A beekeeper lives adjacent to an apple orchard. The orchard owner benefits from the bees because each hive pollinates about one acre of apple trees. The orchard owner pays nothing for this​ service, however, because the bees come to the orchard without his having to do anything. Because there are not enough bees to pollinate the entire​ orchard, the orchard owner must complete the pollination by artificial​ means, at a cost of ​$10 per acre of trees. Beekeeping has a marginal cost
MC = 10 + 5Q
where Q is the number of beehives. Each hive yields £50 worth of honey.
A) Assuming the beekeeper wishes to maxmise his profits, how many beehives will the beekeeper maintain?
B) What is the socially effiecient number of hives?

Answers

Answer 1

Answer:

A. The number of beehives to be maintained is 8

B. The socially effiecient number of hives is 10

Explanation:

A. In order to calculate the amount of beehives that the beekeeper will maintain assuming the beekeeper wishes to maxmise his profits we would have to use the equality of MC and the price and can be calculated as follows:

P=MC

50=10 + 5Q

Q=8

The number of beehives to be maintained is 8

B. To calculate the socially effiecient number of hives we would have to equating the marginal social benefit and marginal cost as follows:

The orchard owner must complete the pollination by artificial​ means, at a cost of ​$10 per acre of trees, therefore,

MSB=MC

50+10=10 + 5Q

Q=10

The socially effiecient number of hives is 10


Related Questions

Basics Ltd reported current liabilities of R3 000 and a quick ratio of 1,2. The company has current assets of R6 000. If the company reports the cost of goods sold at R4 000 for the given year, what is the inventory turnover?

Answers

The inventory turnover for the given year is 3.33, calculated by dividing the cost of goods sold by the average inventory of R1200.

To calculate the inventory turnover, we first need to determine the inventory value. We can use the quick ratio formula to find the inventory amount.Quick ratio = (Current assets - Inventory) / Current liabilitiesRearranging the formula, we have: Inventory = Current assets - Quick ratio * Current liabilitiesSubstituting the given values, we have:Inventory = R6000 - 1.2 * R3000Inventory = R6000 - R3600Inventory = R2400The inventory value is R2400. To calculate the inventory turnover, we divide the cost of goods sold by the average inventory. In this case, the cost of goods sold is given as R4000. The average inventory is the sum of the beginning and ending inventory divided by 2. Since we don't have information about the beginning and ending inventory, we can assume they are equal, resulting in an average inventory of R2400/2 = R1200.Inventory turnover = Cost of goods sold / Average inventoryInventory turnover = R4000 / R1200Inventory turnover = 3.33Therefore, the inventory turnover for the given year is 3.33.

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What do you need to do if you have a
job and earn a paycheck?
A. put half of your paycheck in the bank
B. file a tax return
C. submit your pay stubs to your local law enforcement
office
D. invest in a 401k

Answers

Answer is D Welcome lol

Suppose that a firm has both fixed-rate and floating-rate debt outstanding. What effect will a decline in interest rates have on the firm's times-interest-earned ratio

Answers

Answer and Explanation:

The times interest earned ratio refers to the ration that shows a relationship between the earnings before interest and taxes and the interest payments. In the case when the rate of interest declines so the interest payment would also be reduced that result in an increment of the times earned ratio keeping the EBIT unchanged.

This represents that the company has the good capacity to coverup the interest payments

Find an example, in the last ten years, of the Federal Reserve'suse of monetary policy. Be specific as to the actions. Was itsuccessful? Explain.

Answers

QE involved the Fed buying large amounts of government bonds and other securities in order to increase the money supply and stimulate lending and investment.

The Fed implemented three rounds of QE between 2008 and 2014, with the total amount of assets purchased reaching nearly $4.5 trillion. The policy was generally viewed as successful in stabilizing financial markets and spurring economic growth, although some critics raised concerns about the potential for inflation and the distortion of financial markets.

Overall, the Fed's use of monetary policy in the form of quantitative easing was largely successful in supporting the economy during a difficult period, although its long-term effects on inflation and financial markets remain somewhat uncertain.
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Determine the missing amount:
Assets=Liabilities+owners Equity x 272000 573000

Answers

Based on the given amounts of assets and liabilities, the missing amount of Owner's equity is $301,000

How to find the equity?

The Owners equity is one of the parts of the Accounting equation which is:

Assets = Liabilities + Owners Equity

The Assets in this instance is $573,000 and the Liabilities are $272,000.

The Owner's equity is the missing amount and it can be found as:

573,000 = 272,000 + Owners Equity

Owners Equity = 573,000 - 272,000

Owners Equity = $301,000

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The December 31, 2016 balance sheet of Jensen Company showed Equipment of $76,000 and Accumulated Depreciation of $18,000. On January 1, 2017, the company decided that the equipment hasa remaining useful life of 6 years with a $4,000 salvage value. Compute the depreciable cost of the equipment. Depreciable cost Compute the revised annual depreciation.
Revised annual depreciations

Answers

Answer:

A. $54,000

B. $9,000

Explanation:

A. Computation for the depreciable cost of the equipment

Book value, 1/1/17 $58,000

($76,000 – $18,000)

Less salvage value $4,000

Depreciable cost $54,000

($58,000-$4,000)

Therefore the depreciable cost of the equipment is $54,000

B. Computation for the revised annual depreciation

Revised annual depreciation = $54,000÷6 years

Revised annual depreciation = $9,000

Therefore the revised annual depreciation is $9,000

Question 4
The opposite of a good is a
O Good
O Service
O Wants
O Needs

Answers

the answer is service

Discuss several ways to punish white-collar crimes discussed in the text. Discuss the pros and cons of each.

Answers

The several ways to punish white-collar crimes are;

fines home detention community confinement

What is white-collar crimes?

Financially driven, nonviolent or indirectly violent crime committed by people, businesses, and government officials is referred to as white-collar crime.These offenses cover a wide range of fraudulent practices, including money laundering, health care fraud, mortgage fraud, and securities fraud.

However, the scope goes beyond these and encompasses additional offenses like insider trading, tax evasion, and embezzlement. Whenever at least one victim experienced significant financial harm, the federal sentencing guidelines recommend a longer jail term.

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Perpetual Inventory Using Weighted Average
Beginning inventory, purchases, and sales for WCS12 are as follows:
340 units at $10
200 units
360 units at $11
400 units
Oct. 1
13
22
29
Inventory
Sale
Purchase
Sale
a. Assuming a perpetual inventory system and using the weighted average method, determine the weighted average unit cost after the October 22 purchase. Round your answer to
two decimal places.
per unit
b. Assuming a perpetual inventory system and using the weighted average method, determine the cost of goods sold on October 29. Round your "average unit cost" to two decimal
places.
$
c. Assuming a perpetual inventory system and using the weighted average method, determine the inventory on October 31. Round your "average unit cost" to two decimal places

Answers

Perpetual Inventory can be calculated as follows:

a. Weighted average unit cost after the October 22 purchase:

Beginning inventory:

340 units at $10 = $3,400

Purchases:

200 units at $10 = $2,000

360 units at $11 = $3,960

Total units: 340 + 200 + 360 = 900 units

Total cost: $3,400 + $2,000 + $3,960 = $9,360

Weighted average unit cost = Total cost / Total units

=$9,360 / 900 units

≈ $10.40 (rounded to two decimal places)

b. Cost of goods sold on October 29:

Units sold: 400 units

Cost of goods sold = Units sold * Weighted average unit cost

= 400 units * $10.40

= $4,160

c. Inventory on October 31:

Remaining units: 100 units (900 units - 400 units)

Weighted average unit cost (from part a): $10.40

Inventory value = Remaining units * Weighted average unit cost

= 100 units * $10.40

= $1,040

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A credit union is different from a bank mainly because

Answers

Answer:D:(A cooperative lending institution for a particular group.)

Explanation:

A credit union is different from a bank mainly because it is owned and controlled by its members, who are typically individuals with a common bond, such as belonging to a specific community or organization.

In the context of a credit union, a common bond refers to a shared characteristic or affiliation among its members, such as living in the same community, working for the same employer, or belonging to a specific organization.

This common bond serves as the basis for membership eligibility and participation in the credit union. It fosters a sense of community and cooperation among members, who collectively own and control the credit union.

The common bond principle promotes a more personalized and community-oriented approach to financial services, catering to the specific needs and interests of the members it serves.

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When asked how positive or negative they feel about their work, fewer than 20% of U.S. workers report being dissatisfied with their jobs.

Answers

According to statistical data, it is indeed TRUE that less than 20% of U.S. workers are dissatisfied with their jobs.

According to recent labor statistics:

85% of Americans are satisfied with their jobs Most Americans don't mind the roles they execute at work

If 85% of people are satisfied then the percentage is potentially dissatisfied is:

= 100% - 85%

= 15%

It is therefore true that less than 20% are dissatisfied.

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Suppose you start saving for retirement when you are 45 years old. You invest $5,000 the first year and increase this amount by 3% each year to match inflation for a total of 20 years. The interest rate is 10% per year. How much money will you have saved when you are 65 years old

Answers

Answer:

FV= $404,734.15

Explanation:

Giving the following information:

Annual investment (A)= $5,000

Increase rate= 3%

Interest rate= 10%

Number of periods= 20 years

To simplify calculations, we will sum up the increased rate to the interest rate. The effect on the investment of both rates is the same.

Real interest rate= 0.03 + 0.1= 0.13

Now, to determine the nominal value of the account in 20 years, we need to use the following formula:

FV= {A*[(1+i)^n-1]}/i

A= annual deposit

FV= {5,000*[(1.13^20) - 1]} / 0.13

FV= $404,734.15

What are the factors of production? Is one factor more important than the others? If so, which one? Why?

Answers

Answer:

No economic activity can happen without all three of them. However, different factors will be more or less important to different economic activities. For example, if one is engaged in subsistence farming, land is more important than the other factors. Labor and capital are important, but land is irreplaceable

Which is not a consideration when allocating assets and diversifying? A. Real estate holdings B. Avoiding similar investments C. Rate of return D. Portfolio size​

Answers

When one is considering the allocation of their assets as well as how to diversify them, they don't consider A. Real estate holdings.

Diversification involves:

Investing in non-similar assets. Investing in a wide array of different assets to reduce risk.

When thinking about diversifying your assets, one doe not have to think about the number of real estate holdings they already hold as there are other assets to invest in.

In conclusion, option A is correct.

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Answer:D

Explanation:

Just took the test

Question 1 (1 point)
"Tom, at Bode Corporation we align our individual goals with the company's goals.
That is, as managers, we use
to drive ourselves and our employees
to accomplish key goals that are linked with the company's success," said Tom's new
CEO.
remuneration
contingency management
quantitative management
management by objective
time-and-motion studies
Question 2 (1 point)
"With the computing power available today, I'm surprised that the quantitative

Answers

Answer:s

Explanation:s

s

management with goals. As a result, (D) is the best choice.

What is meant by Contingency management ?

Token economies are one type of contingency management. Both solo and group formats can use token systems. A wide variety of populations, such as those who are delinquent, have success with token systems, including those who are addicted, have special needs, and are addicted. The usage of token systems with very young children is, however, under scrutiny from new research.

Stuttering treatment would be an exception to the rule in the last sentence. The objective of such systems is to progressively dissipate and assist the user in starting to access the natural community of reinforcement (the reinforcement typically received in the world for performing the behavior).

Token systems and integrating them with other interventions in the classroom are covered in Walker's (1990) overview. The extent of tokens is described by him.

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Explain how opportunity cost is different for economic goods and free goods

Answers

Answer:

The difference is that free goods have exactly zero opportunity cost, because they cost nothing, their price is zero, and their use is non rival, and non excludable, meaning that if a person uses a free good, that person does not prevent any other person from using the good.

Economic goods, on the other hand, are goods that have a price, and that have a cost of production. Besides they are rival and/or exclusionary. The opportunity cost of an economic good varies depending on the good, but it is never zero.

In the prepare phase of your analysis, you described the data sources you used. According to the Case Study Roadmap, this description should include where the data is located and how it is organized. It should also consider issues with bias or credibility, problems with the data, and how you verified its integrity. Finally, your description should explain how the data helped you answer your questions. Take a moment to review your description now. What steps could you take to make it even more descriptive? 1 point

Answers

To make the description of the data sources in the prepare phase more descriptive, you can consider the following steps:

Specify the location of the dataDetail the organization of the dataAddress bias and credibility

Some steps to make the data sources more descriptive

Specify the location of the data: Provide specific information about the sources of the data, such as the name of the database, website, or organization where the data was obtained. If applicable, mention any specific datasets or files used.

Detail the organization of the data: Describe how the data is structured or organized, whether it is in a tabular format, spreadsheets, databases, or any other specific format. Mention the variables or fields present in the data and how they are arranged.

Address bias and credibility issues: Discuss any potential biases or credibility concerns associated with the data sources. Consider the source's reputation, the methodology used to collect the data, and any known limitations or biases in the data collection process.

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Can someone explain this to me?

Since inflation is already factored into the data, what is the most likely reason that the costs of a doctorate degree rise to such a high level?

Can someone explain this to me? Since inflation is already factored into the data, what is the most likely

Answers

The rate at which prices increase over a specific time period is known as inflation.

What is the meaning of Inflation?

Inflation is often measured in broad terms, such as the general rise in prices or the rise in a nation's cost of living.

Although low inflation might be detrimental, both levels can hurt the economy. The Fed will adopt the opposite strategy when the economy is having trouble or inflation is too low by cutting interest rates or purchasing assets to boost cash flow.

The main cost of inflation is the erosion of real income, which occurs when prices rise unevenly and cause some customers' purchasing power to decline. For both those who receive and pay fixed interest rates, inflation might over time affect their ability to make purchases.

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Dale is a guitar teacher and Terrence is a tile layer. If Dale teaches Terrence's daughter to play the guitar in
exchange for Terrence tiling Dale's kitchen floor,
a. only Dale is made better off by trade.
O b. both Dale and Terrence are made better off by trade.
c. neither Dale nor Terrence are made better off by trade.
O d. only Terrence is made better off by trade.

Answers

If Dale teaches Terrence's daughter to play the guitar in exchange for Terrence tiling Dale's kitchen floor Option B.  both Dale and Terrence are made better off by trade.

In this scenario, Dale is a guitar teacher and Terrence is a tile layer. Dale teaches Terrence's daughter how to play the guitar in return for Terrence tiling Dale's kitchen floor. It is a classic example of trade and bartering. Dale, the guitar teacher, would have had to pay for tile installation if he hadn't bartered with Terrence, the tile layer. Terrence, on the other hand, would have had to pay for guitar lessons if he hadn't traded with Dale.

Both Dale and Terrence, therefore, benefit from the trade, and they are both better off as a result. Because Dale receives tile installation in exchange for teaching guitar lessons, and Terrence receives guitar lessons in exchange for tile installation, both benefit.

In conclusion, the answer is (b) both Dale and Terrence are made better off by trade. When both parties are better off after a trade, it is known as a mutually beneficial trade. Trade, in general, promotes mutual gains by allowing people to concentrate on what they do best and exchange their output with others for goods and services that they desire. Therefore, the correct option is B.

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is it true or false that the socioeconomic model of social responsibility emphasizes the effort of business decisions on society​

Answers

Answer:

I pretty sure it's true

Explanation:

hope this helps

9. Give four reasons why Omondi satisfy hunger for food before going entertainment (4mks) 10. Highlight four differences between goods and services (4mks) Services​

Answers

The reason why Omondi will satisfy hungler for food before going to Chaka Ranch for entertainment includes:

Basic wants are essential for survival. Resources are limited. Hunger pangs can be distracting/It can interfere with his enjoyment of the entertainment.

Why does Omondi satisfy his hunger?

By eating first, he can fully focus on and enjoy the entertainment without feeling uncomfortable or distracted by hunger. The entertainment venues also offer expensive and unhealthy food options, which may not be suitable for Omondi's dietary preferences or budget.

By eating, he can avoid spending money on unnecessary food or consuming food that does not align with his dietary choices. Also, some entertainment venues may not offer food at all.

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What types of people make up a persons personal network

Answers

A personal network is a set of human contacts known to an individual, with whom that individual would expect to interact at intervals to support a given set of activities.

By comparing prices at different stores, consumers will:

Answers

By comparing prices at different stores, consumers will save money and make informed purchasing decisions.

How can comparing prices at different stores benefit consumers?

Comparing prices at different stores allows consumers to make informed purchasing decisions and save money. By taking the time to research and compare prices, consumers can identify the best deals and discounts available for the products they intend to buy.

This practice helps them ensure that they are getting the most value for their money. It can also help consumers uncover any price discrepancies or inflated prices allowing them to avoid overpaying for goods and services.

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Rock industries allocates manufacturing overhead at a predetermined rate of 160% of direct labor cost. Any overallocated or underallocated overhead is closed to the cost of goods sold at the end of the month. Below is information on job 205 that was in process at the end of the month of October.

Direct materials $4,000
Direct labor $3,000
Allocated manufacturing overhead $4,800

Jobs 206, 207, and 208 were started in November. Direct materials that were used in November were $26,000 and direct labor costs were $21,000. For the month of November, actual manufacturing overhead was $32,000. The only job still in process on the last day of November was job 104withthe following costs: $3,000 for direct materials and $1,500 for direct labor.

Required:
a. Calculate the cost of goods manufacturered for November.
b. Prepare the journal entries to record the current month activity.
c. Calculate the amount of overallocated or underallocated manufacturing overhead. Be sure to label the answer as either overallocated or underallocated.
d. Prepare the accounting entries to close the overallocated or underallocated manufacturing overhead on November 30?

Answers

Answer:

Cost of goods manufactured for November.

Manufacturing Schedule Cost

Beginning Inventory (Job 205)                $11,800

Direct materials                                       $26,000

Direct labor costs                                     $21,000

Applied Overheads ($21,000 x 160%)    $33,600

Less Ending Inventory (Job 104)            ($6,900)

Cost of Goods Manufactured                 $85,500

Journal entries to record the current month activity.

Debit : Work In Process $80,600

Credit : Direct materials                                       $26,000

Credit : Direct labor costs                                     $21,000

Credit : Applied Overheads ($21,000 x 160%)    $33,600

Calculation of amount of over allocated or under allocated manufacturing overhead

Actual Manufacturing Overheads = $32,000

Applied Manufacturing Overheads = $33,600

Therefore, Overheads Over-applied = $1,600

Suppose Congress approves a proposed "temporary worker" program and American firms find
out that they are able to hire workers while paying lower wages. This happens because workers
become "less scarce'. How would this economic shock impact the market for lettuce?

Answers

Answer:

The market for lettuce would be impacted in three ways: labor supply would increase, meaning that lettuce producers can now hire more workers for a lower price.

This cheaper labor would likely increase supply, because more producers would try to enter the market to take advantage of the cheap workers.

Finally, the lower labor costs, and the higer supply, would reduce the price of lettuce, meaning that consumers will be able to buy more lettuce for less money.

Robyn was a lawyer for the Department of State who has been disbarred for ethical lapses including dishonesty and interfering with investigations.
After losing his license to practice law, he was fired from the State Department. What MOST likely must Robyn do now?
A. Appeal his case to the American Bar Association.
B. Find a new career outside the legal profession.
C. Wait a year and reapply for his license.
D. Take his case to an appeals court.

Answers

The most likely thing for Robyn to do is B. Find a new career outside the legal profession.

Why does Robyn need to leave the legal profession ?

Since he has lost his license to practice law, he would not be able to continue working as a lawyer or in any other legal capacity. In addition, his firing from the State Department would likely make it difficult for him to find employment in a related government agency.

Therefore, the most realistic option for Robyn would be to seek employment in a different field or industry. Appealing his case to the American Bar Association or taking his case to an appeals court would likely not be fruitful options, as his disbarment and firing from the State Department suggest that his ethical lapses were significant and serious.

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Three different methods for assembling a product were proposed by an industrial engineer. To investigate the number of units assembled correctly with each method, 30 employees were randomly selected and randomly assigned to the three proposed methods in such a way that each method was used by 10 workers. The number of units assembled correctly was recorded, and the analysis of variance procedure was applied to the resulting data set. The following results were obtained: SST = 10,730; SSTR = 4520.

Answers

The analysis of variance (ANOVA) table is a tabular representation of the findings. It details each source of variation's sources of variation, degrees of freedom, sum of squares, mean squares, and F-ratio.

The ANOVA table

To set up the ANOVA table, we need the following information:

Total sum of squares (SST): 10,800

Sum of squares between treatments (SSTR): 4560

Calculating the sum of squares within treatments (SSE):

SSE = SST - SSTR

SSE = 10,800 - 4560

SSE = 6240

For degrees of freedom (df),

Total degrees of freedom (dfTotal) = Total number of observations - 1

Treatment degrees of freedom (dfTreatment) = Number of treatments - 1

Error degrees of freedom (dfError) = dfTotal - dfTreatment

In this case.

Total number of observations = 30

Number of treatments = 3

dfTotal = 30 - 1

= 29

dfTreatment = 3 - 1

= 2

dfError = 29 - 2

= 27

Calculating mean squares (MS),

MST = SSTR / dfTreatment

MSE = SSE / dfError

MST = 4560 / 2 = 2280

MSE = 6240 / 27 ≈ 231.85

Calculating the F-ratio,

F-ratio = MST / MSE

F-ratio = 2280 / 231.85

≈ 9.83

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Question:

Three different methods for assembling a product were proposed by an industrial engineer. To investigate the number of units assembled correctly with each method. 30 employees were randomly selected and randomly assigned to the three proposed methods in such a way that each method was used by 10 workers. The number of units, assembled correctly was recorded, and the analysis of variance procedure was applied to the resulting data set. The following results were obtained: SST = 10,800. SSTR = 4560. Set up the ANOVA table for this problem. Using alpha = .05. test for any significant difference in the means for the three assembly methods.

Three different methods for assembling a product were proposed by an industrial engineer. To investigate

00 For Market failures means that the market has not achieved its optimum production outcome. This means that it has not produced the correct quantity of goods and services. QUESTION 1 Conduct a research to any small business that is manufacturing goods in your community. Make an appointment to interview the owner for the purpose of collecting the information using the questionnaire below. 1.1 General information: ● Name of the firm / business Specify the type of goods or service ● ● Position of the person interviewed ● Date of the interview 1,2 Explain briefly the negative impact the following factors have in your business. (10) Lack of information: ● Price discrimination Immobility of factors of production with special reference to: Physical capital Structural changes ● ● (1) ● (1) (1) (1) [14] QUESTION 2: Interview 3-4 community members that reside near the business you have visited. 2.1 Ask them to name any TWO negative externalities and TWO positive externalities caused by the local business, (2 x 2) (4) 2.2 Request them to list any TWO characteristics of public goods. (2 x 1) (2) 2.3 Use the negative externality and positive externality graphs to explain the impact this business have to the society (10) [16]​

Answers

The first step in researching a small business in your neighborhood is to find a suitable nearby manufacturing company.

Once you do, contact the manager or owner to arrange an interview. Gather general information during the interview, such as the name of the company or business, what types of products or services they provide, the interviewer's position, and the time and date of the interview.

Then, focus on the detrimental effects different situations can have on the company. Briefly describe the impact on business of informational gaps, price discrimination, immobility of production variables (with a focus on physical capital), and structural changes.

Interview three to four locals who live close to the establishment you just visited. Ask them to list two unfavorable and two beneficial externalities brought about by the neighborhood business. Ask them to add two properties of public goods to the list as well.

Finally, use the data from the interviews to create graphs showing the positive and negative externalities of business on society. These infographics will graphically describe the costs and benefits that the company's neighborhood has.

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Andretti Company has a single product called a Dak. The company normally produces and sells 81,000 Daks each year at a selling price of $58 per unit. The company’s unit costs at this level of activity are given below:



Direct materials $ 8.50
Direct labor 10.00
Variable manufacturing overhead 2.40
Fixed manufacturing overhead 10.00 ($810,000 total)
Variable selling expenses 4.70
Fixed selling expenses 3.00 ($243,000 total)
Total cost per unit $ 38.60


A number of questions relating to the production and sale of Daks follow. Each question is independent.



Required:

1-a. Assume that Andretti Company has sufficient capacity to produce 105,300 Daks each year without any increase in fixed manufacturing overhead costs. The company could increase its unit sales by 30% above the present 81,000 units each year if it were willing to increase the fixed selling expenses by $130,000. What is the financial advantage (disadvantage) of investing an additional $130,000 in fixed selling expenses?

1-b. Would the additional investment be justified?

2. Assume again that Andretti Company has sufficient capacity to produce 105,300 Daks each year. A customer in a foreign market wants to purchase 24,300 Daks. If Andretti accepts this order it would have to pay import duties on the Daks of $1.70 per unit and an additional $12,150 for permits and licenses. The only selling costs that would be associated with the order would be $2.00 per unit shipping cost. What is the break-even price per unit on this order?

3. The company has 700 Daks on hand that have some irregularities and are therefore considered to be "seconds." Due to the irregularities, it will be impossible to sell these units at the normal price through regular distribution channels. What is the unit cost figure that is relevant for setting a minimum selling price?

4. Due to a strike in its supplier’s plant, Andretti Company is unable to purchase more material for the production of Daks. The strike is expected to last for two months. Andretti Company has enough material on hand to operate at 25% of normal levels for the two-month period. As an alternative, Andretti could close its plant down entirely for the two months. If the plant were closed, fixed manufacturing overhead costs would continue at 35% of their normal level during the two-month period and the fixed selling expenses would be reduced by 20% during the two-month period.

a. How much total contribution margin will Andretti forgo if it closes the plant for two months?

b. How much total fixed cost will the company avoid if it closes the plant for two months?

c. What is the financial advantage (disadvantage) of closing the plant for the two-month period?

d. Should Andretti close the plant for two months?



5. An outside manufacturer has offered to produce 81,000 Daks and ship them directly to Andretti’s customers. If Andretti Company accepts this offer, the facilities that it uses to produce Daks would be idle; however, fixed manufacturing overhead costs would be reduced by 30%. Because the outside manufacturer would pay for all shipping costs, the variable selling expenses would be only two-thirds of their present amount. What is Andretti’s avoidable cost per unit that it should compare to the price quoted by the outside manufacturer?

Answers

If there is a 30% boost in Andretti Company's sales, an extra $188,400 in income will be produced.

On the other hand, there will be an extra $130,000 charge for fixed selling expenditures.

As a result, the organization will witness a boost of $58,400 in its overall profits.

Would this be a sound financial decision?

Making an extra investment of $130,000 would be a sound decision as it would lead to an elevation of $58,400 in the net income.

Here is a more detailed explanation of the calculations:

The company's total variable expenses would increase from $3,839,000 to $4,511,100.

The company's total fixed expenses would increase from $1,053,000 to $1,183,000.

The company's net income would increase from $795,000 to $853,400.

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A company purchased $3,300 of merchandise on July 5 with terms 3/10, n/30. On July 7, it returned $900 worth of merchandise. On July 12, it paid the full amount due. Assuming the company uses a perpetual inventory system, and records purchases using the gross method, the correct journal entry to record the payment on July 12 is:

Answers

The correct journal entry would be Debit Accounts Payable $2,300 ; Credit Merchandise Inventory $46 and Credit Cash $2,254.

A bookkeeping method known as the double entry or journal entry involves recording transactions in two or more accounts. The majority of transactions involve two accounts. The difference between the two accounts gets credited to the other. Moreover, both accounts could be credited or debited. More than two entries may be necessary for some transactions. The transactions that have an impact on more than two accounts are those. For instance, things that are discounted or that are partially paid for with credit and partially with cash. Compound entries are used in the journals for these transactions.

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The complete question is: A company purchased $3,200 of merchandise on July 5 with terms 2/10, n/30. On July 7, it returned $900 worth of merchandise. On July 12, it paid the full amount due. Assuming the company uses a perpetual inventory system, and records purchases using the gross method, the correct journal entry to record the payment on July 12 is:

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