He should stay open because shutting down would be more expensive as descibed below
<u>Explanation:</u>
It should be OPTION C-stay open because shutting down would be more expensive.
It cannot be option one. Shut down point is that where the variable cost is equal to the total revenue. But here the total revenue is more than the variable cost.
It cannot be option two. If the firm exit the industry, there will not be any revenue and variable cost but the total fixed cost will a loss. Hence, the firm should continue to produce.
It cannot be option four. There is not at all any economic profit. Rather there is an economic loss of 60000.
Hence, the answer will be option three. He should stay open because shutting down would be more expensive.
Answer:
Forecast exchange rate = $2.29(Approx)
Explanation:
Given:
Exchange rate = $1.95
Inflation rate difference = 2.6% - 20% = 17.4%
Computation:
Forecast exchange rate = 1.95 / (1-17.4%)
Forecast exchange rate = $2.29(Approx)
Answer:
Vertical accountability refers to the ability of
a. individuals and groups to hold state institutions accountable
Explanation:
When discussing accountability in governance, there are different types which include vertical accountability and horizontal accountability.
Vertical accountability refers to the ability of individuals and groups to hold state institutions accountable and horizontal accountability refers to the ability of the legislature to hold the executive accountable.
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:
Break Even Point
In Units = 2,000 units
In value = $80,000
Explanation:
Break even Point = 
When we use contribution per unit, we get the break even point in units sales.
When we use the contribution margin as a percentage of sales we get break even sales in value.
Contribution per unit = $20
Contribution margin in percentage = $20/$40 = 50%
Therefore, Break even Point in units = 
Break even units = 2,000
Break Even Point in value = 
Sales to be made in value at break even = $80,000
