Define what liquidity means by completing the following sentence. Liquidity refers to an asset which can be readily used to pay
1 answer:
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Answer:
The offer shall be accepted.
Explanation:
Provided details, we have
Monthly capacity of production = 10,000 widgets
Actual production = 9,000 units
Where average cost per unit = $5
therefore total cost = 9,000 $5 = $45,000
Fixed cost = $18,000
Variable cost = $45,000 - $18,000 = $27,000
Variable cost per unit = $27,000/9,000 = $3 per unit.
Now even if additional 1,000 units will be produced the cost will increase by 1,000 $3 = $3,000.
No additional fixed cost will be incurred.
Since buying price is $4 per unit, thus,
Increase in revenue from such sale = $4 - $3 = $1 per unit for 1,000 units = $1,000.
Thus, the offer shall be accepted.
Answer:
Cost of Goods Sold = $1,700,000
Gross Proft = $1,740,000
Explanation:
We solve this assingemtn using the inventory identity:
We post the given and solve for the missing part:
640,000 + 2,020,000 = 960,000 + COGS
COGS = 640,000 + 2,020,000 - 960,000 = 1,700,000
Next we use the COGS value to calculate the gross profit.
3,440,000 - 1,700,000 = 1,740,000