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ANTONII [103]
2 years ago
10

Anne Teek works full time as the manager of her used furniture store in which she has invested $40,000. Last year, her total rev

enues were $90,000 and her costs were $60,000 for merchandise, gas, electricity, and other explicit-cost items. Ms. Teek pays herself a "competitive" salary of $30,000 per year. An economist would consider her profits for the year to be
Business
1 answer:
jasenka [17]2 years ago
4 0

Answer:

C. $0 minus the opportunity cost of the $40,000 of capital invested in the store.

Explanation:

Data provided in the question

Invested amount for furniture = $40,000

Total revenues = $90,000

Miscelleanous Cost = $60,000

Competitive salary = $30,000

Based on the above information, the profits for the year is $0 that should be less the opportunity cost i.e $40,000 that represents the capital invested in the store and the same is to be considered

Hence, the correct option is c.

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A division has the following data: Sales $320,000, Variable costs $200,000, and Fixed costs $140,000. If the division were elimi
pashok25 [27]

Answer:

Effect on income= $120,000 loss

Explanation:

Giving the following information:

Sales $320,000

Variable costs $200,000

Fixed costs $140,000.

None of the fixed costs are avoidable. Therefore, they shouldn't be taken into account to make the decision.

Effect on income= Sales - varaible cost

Effect on income= 320,000 - 200,000= $120,000 loss

4 0
2 years ago
The Mass Rapid Transit (MRT) System in Hong Kong has been running significant losses. Transport Ministry officials have argued o
Aleonysh [2.5K]

Answer:

A) -0.55

B) The  negativity in the estimated elasticity suggests that for every 1% increase in the price of transport there will be a corresponding 0.55% decrease in  the number of Commuters

Explanation:

Given data:

current fare (P0) = $4

hiked fare (P1)  = $6

change in fare = $2

number of rides before increase ( Q0 ) = 10000

number of rides after increase ( Q1 ) = 8000

change in rides = 2000

A) The estimated elasticity of demand for MRT rides using the midpoint /ARC method

Mid point method = [ ( Q1 - Q0 ) / ( Q1 + Q0 ) ] / [ (P1 - P0 ) / (P1 + P0 ) ]

                              = [ - 2000 / 18000 ]  / [ 2 / 10 ]

                              = - 1000 / 1800 =  - 5 / 9 ( estimated elasticity )

= - 0.55

B) The  negativity in the estimated elasticity suggests that for every 1% increase in the price of transport there will be a corresponding 0.55% decrease in Commuters

4 0
2 years ago
Bob's lawn-mowing service is a profit-maximizing, competitive firm. Bob mows lawns for $30 each. His total cost each day is $320
Fudgin [204]

Answer:

In the short run, as long as the contribution margin is positive he should continue in the industry. In the long run, if the company keeps losing money, he should leave the industry.

Explanation:

Giving the following information:

Bob mows lawns for $30 each. His total cost each day is $320, of which $70 is a fixed cost. He mows 10 lawns a day.

First, we need to calculate the unitary variable cost:

Total variable cost= 320 - 70= 250

Unitary varaible cost= 250/10= $25

Contribution margin= 30 - 25= $5

In the short run, as long as the contribution margin is positive he should continue in the industry. In the long run, if the company keeps losing money, he should leave the industry.

6 0
2 years ago
Denmark Corporation's variance report for the purchasing department reports 1,000 units of material A purchased and 2,400 units
Nadusha1986 [10]

Answer:

Total material price variance= $380 favorable

Explanation:

Giving the following information:

Material A:

Purchase= 1,000 units

Purchase price= $2.1

Standard price= $2

Material B:

Purchase= 2,400 units

Purchase price= $2.8

Standard price= $3

<u>To calculate the total material price variance, we need to use the following formula on each material:</u>

<u></u>

Direct material price variance= (standard price - actual price)*actual quantity

<u>Material A:</u>

Direct material price variance= (2 -2.1)*1,000

Direct material price variance= $100 unfavorable

<u>Material B:</u>

Direct material price variance= (3 - 2.8)*2,400

Direct material price variance= $480 favorable

Total material price variance= -100 + 480

Total material price variance= $380 favorable

3 0
2 years ago
Zippy is earning ​$30 comma 000 per year working for​ Joe's Car Repair. He also has savings of ​$150 comma 000​, on which he is
shepuryov [24]

Answer: $105,000

Explanation: In Economics the term profit refers to the amount a company or an individual left with after paying for implicit and explicit cost. Explicit cost means cost paid to others for their services.

While, Implicit cost or opportunity cost is the cost of loosing profits due to choosing one alternative over other. In this case Zippy's salary and his interest on savings is his implicit cost.

therefore,

Economic profit = $250,000 - ( $30,000 + $15,000 + $100,000 )

                          =  $105,000

8 0
2 years ago
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