Classify each type of income as earned or unearned: gifts

Ginny and Eric are partners at an architecture firm. They are trying to determine which of them has a comparative advantage in b

blondinia [14]

Answer: (i) $20 per model

(ii) $27 per model

(iii) Ginny has a comparative advantage in building models.

Explanation:

A country or a firm has a comparative advantage in producing a commodity if the opportunity cost of producing that commodity in terms of other commodities is lower than the other country or firm.

Opportunity cost is the benefit that is foregone for an individual by choosing one alternative over other alternatives available to him.

If the opportunity cost is lower for an individual then this will benefit him whereas if the opportunity cost is higher then this will not benefit the individuals.

Therefore,

Ginny's Opportunity cost of producing one model = $\frac{400}{20}$

= $20 per model

Eric’s opportunity cost of building models = $20 + 35% of $20

= $20 + $7

= $27 per model

Hence, Ginny has a comparative advantage in building models because Ginny's opportunity cost of building model is lower than Eric's opportunity cost.

5 0

3 years ago

ABC Company uses a Materials Inventory account to record both direct and indirect materials. ABC charges direct materials to WIP

Elodia [21]

Answer:

D. $80,000

Explanation:

When costs are incurred during manufacture, they are debited to the Work In Process Account.

Note that, ABC charges direct materials to WIP and indirect materials are charged to the Factory Overhead account.

Total Direct Materials = Total Materials Issued to Production - Indirect Materials Issued to Production

therefore,

Total Direct Materials = $110,000 - $30,000 = $80,000

Conclusion :

The debit to Work-in-Process Inventory account for materials is $80,000

3 0

3 years ago

Herr Corporation has 3,000 shares of 8%, $120 par value preferred stock outstanding at December 31, 2017. At December 31, 2017,

Sliva [168]

Answer:

1. $28,800

$103,200

2. $28,800

$103,200

3. $86,400

$45,600

Explanation:

1. The dividend paid to preferred stockholders = Shares × Par value × Percentage

= 3,000 shares × $120 × 8%

= $28,800

The dividend paid to Common stockholders = Cash dividend - Dividend paid to preferred stockholders

= $132,000 - $28,800

= $103,200

2. The dividend paid to preferred stockholders = Shares × Par value × Percentage

Note :- Because preferred stocks are non-cumulative in nature, the company is not allowed to pay last two years' dividends and preferred stocks are liable for payment only for the current year.

= 3,000 shares × $120 × 8%

= $28,800

The dividend paid to Common stockholders = Cash dividend - Dividend paid to preferred stockholders

= $132,000 - $28,800

= $103,200

3. The dividend paid to preferred stockholders = Shares × Par value × Percentage × Number of years

Note: Since preferred stocks are cumulative in nature, the company is forced to pay last two years' dividends along with the current year's dividend.

= 3,000 shares × $120 × 8 % × 3 years

= $86,400

The dividend paid to Common stockholders = Cash dividend - Dividend paid to preferred stockholders

= $132,000 - $86,400

= $45,600

4 0

4 years ago

Garden Corporation uses cost-plus pricing with a 30% mark-up. The company is currently selling 12,000 units at $21.45 per unit.

mel-nik [20]

Answer:

$23.44

Explanation:

The computation of profit charge per unit for earning same annual profit is shown below:

Given that

No of Units Sold = 12,000

Sale Price of each Unit = $21.45

Variable Cost = 11.50

So,

Contribution Per Unit is

= Selling price per unit - variable cost per unit

= $21.45 - $11.50

= $9.95

So,

Total Contribution is

= 12,000 units × $9.95

= $119,400

And,

Fixed Costs for the year is $60,000

So, the Profit for the year is

= Contribution margin - fixed cost

= $119,400 - $60,000

= $59,400

Now If the demand for the product falls to 10,000 Unit

So we assume Number of units expected to be sold is10,000

Since Variable cost Per Unit is 11.50

So, the Total Variable Cost is

= 10,000 units × $11.50

= $115,000

And,

Fixed Cost per annum $60,000

Expected Profit $59,400

So, the total amount is

= $115,000 + $60,000 + $59,400

= $234,400

So, the price per unit charged is

= $234,400 ÷ 10,000 units

= $23.44

3 0

3 years ago

Gerald Murphy is a manager at Wright & Wayner, a publishing house which is a very employee-friendly company. The demarcation

Alecsey [184]

Answer:

E) Social Loafing

Explanation:

social loafing is the phenomenon of a person who exerts less effort to achieve a goal when working in a group than when working alone

3 0

3 years ago