$3 million
Less: Increase in inventory -$3 million
Add: Increase in account payable $3 million
Net cash flows from operating activities $86 million
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