BUSINESS COLLEGE

Gabby Company sells a product for $ 100 per unit. Variable costs are $ 60 per unit, and fixed costs are $ 2 comma 500 per month. The company expects to sell 600 units in September. Calculate the contribution margin per unit, in total, and as a ratio.

Answers

Answer 1

Answer:

Answer:

(a) $40

(b) $24,000

Explanation:

Given that,

Selling price = $100 per unit

Variable costs = $60 per unit

Fixed costs = $2,500 per month

Contribution margin per unit:

= Selling price - Variable costs

= $100 per unit - $60 per unit

= $40

Total Contribution margin:

= Contribution margin per unit × No. of units sold

= $40 × 600 units

= $24,000

Contribution margin ratio:

= (Selling price - Variable costs) ÷ Selling price

= ($100 per unit - $60 per unit) ÷ $100 per unit

= 0.4 or 40 %

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Please match each description with the appropriate approach to federal finance. Policymakers should reduce spending and increase taxes when the economy is growing in order to prevent "overheating". _____This approach was considered conventional wisdom until the advent of the Great Depression. _____Policymakers should focus on keeping unemployment low and providing the people with the public goods and services they want. ____ If insisted upon, this approach would only worsen the economy during a recession. ____This approach ignores the impact of the budget on the business cycle. _____

Answers

Answer:. 1.cyclically balanced budget

2. annually balanced budget

3. functional finance

4. annually balanced budget

5. functional finance

Explanation:

policymakers should reduce spending and increase taxes when the economy is growing in order to prevent "overheating" ----Cyclically balanced budget

2. this approach was considered conventional wisdom until the advent of the great depression---Annually balanced budget

3. Policymakers should focus on keeping unemployment low and providing the people with the public goods and services they want.-----Functional finance

4. if insisted upon, would only worsen the economy during a recession--Annually balanced budget

5. ignores the impact of the budget on the business cycle.----functional finance

In the initial Cournot duopoly equilibrium, both firms have constant marginal costs, m, and no fixed costs, and there is a barrier to entry. Show what happens to the best-response function of firms if both firms now face a fixed cost of F Let market demand be p-a -bQ, where a and b are positive parameters with 2 firms. Let q1 and q2 be the amount produced by firm 1 and firm 2, respectively. Assuming it is optimal for the firm one to produce, its best-response function is I. (Properly format your expression using the tools in the palette. Hover over tools to see keyboard shortcuts. Eg., a subscript can be created with the- q1 = character.)

Answers

Answer:

The best response functions are given by

$q_1=(a-m)/(2b)-(q_2)/(2)$

$q_2=(a-m)/(2b)-(q_1)/(2)$

Explanation:

Under no fixed costs the total costs is

$CT_i= mq_i$

for i=1,2. The market demand is given by

$p=a-bQ$

where $Q=q_1+q_2$ is the total production

Firm 1 and 2 will maximize its own profits. Since this firms are symmetric the problems are too

$max\,\Pi_1=p=(a-b(q_1+q_2))q_1-mq_1$

The first order conditions (take derivative of the profit with respect to $q_1$ are given by

$a-2 b q_1-b q_2-m=0$

Then the best-response function for Firm 1 will be

$q_1=(a-m)/(2b)-(q_2)/(2)$

and the solution for Firm 2 would be the symmetric

$q_2=(a-m)/(2b)-(q_1)/(2)$

Now we can add fixed costs, so total costs now look

$CT_i= F+mq_i$ for i=1,2

the profit maximization problem for firm 1 looks now

$max\,\Pi_1=p=(a-b(q_1+q_2))q_1-F-mq_1$

The first order conditions are given by

$a-2 b q_1-b q_2-m=0$

note that this equation is the same as in the absence of Fixed Costs. So the solutions would be the same. Fixed costs don't change the optimal level of production of these firms.

Note that Total Costs are given by fixed costs (F) and marginal costs (m) that depend on the production level of the firm

$CT_i=F+mq_i$

for i=1,2. The market demand is given by

$p=a-bQ$

where $Q=q_1+q_2$ is the total production, so it's the sum of each firms production

Firm 1 will maximize it's own profits

$max\,\Pi_1=p=(a-b(q_1+q_2))q_1-F-mq_1$

The first order conditions (take derivative of the profit with respect to $q_1$ are given by

$a-2 b q_1-b q_2-m=0$

Then the best-response function for Firm 1 will be

$q_1=(a-m)/(2b)-(q_2)/(2)$

and the solution for Firm 2 would be symmetric.

Note that only marginal costs are relevant for getting the best-response function, so adding fixed costs (F) don't change the results

Explanation:

On December 31, 2015, Waterway Industries is in financial difficulty and cannot pay a note due that day. It is a $2900000 note with $290000 accrued interest payable to Carla Vista, Inc. Carla Vista agrees to accept from Waterway equipment that has a fair value of $1440000, an original cost of $2400000, and accumulated depreciation of $1160000. Carla Vista also forgives the accrued interest, extends the maturity date to December 31, 2018, reduces the face amount of the note to $1230000, and reduces the interest rate to 5%, with interest payable at the end of each year.Nolte should recognize a gain or loss on the transfer of the equipment of

a. $0.

b. $120,000 gain.

c. $180,000 gain.

d. $570,000 loss.

Nolte should recognize a gain on the partial settlement and restructure of the debt of

a. $0.

b. $45,000.

c. $165,000.

d. $225,000.

Answers

Answer:

(a) $210,000

(b) $351,500

Explanation:

(a) Given that,

Fair value of equipment = $1,440,000

Face Amount of the note = $1,230,000

Gain on sale:

= Fair value of equipment - Face Amount of the note

= $1,440,000 - $1,230,000

= $210,000

(b) Given that,

Accrued Interest Payable = $290,000

Interest rate = 5%

Gain on the partial settlement and restructure of the debt:

= Accrued Interest Payable + (Face amount of note × Interest rate)

= $290,000 + ($1,230,000 × 5%)

= $290,000 + $61,500

= $351,500

VLC Corporation sold merchandise with a cost of $200 on account for $300 to PRT Corporation; credit terms were 2 / 10, n / 30. VLC paid the outgoing freight charge of $10. PRT paid the invoice within the discount period.The entries in VLC's accounting information system to record all the preceding events will include all of the following except: A. A debit to cost of goods sold
B. A debit to delivery expense
C. A credit togross profit
D. A credit to inventory

Answers

Answer:

The entries in VLC's accounting information system to record all the preceding events will include all of the following except:

C. A credit togross profit

Explanation:

An entry to Gross Profit does not exist because the gross profit it's the result of the total sales minus the Cost of Goods, so the Gross Profit it's a result and not a journal entry.

The other entries are used as follows:

A. A debit to cost of goods sold

D. A credit to inventory

B. A debit to delivery expense

A credit to Cash

Following is a recent BusinessSoftware Corp. press release: REDMOND, Wash.—March 16, 2016 — BusinessSoftware Corp. today announced that its board of directors have declared a quarterly dividend of $0.18 per share. The dividend will be payable on June 9, 2016, to shareholders of record on May 19, 2016. The ex-dividend date will be May 17, 2016 Prepare the journal entries BusinessSoftware Corp. used to record the declaration and payment of the cash dividend for its 8,600 million shares.

Answers

Answer:

Explanation:

1. The journal entry for declaration of dividend is shown below:

Retained Earnings A/c Dr

= (8,600 million shares × $0.18 per share) = $1,548 million

To Dividend payable in cash $1,548 million

(Being dividend is declared)

2. No journal entry should be passed on the record date

3. The journal entry for payment of the cash dividend is shown below:

Cash dividend payable A/c Dr $1,548 million

To Cash $1,5480 million

(Being payment is made for cash dividend)

Final answer:

The journal entries made by BusinessSoftware Corp. to record the declaration and payment of the cash dividend for its 8,600 million shares involve debiting retained earnings and crediting dividends payable on the declaration date, and debiting dividends payable and crediting cash on the payment date.

Explanation:

The journal entries made by BusinessSoftware Corp. to record the declaration and payment of the cash dividend for its 8,600 million shares would be as follows:

Declaration Date:
Retained Earnings DR $1,548,000 (8,600 million shares x $0.18 per share)
Dividends Payable CR $1,548,000
Payment Date:
Dividends Payable DR $1,548,000
Cash CR $1,548,000

Learn more about Journal entries here:

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How does the government pay for roads schools and emergency services?

Answers

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Final answer:

The government pays for roads, schools, and emergency services through the collection of taxes on income, property, and sales. The money is then allocated in the budget for various public services. Both federal and state governments contribute to these expenses, with an important chunk of it going towards education.

Explanation:

The government pays for public goods such as roads, schools, and emergency services through the collection of taxes and drafting budgets. These taxes can be imposed on income, property, and sales. The revenue raised is then allocated for various public services. For example, on a local level, funds are allotted for education, police, and fire departments. State governments allocate money for state colleges and universities, and maintenance of state roads and bridges. On the national level, money goes to things such as defense, Social Security, and maintenance of federal courts.

Figure 1.2 highlights the importance of these services, by showing a fire department ambulance rushing to help, paid for by the government through the tax base. The aim is to assure that everyone makes a contribution and to prevent free riders, hence taxes are often enforced through law. It is worth noting that while federal government spending often gets the majority of attention, state and local government spending is also substantial, with a significant proportion going toward education.

Local governments, just like state governments, receive revenue from grants and transfers from other levels of the government with property tax collections being another primary source. Essentially, the government ensures that public goods and services are funded by managing taxpayers' money and allocating it where it's most needed.