Answer:
a. According to the company's accounting system, what is the net operating income earned by product D14E? (Net losses should be indicated by a minus sign.)
b. What would be the financial advantage (disadvantage) of dropping product D14E? Should the product be dropped?
- financial disadvantage of discontinuing the produce is -$68,000, so the company should not discontinue the product since its losses would increase
Explanation:
total sales $670,000
- variable expenses $295,000
- fixed manufacturing expenses $246,000
- fixed selling and administrative expenses $194,000
net loss = $65,000
if product D14E is discontinued, $196,000 + $111,000 = $307,000, of fixed expenses can be avoided, but $133,000 are not avoidable. if the company discontinues the product, its losses will increase by $133,000 - $65,000 = $68,000
Answer:
Dr interest expense $7,000
Dr notes payable $7,238
Cr cash $14,238
Explanation:
The first task is to compute interest expense on the loan in year 1 which is shown below:
interest expense=$100,000*7%
interest expense=$7,000
Principal repayment=repayment-interest repayment
Principal repayment=$14,238-$7,000=$7,238
The double entries are to debit interest expense and notes payable with $7,000 and $7,238 respectively while cash is credited with $14,238 as an outflow of cash.
Answer / Explanation:
To properly answer this question, we will first define some key terms which includes:
Surplus: This can be refereed to as an amount exceeding a particular requirement after it has been met.
Demand: This can be refereed to as the quantity of goods and serves a consumer or an individual is willing and pay for per time.
Now that we understand the basic concept above, we now refer back to the narrative of the question to try and answer t hem.
(a) With Provider A, the cost of an extra minute is $0. With Provider B, the cost of an extra minute is $1.
(b) With Provider A, my friend will purchase 150 minutes [= 150 – (50)(0)]. With Provider B, my friend would purchase 100 minutes [= 150 – (50)(1)].
(c) With Provider A, she would pay $120. With Provider B, he would pay $100.
(d) The figure below shows the friend’s demand. With Provider A, she buys 150 minutes and her consumer surplus is equal to (1/2)(3)(150) – 120 = 105. With Provider B, her consumer surplus is equal to (1/2)(2)(100) = 100
(e) I would recommend Provider A because she receives greater consumer surplus when buying from that provider.
Answer:
The correct answer is c. competition from DuPont
Explanation:
