Unit variable costs may be affected by level of activity
Unless there is a cost rise, unit variable costs remain constant at the per-unit level. The cost of a unit is unaffected by activity level. Say, for instance, that a salesman's compensation is $5 per unit. If sales increase, the cost of the sales commission will increase overall while being constant at the unit level. In a similar vein, even if sales drop, commission will still remain $5 per unit. Variable costs for each unit may change due to changes in material costs, direct labor rates, and sales commission. Raw materials, piece-rate labor, production supplies, commissions, shipping expenses, packing costs, and credit card fees are a few examples of variable costs.
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in the figures below, the first graph represents individual firms and the second the market as a whole. if there are 100 competitive firms of the size represented by ac1, how much does an individual competitive firm produce?
'in the figures below, the first graph represents individual firms and the second the market as a whole. if there are 100 competitive firms of the size represented by ac1, 1.1m an individual competitive firm produces.
It makes similar products at all sellers. There are many buyers and sellers, each small compared to the market as a whole, or many potential sellers.
A perfect competitor is a price taker. That is, you must accept the equilibrium price at which you sell your goods. A perfectly competitive company will not sell if it tries to exceed the market price even a little.
A competitive firm is one that (1) has many buyers and sellers in the market. (2) Products offered by different sellers are almost identical. (3) Firms are generally free to enter and exit the market. 2. Figure 2 shows the cost curve for a typical company.
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if policymakers impose import restrictions on clothing, the u.s. trade deficit will shrink. a. true b. false
True. When restrictions are imposed, the quantity of imports will decrease, resulting in a smaller trade deficit (the sum of the total value of imports and exports).
What is it called when import restrictions are imposed?
A tariff is a tax a nation imposes on goods and services imported from another nation in order to influence that nation, generate revenue, or safeguard its competitive advantages.
How do trade restrictions affect things?
Free trade can be hindered, rich nations favored, product choices restricted, prices increased, net income decreased, employment decreased, and economic output decreased as a result of trade barriers. Due to the government's strong influence over the law, it is often used as a trade barrier.
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why is allowance for doubtful accounts credited, instead of accounts receivable, when recording the adjusting entry for bad debts? multiple choice question. allowance for doubtful accounts is not credited; accounts receivable is credited when recording the adjusting entry for bad debts. allowance for doubtful accounts is credited because if accounts receivable were credited, the assets would be overstated. allowance for doubtful accounts is credited because if accounts receivable were credited, the assets would be understated. accounts receivable consists of many customer accounts and thus cannot be credited unless it is known which specific customer is not going to pay.
The allowance for doubtful accounts credited, instead of accounts receivable when recording the adjusting entry for bad debts Because accounts receivable is made up of numerous client accounts, it cannot be credited unless it is known which particular customer will not pay.
The provision for questionable accounts is referred to as a "counter asset" since it reduces the value of an asset, in this example, the accounts receivable. The compensation, often known as a doubtful account, is management's projection of the amount of accounts receivable that customers will not pay. Let's assume, using the aforementioned example, that on June 30 a business reports an accounts receivable debit balance of $1,000,000. The business predicts that $50,000 will not be converted into cash and expects some consumers won't be able to pay the full amount.
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based on what you have learned and your own research can you provide examples of completion in the education market?
Geographic location also plays a role in competition. Schools in good areas will have more students or more wealthy students because parents prefer their children to study in their neighborhood.
In geography, location or place refer to a region on the Earth's surface or beyond. The term location often suggests a higher degree of certainty than place, the latter often signifying an entity with an uncertain boundary, relying more on human or social aspects of place identity and sense of place than on geometry. A locality, settlement, or populated location is likely to have a well-defined name, but a boundary that is not well defined fluctuates depending on context. London, for example, has a legal limit, but this is unlikely to be totally consistent with common usage. An area within a town, such as Covent Garden in London, nearly always contains some ambiguity regarding its extent.
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a project has an expected risky cash flow of $500 in years 1, 2 and 3. the risk-free rate is 4 percent, the expected market rate of return is 14 percent, and the project's beta is 1.20. (a) calculate the certainty equivalents cash flow for years 1, 2 and 3 (ceq). (b) what is the difference between the ceqs and the pvs of the year 1, 2, 3 risky cash flows?
a) $448.2759, $401.9025, and $360.3264 are the certainty equivalent cash flow from years 1 to 3.
b) $17.2414, $30.3210, and $39.9975 is the variation between the certainty equivalent cash flow and its present value.
Thus, the certainty equivalent cash flow is higher than its PV.
Define certainty equivalent cash flow.When a cash flow is received at present, which is more predictable than received in the future, is termed as the certainty equivalents cash flow. It is based on eliminating the risk premium and only concentrating on the risk-free cash flow. It is found by making adjustments to the present value of the cash flow using the risk-free rate.
a) Calculation of certainty equivalent cash flows:
The required rate of return = Risk-free rate + Beta (Market return - risk free return)
= (4% + 1.2 ₓ (14% - 4%) × 100
= 16%
So the required rate of return is 16%
The certainty equivalent cash flow is computed using the formula:
CEQ= CF/(1+r)ⁿ × (1+rf)ⁿ
Here,
CEQ stands for certainty equivalent cash flow,
CF for cash flow,
r for the required rate of return and
rf for a Risk-free rate
Year Cash flow certainty equivalent cash flow
((Cash flow/(1+16%)^year)×(1+4%)^year
1 $500 $448.2759
2 $500 $401.9025
3 $500 $360.3264
Hence the certainty equivalent cash flow years 1,2, and 3 are $448.2759, $401.9025, and $360.3264.
b) Difference between certainty equivalent cash flow and the present value:
Year Cash flow PV of certainty equivalent Variation in
cash flow cash flow cash flow
(n) (a) (b=a/(1+16%)^n) (c = a/(1+16%)^n)×(1+4&)^n (c-b)
1 $500 $431.0345 $448.2759 $17.2414
2 $500 $371.5815 $401.9025 $30.3210
3 $500 $320.3288 $360.3264 $39.9975
Thus the difference between certainty equivalent cash flow and the present value is $17.2414, $30.3210, and $39.9975 respectively.
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for which company can trend analysis be most useful? a banking company that recently changed its accounting practices, but not its business model a software company whose business model and accounting practices have remained stable over time a mining company that recently changed its business model, but not its accounting practices a retail company that recently changed its accounting practices and its business model
The target market is an example of a product or service’s potential customers. The ABC Company is not necessarily implying that the previous customers will not buy the plastic model cars in the new presentation.
If they change the packaging of their products to appeal to more discerning buyers. Instead, they are focusing on other consumer preferences.A community’s way of life is its culture. It includes the people’s dialect, worldviews, religious practises, customs, social mores, and other general traits.Different nations have various cultures.A company can provide relevant products and services by having a thorough understanding of the target market’s culture.A firm should endeavour to learn the culture of the people before growing abroad. A successful firm must provide goods and services that benefit customers. The Company will be able to avoid producing goods that are in opposition to the peoples’ way of life by having an understanding of culture.
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why would the consumption function (if extended) intersect the spending axis at a positive value? what does this mean? is it realistic?
The consumption function (if extended) intersect the spending axis at a positive value means it is increasing .
What is consumption function?
The link between total consumption and gross national income may be modeled using an economic formula called the consumption function, sometimes known as the Keynesian consumption function. The function was first proposed by British economist John Maynard Keynes, who claimed it could be used to monitor and foresee total aggregate consumer spending.
According to the traditional consumption function, income and changes in income are the only factors that affect consumer spending. If this is the case, aggregate savings should rise proportionately to the GDP's long-term growth. The objective is to establish a mathematical connection between consumer spending and disposable income, but only on an overall scale.
The stability of the consumption function, which is partly based on Keynes' Psychological Law of Consumption, is particularly noteworthy in light of the volatility of investment.
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discuss and name two actual standards numbers/descriptions required for the auto industry supply chain
Two actual standard numbers required for the auto industry supply chain are IATF 16949 and AEC-Q100.
Manufacturers must adhere to strict industry standards throughout the production and testing processes in order for a component to be certified for use in automobiles. IATF 16949, AEC-Q100, and AEC-Q200 are three important standards. The quality management system benchmark for the entire automotive industry.
The IATF 16949-certified facilities are typically expected to manufacture, assemble, and test parts for the automotive industry. The standard tests for active components, such as switches and power amplifiers, are defined by AEC-Q100.
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lark's company has been operating for several years, contracting with the government to create solar arrays. in a recent election, the administration changed and several contracts for solar arrays were canceled. lark has been meeting with his staff to figure out how to adapt to the lack of funds and keep the business going. this is an example of .
Lark has been meeting with his staff to figure out how to adapt to the lack of funds and keep the business going. This is an example of punctuated equilibrium.
A well-known theoretical paradigm for explaining fundamental modifications in organizational activity patterns is the punctuated equilibrium model of organizational transition. According to the punctuated equilibrium model of development, organizations undergo relatively lengthy periods of stability (equilibrium periods) in their core activity patterns, which are then interspersed with brief bursts of major changes (revolutionary periods).
The model of change with punctuated equilibrium is nonlinear. Origins of this model can be found in the 1980s and 1990s. In actuality, the model originated in the fields of biology and anthropology even though it is used to map organizational changes and business strategy.
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jane makes 1000 items a day. each day she spends 8 hours producing those items. if hired elsewhere she could have earned $250 an hour. the item sells for $15 each. production occurs seven days a week. if the explicit costs total $150,000 per month, what is her accounting profit?
If the explicit costs total $150,000 per month, the accounting profit is $300,000
Revenue equals 1000 items per day $15/item30days = $450,000.
Explicit costs are given as $150,000.
Therefore, accounting profit = $450,000-$150,000 = $300,000
What is Revenue?Yield is a term used to describe the profits made and realised on an investment over a specific time frame. Based on the amount invested, the security's current market value, or its face value, it is expressed as a percentage. Yield is made up of the interest or dividends that come with holding a specific security.
Revenue is the total amount of money made from the sale of products or services related to a business's core operations. Because it appears at the top of the income statement, revenue, also known as gross sales, is frequently called the "top line."
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a jacket potato vendor charges $5.89 per potato sold. the variable cost of each potato served is $0.91. the stall has a fixed cost of $500 per week. how many potatoes must the stall sell in order to achieve a profit objective of $750 per week?
The vendor must sell 356 potatoes in order to achieve a profit objective of $750 per week with variable cost of each potato served is $0.91.
What is variable cost?A variable cost is a type of business expense that varies depending on how much a company makes or sells. Depending on a company's production or sales volume, variable costs rise or fall; they increase with rising production (profit)and decline with falling production.Examples of variable costs include raw material and packaging costs for manufacturing businesses, as well as credit card processing fees and shipping costs for retail businesses, which fluctuate with sales. You can compare a variable cost to a fixed cost.Contribution margin, the metric used to calculate a company's break-even or target profit level, is largely dependent on variable costs for a given product.Number of potatoes to be sold = (400+750)/(4.36-1.13)= 356 potatoesHence the total amount of potatoes sold are 356.To learn more about variable cost from the given link:
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aloha, inc., has 8 percent coupon bonds on the market that have 5 years left to maturity. if the ytm on these bonds is 10.12 percent, what is the current bond price?
The current bond price is N 5 x 2, I 10.12 / 2, PMT 40, FV 1000..... PV 918.39 having 8 percent coupon bonds on the market that have 5 years left to maturity.
What is bond price and what is the current bond price of aloha inc having 8 percent coupon bonds on the market?When a person willing to make a bond and a bond is made then the person needs to pay some amount for the bond.The price paid by the investors for the bond is what we call bond price and is expressed in terms of face value.Here the question is asked of if ytm on these bonds is 10.12 percent then what would be the current bond price.The answer would be the current bond price is N 5 x 2, I 10.12 / 2, PMT 40, FV 1000..... PV 918.39 having 8 percent coupon bonds on the market that have 5 years left to maturity.There is a specific way investors and the financial bond makers use to make bonds and for that is needed face value, ytm that is yield to maturity and number of periods till maturity.To know more about market visit:
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a mortgagge loan in which the interest rate charged fluctuates with the level of current interest rates is called
Variable interest rate mortgage loans have an interest rate that varies depending on the level of current interest rates.
An interest rate on a loan or security that fluctuates over time because it is based on an underlying benchmark interest rate or index that is interest rates subject to Variable interest rate regular changes is known as a variable interest rate (also known as an "adjustable" or "floating" rate).
A variable interest rate has the obvious advantage that if the underlying rate or index decreases, so do the borrower's interest payments. On the interest rates other hand, if the underlying index increases, interest payments rise. Fixed interest rates are stable, as opposed to variable interest rates.
Variable interest rate mortgage loans have an interest rate that varies depending on the level of current interest rates.
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samantha manages the marketing department for a large company and has just hired a new employee to run the company's cooperative advertising program. the most appropriate way for samantha to advise staff members that a new employee will be joining their team is by
During the weekly departmental meeting is the most opportune time for Samantha to annoucement staff members that a new employee will be joining their team.
In a nutshell, what is an announcement?A statement given to the public or to the media that provides information about something that has occurred or will occur is known as an announcement. After speaking with the President, Sir Robert made his announcement. Neither administration has made a formal announcement.
What is a message of announcement?An announcement email is a promotional communication distributed to inform recipients of a new development, revision, or change within your company. They are employed to publicize things like: The launch of a new product. a launch of a limited quantity.
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which promotional element refers to a two-way flow of communication between a buyer and a seller and is designed to influence the buyer's purchase decision? multiple choice question. advertising sales promotion personal selling public relations
The promotional element that refers to a two-way flow of communication between the buyer of a good and the seller, is called personal selling.
How does personal selling work?Personal selling is a promotional element that is designed to help influence a person's decision to purchase a good or service. It works by the seller directly communicating with the buyer to convince them to make a purchase.
This means that personal selling requires a two - way flow of communication between the seller and the buyer. The seller cannot be the only one communicating in the hopes of reaching out to several buyers, but instead talks to a buyer at a time.
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the cost-benefit-risk analysis is a set of practical procedures for guiding public expenditure decisions. used by the private sector to determine whether certain projects should be undertaken. difficult when benefits and costs are hard to evaluate. all of the above.
The cost-benefit-risk analysis is a set of practical procedures for guiding public expenditure decisions difficult when benefits and costs are hard to evaluate.
Comparing the anticipated or predicted costs and benefits (or opportunities) connected expenditure with a project choice in order to assess whether it makes sense from a business standpoint is known as a cost-benefit analysis. For instance: The cost to build a new product will be $100,000, and sales of $100,000 per unit are anticipated (unit price = 2). Therefore, 200,000 advantages are sold. The straightforward CBA calculation for this project is 200,000 in financial benefit minus 100,000 in cost, which results in a net benefit of 100,000.
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what effect does the collection of a note receivable, excluding interest, have on the accounting equation?
The effect of collection of notes receivable, excluding interest, on the accounting equation is total assets equal.
Notes receivable is a formal written statement of the amount of the consumer's receivables. As long as it is expected to be collected within one year, the notes receivable will be included in the current asset group which must be reported on the balance sheet of the financial statements.
Notes receivable can also be used to pay off customer receivables. Notes receivable and business receivables obtained from sales are sometimes also referred to as accounts receivable. A backed statement of a note has several other advantages over a statement recorded in the form of accounts receivable. By signing the draft, the debtor acknowledges the debt and is willing to make payments in accordance with the written terms. Thus, the note has a very strong legal claim.
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liz zackery just launched a firm in the sporting goods industry. on the day the company was launched, liz issued a press release, indicating that the vice president of new balance, a highly respected athletic shoe and sports apparel company, had agreed to serve on her board of directors. liz knows that such a high quality appointment will send an important message to her potential clientele. this phenomenon is referred to as .
Signaling is the phenomenon where Liz knows that such a high quality appointment will send an important message to her potential clientele.
What is Signaling?In contract theory, signaling refers to the notion that one party (the agent) knowingly and credibly communicates information about itself to another party. Since it was so intuitive, signaling theory has been applied to many other fields, including human resource management, business, and financial markets, even though it was initially developed by Michael Spence based on knowledge gaps between organizations and potential employees. According to Spence's job-market signaling model, obtaining educational credentials allows (potential) employees to communicate with employers about their level of skill. The fact that the employer thinks the credential is positively correlated with having greater ability and difficult for low ability employees to obtain gives the credential its informational value.
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pogrund vacation properties sells real estate in florida. pogrund requires potential buyers who are interested in a property to remit a $10,000 deposit to show good faith before receiving detailed information about a property. the deposit is fully refundable until a contract is signed. when a contract is signed, the buyer must make an additional deposit to bring the total deposit up to 10% of the purchase price. at that point, the entire deposit becomes nonrefundable. on december 31, 20x1, david corporation makes a good faith deposit of $10,000. david makes an additional $85,000 deposit on march 31, 20x2, when it signs a contract to purchase property from pogrund for $950,000, bringing its total deposit up to 10% of the purchase price. on june 30, 20x2, david corporation informs pogrund that it has decided to terminate the contract, as is its right, and will not complete the purchase of the property. under the terms of the contract, the entire deposit was nonrefundable and is retained by pogrund. required: what is the journal entry pogrund makes to record the receipt of the $10,000 good faith deposit on december 31, 20x1? what is the journal entry pogrund makes on march 31, 20x2, to record the receipt of an additional $85,000 from david corporation when it signs the contract? what is the journal entry pogrund makes on june 30, 20x2, when david notifies pogrund that it is terminating the contract?
The journal entry pogrund makes on June 30, 20x2 when David notifies pogrund that it is terminating the contract are:
Date Particulars Debit Credit
31-Dec-19 Cash 10,000.00
Deposit account 10,000.00
31-Mar-20 Cash 85,000.00
Deposit account 85,000.00
30-Jun-20 Deposit account 95,000.00
Profit and loss account 95,000.00
An agreement is a legally binding agreement between or more parties. As soon as signed, this contractual agreement creates a promise that sure rights and responsibilities can be fulfilled by way of every celebration. In essence, a promise is at the heart of every contract.
A well-drafted, written contract provides facts, and clarity, and protects parties' pastimes if problems get up down the road. The specifics of what the agreement covers can be identified (for instance through a scope of offerings clause or agenda of products), and each party's obligations and rights are expressly stated.
A successful settlement is defined as a contract that: gives you exceptional possible services at the most affordable price. Provides a means to manipulate the scope of offerings. Manages your commercial enterprise's operational and monetary dangers.
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What type of market competition is described in the following passage?
Local power plants are typically the sole providers of electricity in their communities, and thus have significant control over output and prices. This market structure is an example of a(n) ______
Since they are frequently the only sources of electricity in their localities, local power plants have a large amount of control over output and costs. This type of market arrangement is a monopoly.
What is Monopoly?
A scenario known as a monopoly occurs when one company or individual controls the supply of a good or service. A mopolisitic market structure results from the circumstances.
As the name suggests, a monopolistic market is one where one corporation dominates the whole industry. In other words, there is simply one business that caters to the general population.
Due to the company's status as the sole provider, it is able to increase prices, limit output, and make above-average profits.
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10. a fedex sorting machine that cost $10,000 with a usual life of five years and a residual value of $2,000 was purchased on january 1. what is straight-line depreciation for each year?
When a fedex sort machine which cost $10,000 with a normal lifestyle of 5 years and a remaining balance of $2,000 was bought on January 1st, there was a $1,600 straight-line depreciation for every year.
What is the purchased Meaning?bought; purchasing. to get by the payment of money or its equivalent: transitive verb buy. : to attain (real estate) through methods apart from descent. : through toil, peril, or sacrifice.
What is purchased in account?"Actually bought on account" is a term that refers to any lending purchases. In order to improve payables, a business that pays other organization money for delivered goods or services will record the entire sum as a credit entry. The outstanding sum will remain in existence until the owing party receives complete payment.
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chinese automaker, geely, acquired volvo from ford, because it mostly needed the volvo to compete on the global stage.
Chinese automaker, Greely, acquired Volvo from Ford, because it mostly needed the Volvo core competencies to compete on the global stage.
Which of the following accounts for failed mergers and acquisitions?Acquisitions and mergers are frequently time- and money-consuming. The high recovery costs are one of the primary causes of their failure. Successfully integrating two firms can frequently be challenging. As a result, the new business may need to invest in new systems and procedures, which could result in substantial recovery costs.
What dangers do vertical integration pose, excluding those listed below?Vertical integration carries all of the following hazards, WITH THE EXCEPTION of: a lack of command over important resources.
Is the purchase of another company through a stock purchase made with cash or with issuing debt?Acquisitions: When one company purchases another, it may do it with cash, stock, or debt. Mergers are when two businesses combine or consolidate to form a new legal entity.
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in a period of rising prices, management of a company that reports under ifrs is least likely to attempt to influence analysts' opinions of its financial results by:
A company's assets, liabilities, and shareholder equity are all listed on a balance sheet, which is a financial statement. One of the three fundamental financial statements used to evaluate a company is the balance sheet.
As of the publication date, it provides a snapshot of a company's finances, including what it owns and owes.
Why is it necessary for countries' accounting standards to become more comparable?Standards that are more comparable have the potential to make global capital markets more efficient and cut costs for both those who use financial statements and those who prepare them.
What is a balance sheet used for?You can get a snapshot of your company's financial situation at any given time from a balance sheet. A balance sheet, like an income statement and a cash flow statement, can be used by business owners to look at how their company is doing financially.
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which factor is least likely to add to the pressure for a firm to be locally responsive? multiple choice host-government demands differences in consumer tastes and preferences differences in infrastructure switching costs for consumers
Option d.) switching costs for consumers is the correct answer as consumer tastes and preferences, infrastructure, accepted business practices and distribution channels, and host government requirements create pressure on local capacity. At the very least, it could increase the pressure on companies to seek local responses.
Switching costs are the costs that consumers pay as a result of switching brands or products. Switching costs can be financial, psychological, effort-based, and time-based. Switching costs can be categorized into high switching costs and low switching costs.
To meet the pressure to go local, companies need to differentiate their products and marketing strategies by country to take into account these factors that tend to increase a company's cost structure.
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g what is a control system component?question 21 options:spc metricinternal auditstandard or goalattribute
A control system is a collection of numerous parts connected as a unit to guide or regulate itself or any other system in order to generate a specified output. We all know that controlling is the act of regulating or guiding. Hence, the metric internal audit standard or goal attributes all the given options are correct.
What is the component of system control?Executives may use organizational control systems to assess how effectively their organization is operating, identify areas of concern, and then take action to resolve those problems. Executives can choose from three fundamental forms of control systems: (1) output control, (2) behavioral control, and (3) clan control.
A typical motion control system consists of four fundamental components. The controller, amplifier, actuator, and feedback are the four components. The intricacy of each of these pieces will differ depending on the application for which they are created and built.
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a company has total sales revenue of $500,000 for the year. sales discounts, returns, and allowances total $50,000 and the cost of goods sold is $300,000. what is the company's gross profit ratio?
The company's gross profit ratio is 33.33%.
What is a gross profit ratio?A sort of profitability ratio is the gross profit margin ratio, often known as the gross margin. It is useful to calculate the profit generated by a company's sales of goods and services after direct costs are subtracted. Simply put, it is a straightforward indicator to assess the profitability of the business. It is also beneficial to assess how well the business uses its labor force and raw materials during the production process.The cost of products sold is subtracted from the total sales to determine the gross profit in a company's income statement. Only the direct costs of the business are taken into account when calculating the cost of products sold. The direct expenses are erratic because they fluctuate according to the volume of production.The gross profit ratio is calculated as
gross profit ($500,000 − $50,000 − $300,000) divided by net sales ($500,000 − $50,000)*100=33.33%.
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indicate which of teh following statement is true or false and why, a wage rising slowee than the rate of inflation is actually falling
The following statement- a wage rising slower than the rate of inflation is actually falling is True.
A wage is a payment given to the employee for doing the assigned task in the company for a specific period of time. Wages are fixed on an hourly basis. The increase in the prices of services and goods in an economy is called inflation. Inflation gives the rate of increase of prices over a specific period of time. When wage growth rises, inflation also rises. When wage growth falls, inflation also falls.
Wage growth plays a key role in inflation. When companies pay their employees more wages, then the cost of goods and services rises causing inflation. The purchasing power of goods and services falls down when wages are rising slower than the rate of inflation. Hence, we can say that A wage rising slower than the rate of inflation is actually falling.
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as spending increases, there will be upward pressure on the price of inputs including wages. as the cost of production rises, businesses start to increase prices as they attempt to produce more. this scenario best describes .
The scenario best describes Movement along the aggregate supply curve.
The movement of the supply curve is mostly caused by price. Businesses report better earnings as price levels rise in the short term. Their overall productivity level rises as a result. Production decreases as a result of losses caused by falling price levels. The aggregate demand curve will change as a result of price and other elements affecting the level of expenditure by consumers, governments, businesses, and foreigners.
Consumption is more likely to increase when consumers are more confident about avoiding unemployment, which moves the aggregate demand curve to the right. However, when consumers are unconfident, they spend less, which causes the AD curve to move to the left.
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suppose you are a manager of a firm that operates in a duopoly. recently, the state attorney general fined you and your competitor for price fixing. in your market, firms only set prices, not total quantities to sell. from previous experience, you know your competitor has a marginal cost of $1.98. further, your marginal costs are $1.96. the previous cartel price was $10.00, when you and your competitor were price fixing. what price level do you now choose to maximize profits?
Anytime there is price fixing between two competitors, if one choose to do so, it should be above his marginal cost and not beyond the other competitor's marginal cost (price).
If a competitor decides to set prices in a price war between two rivals, the price shouldn't exceed the other competitor's marginal cost (price) and should be higher than the other competitor's marginal cost (price). Given that there will be a $10 charge for price fixing (previous cartel price). The best price would then be below the competitor's price and above his marginal cost in order to maximize profit.
Thus, $2.33—above his marginal cost and below competitor price—would be the best price to maximize earnings. Since, a fine will be imposed for price fixing. The best price would then be below the competitor's price and above his marginal cost in order to maximize profit.
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the terms direct cost and indirect cost are commonly used in accounting. a particular cost might be considered a direct cost of a manufacturing department but an indirect cost of the product produced in the manufacturing department. classifying a cost as either direct or indirect depends upon a. the behavior of the cost in response to volume changes. b. whether the cost is expensed in the period in which it is incurred. c. the cost object to which the cost is being related. d. whether an expenditure is unavoidable because it cannot be changed regardless of any action taken.
The distinction between direct and indirect costs.Indirect is dependent on the relationship to the price item. Whether the price can be connected.
It is unwaveringly direct to the cost object.Instead, if it cannot be linked to the Cost is an indirect object.If a cost is variable or fixed.Incorrect. Direct expenses may be fixed or Variable.If the expense can be tracked easily.Use the cost object. Correct.The cost’s actions in response to Volume alterations Incorrect. This is a determinant.Costs (or fixed that fluctuates with relevant Range)Whether the expense is recorded as aThe time when it is incurred. Incorrect.While indirect costs cannot be as easily attributed to any unit of measurement, direct costs may be easily related to a specific cost unit.For certain goods or units, direct costs are incurred. In other words, it might be prevented if certain procedures weren’t performed. The price of raw materials is one instance.Provide numerous benefits at direct cost to support operation and output. Even without an active procedure, it can still be incurred.
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