Answer:
Option (B) is correct.
Explanation:
The utility maximization point for a consumer is as follows:
It is given that,
price of Pepsi(x) = $1 per can
price of a hamburger(y) = $2
Marginal utility from Pepsi = 4
Marginal utility from hamburgers = 6
Hence,
4 > 3
Therefore, it can be seen that the consumer's utility is not maximized at this point.
Law of diminishing marginal utility states that as the consumer consumes more and more quantity of goods then as a result the utility obtained from the consumption goes on diminishing.
So, there is a need to increase the quantity of Pepsi consumed and reducing the quantity of hamburgers consumed.
Answer:
The answer is B.
Explanation:
FIFO inventory cost method will yield the highest taxable income during times of inflation or period of rising price.
FIFO is First in First out i.e the inventory that was purchase first will go out first. This method reflects the current market price because last inventories bought during inflation are part of the ending inventories. Ending inventories are high, cost of sales are low and gross profit is high.
Because gross profit is high, high tax will be charged
Answer:
$50,000
Explanation:
To calculate the amount of cash that the company received from selling common stock during the year 2 we can use the following formula:
cash received = (common stock year 2 - common stock year 1) + (paid in capital in excess of par year 2 - paid in capital in excess of par year 1) =
cash received = ($110,000 - $100,000) + ($90,000 - $50,000) = $10,000 + $40,000 = $50,000
Answer:
a. $21,800
Explanation:
The discoun of issuance of the bond is amortized over the period until maturity. Total Interest expesne on a discounted bond is the sum of the coupon payment and the amortization of the discount amount.
Coupon payment = $200,000 x 10% = $20,000 per year
Discount on the bond = $200,000 - $191,000 = $9,000
Discount amotized per year = $9,000 / 5 = $1,800
Total Interest Expense = Coupon Payment + Amortization of Discount
Total Interest Expense = 20,000 + 1800 = $21,800
Answer:
137,000
Explanation:
Jan Feb March
Units produced 94000 80000
Raw materials 26,000
Raw materials 213800 239800 295800
Ratio of raw material to a product is 2:1
Ending inventory = 30% of next month production
Represent budgeted production in February by F
239800=2F + (80000*2*30%)-(2F*30%)
239800 = 2F +48000 =0.6F
239800-48000=2F-0.6F
191800=1.4F
F= 191800/1.4 =137000
