Answer:
Acquisition price for 30% share $3,000,000
($36,000 / $120,000 * 100)
Add: Net income $180,000
($600,000 * 30%)
Less: dividend ($108,000)
($360,000 * 30%)
Less: excess depreciation <u>-($45,000)</u>
($1,200,000 / 8 yrs*30%)
Investment reported in Balance <u>$3,027,000</u>
Sheet 2018
Answer: A. Separate costs into fixed and variable categories.
Explanation: The contribution income statement separates variable and fixed costs in an effect to show the amount of revenues left over after variable costs are paid, that is, it lists variable costs (costs that do not remain consistent) and fixed costs (costs that are constant whatever the amount of goods produced) in order to calculate the contribution margin of the company. It is also known as the contribution margin income statement. As opposed to the traditional income statement which separates product costs from period costs, it separates variable costs from fixed costs and is applied to determining net profit or loss for the period.
Answer:
either the selling price decreases or the total output decreases
Explanation:
The firm's income statement:
total sales revenue = $120,000
minus total variable costs = ($72,000)
<u>minus total fixed costs = ($15,000) </u>
net profit = $33,000
The long run equilibrium for a monopolistically competitive firm occurs when the firm is making no economic profit since it is charging a price = average total cost.
In this case the average total cost per unit = $6 per unit + ($15,000 / 12,000 units) = $7.25 per unit
Since the firm is currently charging a higher selling price than average total cost ($10 > $7.25), one or two things might happen in the long run:
- selling price will decrease
- output will decrease
Answer:
Yes they can continue advert but only if the 1% is equivalent or greater than the 10$ spent on advert.
Explanation:
There is an increase in revenue by 1%, this indicates that a number of people were attracted to the product because of the advert. With this the company might do better with consistent advert in subsequent year. They can change the channel of advert, improve on the quality of advert or change the time and location of the advert. Infarct, the 1% increment in revenue can be up to 20$ since we are not sure of the exact company's revenue. But if the 1% is far lower than the amount spent, the company can seek advice from professionals.
