Answer:
b. During the 1900s government became involved in day-to-day business activities regularly to limit the free-market system.
Explanation:
The doctrine stipulated that the buyers of goods and services should be careful of the market system and be smart about what they intended to purchase in the market. However, it didn't include the involvement of the government to control and regulate the market system. Therefore, the false option is option b.
Show your understanding of interest by completing the following sentence: Interest is the amount of money (earned, owed) by the owner of an asset and (paid, earned) by the borrower of the asset for its use.
Answer:
Interest is the amount of money earned by the owner of an asset and paid by the borrower of the asset for it's use.
Explanation:
For example I am the owner of an asset which is cash and I lend out the cash to a borrower for a 7% interest. Now I as the owner of the asset will earn this 7% interest because I let someone else use my asset and they owe me this money, whereas on the other hand the borrower will pay me an interest for using my asset.
Suppose your favorite sports team is losing by an insurmountable score. What does the shutdown condition suggest the team should do
Answer and explanation:
In Economics, the shutdown conditions refer to the situation in which a company is not able to produce profits to at least cover the variable costs of production in the short term. According to this approach, only when those costs can be covered the company should continue to operate. Otherwise, the firm must shutdown.
In that case, if a team is losing by a score that cannot be surmountable, according to the shutdown condition the team must stop playing the game.
Hobby Farms, Inc., owns rural property that it leases to various tenants,including Ira. Ira’s transfer of his entire interest in the leased property to aJason isa.an assignment.b.an eviction.c.a right of entry.d.a sublease
Answer:
D (sublease)
Explanation:
Sublease is the agreement in which the tenant (sublandlord) gives the right to take over or use the property to a new tenant. But sublandlord needs to get the consent of owner first before subleasing it to a new tenant. Also, still in this situation the owner holds sub landlord responsible for that property. Rent will be paid to sublandlord which then pays it to the owner.
Identify the stage in the forming-storming-norming-performing model in which a team meets to learn about a project, agrees on basic goals, and begins to work on project tasks.
a. Storming
b. Norming
c. Forming
d. Performing
Answer:
c. Forming Stage
Explanation:
Forming Stage -
It is the very first stage in the group development.
In this initial stage , the people tries to learn about the task , and get along each other , to understand and start to work together .
This stage may even invite certain conflicts and misunderstanding .
In this stage a basic goal and work allotment is done , all the strategies and works are started in this very stage .
Hence , from the information of the question,
The correct term is forming stage.
Loggers are much_______- likely to supply wood to the market if property rights are not enforced.In the presence Of market failures, public policy can improve economic efficiency. Classify the source of market failure in each case listed. A person smoking in a restaurant emits second-hand smoke that harms other restaurant patrons.a. Market Power b. Externality A single grocery store is the only source of food in a small town, giving the store the ability to influence the price of food. a. Market Power b. Externality
Answer:
less;
A person smoking in a restaurant emits second-hand smoke that harms other restaurant patrons. b. Externality
A single grocery store is the only source of food in a small town, giving the store the ability to influence the price of food. a. Market power
Explanation:
Property rights are usually imposed on individuals who are able to control the resources which are of public value. When the society gets affected by the practices of those individuals or entities, property rights made by a government or regulatory body come into the picture. Therefore, those individuals need to be regulated and incentivized by property rights, or they will be less likely to conform to the market needs.
These rights protect the market from market failures, which is their main purpose.
The most common types of market failures include externalities and market power. The first example is an externality as the unwanted smoke represents the cost (or benefit) which cannot be influenced by a specific party.
The other example is typical market power, as the monopolist (grocery store) can control the price of goods, which is an essential market determinant.
The person smoking in a restaurant causing harm to others through second-hand smoke exemplifies an 'externality' as other individuals, not involved in the action, are affected. The case of a single grocery store being the only food source in a town and thus being able to influence the price of food is an example of 'market power', where a single entity determines the price or quantity of a commodity.
Explanation:In context of economic theory, the given scenarios classify two distinct forms of market failures: externality and market power.
The first scenario, where a person smoking in a restaurant creates second-hand smoke affecting other patrons, is an example of an externality. Externalities are costs or benefits that affect a third party not directly involved in the transaction. Here, the third parties (other restaurant patrons) are negatively affected by the smoker's actions, thus creating a negative externality.
In the second case, a single grocery store monopolizing food supply in a small town, indicates market power. Market power refers to the ability of a firm to control the market price or quantity of a good or service. In this scenario, the single grocery store has the power to influence the price of food, a characteristic of market power.
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Central banks are responsible for the collection and the replacement of currency from circulation.
A. True
B. False
Answer:
The correct answer is letter "A": True.
Explanation:
Central banks are the financial institutions in charge of the monetary policy of their country on behalf of the central government. They regulate the money supply and the interest rates to maintain a country's economy the closest to its equilibrium level. In the United States, the central bank is the Federal Reserve (Fed). Central banks also collect and replace the currency in circulation.
The development of package design, trademarks, warranties, and service policies is associated with the _____ element of the marketing mix.
Answer:
The correct answer is letter "A": product.
Explanation:
The marketing mix is a strategic analysis of the internal factors of a company and developed especially to firms. (Four) are the variables considered for a business: product, price, place, and promotion. The product involves the good or service the organization intends to offer and all the quality and legal implications.
What is the value of a preferred stock that pays a perpetual dividend of $150 at the end of each year when the interest rate is 7 percent
Answer:
$2,143
Explanation:
The computation of the value of the preferred stock is shown below:
Value of the preferred stock = Cash flows with respect to perpetual dividend ÷ the rate of interest
= $150 ÷ 0.07
= $2,143
Simply we divided the rate of the interest by the cash flows so that the accurate value of the preferred stock can be computed
The Loann Le Milling Company is going to purchase a new piece of testing equipment for $28,000 and a new machine for $53,000. The equipment falls in the three-year property class, and the machine is in the five-year class.
What annual depreciation will the company be able to take on the two assets?
Answer:
Equipment = 33.33% (1/3)
Machine = 20.00% (1/5)
Explanation:
Final answer:
The Loann Le Milling Company can take an annual depreciation of $9,333.33 on the testing equipment and $10,600 on the machine.
Explanation:
The annual depreciation on an asset is calculated using the straight-line depreciation method, which involves dividing the cost of the asset by its useful life. The testing equipment has a cost of $28,000 and falls in the three-year property class, so the annual depreciation can be calculated as $28,000 / 3 = $9,333.33. The machine has a cost of $53,000 and falls in the five-year property class, so the annual depreciation can be calculated as $53,000 / 5 = $10,600.
Your uncle has $1,200,000 and wants to retire. He expects to live for another 25 years, and he also expects to earn 7% on his invested funds. How much could he withdraw at the beginning of each of the next 25 years and end up with zero in the account? a. $84,703.56 b. $82,162.46 c. $96,236.09 d. $105,032.42 e. $77,080.24
Answer:
C) $96,236.09
Explanation:
To solve this problem, we will use the Present Value of an annuity due formula. The annuity is due because the withdrawals are made at the beginning of each period.
The formula is:
[tex]P = A (1-(1+i)^{-n} / i)*(1+i)[/tex]
Where:
P = Present value of the annuity
A = Value of each annuity payment
i = Interest rate
n = number of periods
Now, we simply plug the amounts into the formula:
[tex]1,200,000 = A (1-(1+0.07)^{-25} /0.07)*(1+0.07)\\1,200,000 = A (12.469334)\\1,200,000/12.469334 = A\\96,236.09 = A[/tex]
Buy a new calculator for 400. Leave it in the original wrapping for six years. Sell it to a finance nerd for 600 at that point. What is your rate of return?
Answer:
7% per year
Explanation:
The amount invested in the calculator was $400. The future value after six years is $600. That rate of return that results in this investment is determined by:
[tex]FV = PV*(1+r)^t\\600=400*(1+r)^6\\1+r = \sqrt[6]{1.5}\\r=0.07 = 7\%[/tex]
The rate of return on the invest is roughly 7% per year.
During the 1970s and 1980s, formal project management practices were put in place because the constraints were _____ and _____ boundaries had to be crossed
During the 1970s and 1980s, formal project management practices were put in place because the constraints were Tight and Several boundaries had to be crossed
Explanation:
Management of the project consists of expertise, experience, strategies and techniques. The 1970s and 1980s brought more published data about the management of programs into the hands of the public.
In the 1970s and 1980s, further empirical research were generated on project management and ideas, processes, and guidelines were developed. The potential benefits of formal project management were seen, for example, and standards began to be adopted.
The most crucial test used to determine if something is a fixture is the manner in which it is affixed to the real estate.A. TrueB. False
Answer:
A.True
Explanation:
A fixture refers to something which is fixed or attached to a property such as a building built on a piece of land shall be construed as a fixture with respect to the land.
To determine as to what shall be considered a fixture relates to the purpose for which something is attached to the asset.
The "manner" of attachment refers to if the attachment is of permanently or temporarily fixed. If something is permanently fixed and requires specific tools for it's removal, such an attachment is usually considered a fixture.
Hence the given statement is true.
Identify two characteristics of utilitarianism, two characteristics of virtue ethics, and two characteristics of deontology. Write one complete sentence for each characteristic identified.
Then, take the position that Starbucks is guided by utilitarianism and analyze how the notion of the moral good in utilitarianism leads to a unique approach to ethical problems. The way to do this is as follows:
First, present an ethical problem confronted by Starbucks.
Then, apply the characteristics of utilitarianism that you identified for this discussion in the attempt to solve this problem.
After this, analyze how the notion of the moral good present in utilitarianism, and the characteristics that you identified in particular, shape the approach to solving this problem..
Answer:
Explanation:
One claim of unethical practice done by Starbucks is that they do not give a chance for small coffee-shops and try to cease them out by acquairing them or competing aggressively. However in the case of buying the coffeeshops they evaluate the price of the shop generously.
In terms of utilitarianism, the action of buying out small shops through generous offer is considered not unethical, because if Starbucks sets up their business nearby the small shop, it will most likely suffer and by purchasing them it is actually a favor for coffeeshops.
The characteristics of utilitarianism is:
The end result of an action should be the most positive outcome for all the parties concerned
The action that leads to the end result is not as important as the result itself
Even though discussed issue is ethical in temrs of utilitarianism view, it is unethical in terms of deontology. Starbucks is causing the shut down of the local business and also discouraging its growth.
The characteristics of deontological ethics is :
The action is the most important focus of the ethical consideration
The result may not be the best but the entity/person in charge should take an ethical action
The third part is the virtue ethics. As per the virtue ethics, we cannot say that the action is ethical. This is not the only blame that Starbucks faces. They face allegation of exploiting coffee farmers, damaging the environment and mistreating their employees.
The characteristics of virtue ethics is
The moral value of the person/organization is more important than action or the result
Even if the action is unethical or the result is unethical, the moral of the person/company can still be correct.
Final answer:
Utilitarianism, Virtue Ethics, and Deontology characteristics explained in the context of Starbucks' ethical decision-making.
Explanation:
Utilitarianism assesses the moral worth of an action based on its consequences, specifically aiming for the greatest good for the greatest number.
Utilitarianism
Consequentialist: Considers outcomes to determine morality.Greatest Good: Focuses on actions that result in the greatest good for the greatest number.Virtue Ethics
Character-Centered: Emphasizes that right action stems from cultivating good character traits.Self-Perfection: Involves the development of virtues to become a good person.Deontology
Duty-Based: Centers on obligations and rules to guide actions.Absolute Duties: Defines actions as right or wrong based on adherence to moral rules.Analysis: Starbucks, guided by utilitarianism, would prioritize decisions that maximize overall happiness and well-being for the majority when faced with an ethical dilemma. This approach shapes Starbucks' actions by emphasizing the importance of considering consequences and aiming for the greatest benefit to society.
(A) Suppose there exists a market for coffee that is in equilibrium at 500 cups brewed per week for $3/cup. Now suppose the demand for coffee shifts outward (to the right). What are some reasons this shift might have occurred?
(B) Now suppose that after the demand curve shifted, the supply curve shifts inward (to the left). What are some reasons this might have occurred?
(C) Now that both the demand and the supply curves have shifted, compare the new equilibrium to the original equilibrium of 500 cups for $3 each. Are the new equilibrium price and quantity greater than, less than, or equal to the original equilibrium? Do you have enough information to know for sure?
Answer:
Explanation:
A ) Demand for coffee may increase due to many reasons , like due to decrease in price ( due to price effect ) , increase in price of tea ( due to substitution effect) , due to seasonal change like in the cold season , its demand increases.
B) Supply of coffee may increase due to rise in its price , due to more company coming into market , technological improvement in plant and machinery etc.
C ) The new equilibrium price may be equal to , less than or greater than $3 each . If shift in both the lines have same magnitude , price remains stagnant . If shift in supply line is more , price decreases. If shift in demand curve is more , price increases.
The AFL represented: a. A Knights of Labor committee that handled the strategic planning duties and a group that supported the basic philosophy of the IWW. b. A group that supported the basic philosophy of the IWW. c. One big union that eliminated the identity of unions joining the AFL. d. A Knights of Labor committee that handled the strategic planning duties. e. A federation or service organization that unions could join and still retain their separate identities and collective bargaining concerns.
Answer:
OPTION (e) is the right answer.
Explanation:
AFL is been expressed as a federation or service organization that unions could join and still retain their separate identities and collective bargaining firms. Because the organization did not strive to organize untrained laborers, they made few profits among new laborers around the year 1920, meanwhile, the increase of the economy took place during mass productions such as rubber, automobiles, chemicals, as well as services.
Which of the following is not one of the activities found on the statement of cash flows?
a. administrative activities
b. financing activities
c. investing activities
d. operating activities
Answer:
option A
Explanation:
Throughout financial accounting, the cash flow statement, also recognized as a cash flow statement, is indeed refers to a financial statement demonstrating how adjustments throughout balance sheet balances and sales impact cash balances and splits the report in grouping of Operating activities, financing activities and investing activities.
Particularly, the cash flow report deals with cash flow into and out of the corporation. As an academic discipline, the cash flow statement is helpful in determining a corporation's brief-term competitiveness, especially the capacity to pay expenditures.
In hierarchical organizational structures, communication between employees tends to:
a)be very difficult to achieve at all.
b)occur across organizational functions.
c)be more "top-down."
d)be more "bottom-up."
Answer:
The correct answer is letter "C": be more "top-down".
Explanation:
Hierarchical organizations are vertical entities in which communication is given from one department to another according to the range employees have in the company. While being bureaucratic, these kinds of companies could have problems with speed in communication since one department cannot jump over another's hierarchy. This communication usually comes from the top (managers) to the bottom (regular employees) rank in the firm.
Answer:
C. Top down communication
Explanation:
Top-down communication literally is a method of issuing communication, instructions and information within a business using a hierarchical structure. Information from the highest-ranking officials within the company filter down to employees using the company's managerial structure.
The top-down approach relies on higher authority figures to determine larger goals that will filter down to the tasks of lower level employees. In comparison, the bottom-up style of communication features a decision-making process that gives the entire staff a voice in company goals.
According to the Porter (1996) article on Strategy, managers are so caught up in the race to make decisions on strategic fit, many do not understand the need for operational effectiveness.
a. True.
b. False.
Answer:
(b). False
Explanation:
In his article, Michael Porter discussed the co-existence of both strategy and operational effectiveness.
Operational effectiveness as per Porter refers to performing activities which are similar to rivals in a better way and outperforming the rivals.
Strategic fit refers to that strategy with which an organization aligns its resources and capabilities with that of the opportunities prevalent in the business environment.
As per Porter, managers get caught up in a bid to improve operational effectiveness that they overlook the importance of a strategy.
Thus, the given statement is false.
Ben has two options this weekend. He could work at his job and earn $10 per hour for three hours, or he could go to a concert for that three hours. A ticket for the event costs $30. What is the opportunity cost of the event? $
Answer:
The correct answer is: $60.
Explanation:
Opportunity Cost is what a person sacrifices when they choose one option over another. It is also defined as the revenue of the chosen option over the revenue of the option that was forgone. It represents what was left on the table for deciding taking one option over another.
In Ben's case, the opportunity cost of going to the event represents what he could have earned working for three hours ($10 x 3 = $30). However, as he will have to pay for the event, he will lose $30 for the event ticket. Then, the total opportunity cost of going to the event is:
$30 + $30 = $60
The opportunity cost of Ben attending the concert is $60, which includes the $30 for the concert ticket and the $30 he could have earned from working.
Explanation:In economics, the opportunity cost represents the alternative forgone to take another action. If Ben decides to attend the concert, he is giving up the opportunity to work and earn money. So, the total opportunity cost will include the cost of the concert ticket and the money he could have earned from working. Thus, for three hours, at a rate of $10 per hour, he could have earned $30. Therefore, the total opportunity cost is $60 ($30 for the concert ticket + $30 loss of earnings).
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Similar to other not-for-profits, government healthcare organizations are able to raise funds through equity investments and they are exempt from income taxes and property taxes.
true/false
Answer:
False
Explanation:
Non-profit organisation are exempted by the government from any sort of taxes to improve their operations and effectiveness. Government health organisation sometimes raise funds through equity investments, and any funds generated thought equity financing comes under tax bracket. In this regard, government healthcare organisations which raise funds by using equity financing are not exempted from income or property tax.
When Sue graduated from college, she got a job with a starting salary of $30,000. When Sue's sister Jan graduated five years later, her starting salary was $38,000. Jan likes to tease Sue about earning more than Sue did right out of college. Sue claims that she actually had a higher salary in real dollars. The Consumer Price Index rose 12 percent during the five years separating the sisters' graduations.
Therefore, we can conclude that:
a. Sue earned a higher real salary.
b. Jan earned a higher real salary.
c. both Sue and Jan earned the same real salary.
d. There isn't enough information to determine who earned the higher real salary.
Answer:
b. Jan earned a higher real salary.
Explanation:
The consumer price index rose 12 percent which means that with the same amount of money 5 years later you will be able to buy 12% less goods and services. Now in order to find who earned a higher real salary we will calculate how much higher was Jan's salary compared to SUE. If the difference in salary was more than 12% than Jan earned a higher real salary, if less than 12% then Sue earned a higher real salary and if =12% then both earned the same amount of real salary.
Difference in salary = 38,000-30,000=8,000
Percentage increase in salary = 8,000/30,000=0.266 =26.6%
Jan earned 26.6% more than Sue and the increase in the price index was 12% which means that Jan earned a higher real salary than Sue.
Jan earned a higher real salary than Sue.
Explanation:Sue claims that she had a higher salary in real dollars compared to Jan, despite Jan's higher starting salary. To determine which sister earned a higher real salary, we need to consider the effect of inflation during the five-year period. The Consumer Price Index (CPI) rose by 12 percent during this time. To calculate the real salary for each sister, we need to adjust their starting salaries for inflation using the formula:
Real Salary = Starting Salary / (1 + Inflation Rate)
For Sue, her real salary would be: $30,000 / (1 + 0.12) = $26,785.71.
For Jan, her real salary would be: $38,000 / (1 + 0.12) = $33,928.57.
Comparing the two real salaries, we can see that Jan actually earned a higher real salary than Sue.
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The vigor of IPR protection is highly related to a country's stage of ________.A) economic developmentB) cultural heterogeneityC) natural resource developmentD) standardization of patent regulations
Answer:
The correct answer is letter "A": economic development.
Explanation:
The Intellectual Property Rights (IPR) are the grants typically a government provides to individuals over their creations for a specific period. The provision promotes innovation within countries that have usually developed economies. These rights cover all tangible and intangible created within a territory and that could be subject to exploitation.
The move of retail banking to use ATMs after Citibank unveiled its first ATMs illustrates the use of information systems to achieve which business objective?
a. customer and supplier intimacy
b. improved decision making
c. survival
d. competitive advantage
e. improved efficiency
Answer:
The correct answer is letter "E": improved efficiency.
Explanation:
Among the many advantages that information has brought to the business world, improving corporations' efficiency is one of them. The ability of employees to implement technology to reduce costs or to improve the quality of the outcome determines how profitable a firm could be based on the type of product provided to consumers. At the same time, companies who want to achieve their goals are likely to imitate the successful practices of other firms to remain competitive.
Even if an objective is impossible to attain, it still meets the criteria of a good objective because it can motivate worker.
(A) True
(B) False
False, even if an objective is impossible to attain , it still meets the criteria of good objective because it motivate workers.
Explanation:
Goal and objectives are required for running a company properly. If the workers are motivated they will be able to increase the production as well as work hard to improve their performance. It will increase the output
Proper motivation increases the efficiency of the workers , it also increases the efficiency of the company, it also reduces the cost and also increase the overall productivity. Workers are also motivated if they are given reward for their work. The leader should keep in mind that he should motivate for that can be achieved if the goal are not not achieved the workers will be dishearten.
Farrell wants to retire in six years. To have sufficient assets to fund retirement, Farrell needs to accumulate an additional $400,000 between today and retirement. As his planner, you assume that inflation will average 5 percent. You are also confident that you can build a portfolio that will generate an 8 percent compounded annual after-tax return. What serial payment should Farrell invest at the end of the first year to fund this goal?
Answer:
$73,070.5
Explanation:
Inflation erodes the value of money. It makes more quantity of money to required to buy the same basket of food and services in the future.
With inflation, to calculate the the quantity of Dollars needed in n years time, we use the formula;
Inflated amount = h × (1 + f)^n
h= amount required today, f - inflation rate, n- number of years
So if Farrell needs $400,000 in 6 years time in real terms, with an inflation of 5% per year, he would need to have a quantity of money equal to
1.05^6 × 400,000 = $536,038.3.
To provide for $536,038.3 in 6 years time, he would need to contribute into a sinking fund on a yearly basis, an equal amount denoted as "A" in the formula below:
FV = A × ((1+r)^n - 1)/r
FV - 536,038.3, r - 8%, n = 6
536,038.3 = A × ((1+0.08 )^(6) - 1)/0.08)
536, 038.3 = A × 7.3359
536,038.3/7.3359 = A
$73,070.5 = A
Farrell should invest at the end of every year
$73,070.5
Identify whether each of the following is a flow variable or a stock variable.
The total value of all of a company's outstanding bonds
The number of Canadian immigrants living in the United States
The amount a company borrows in any given year by issuing bonds
The value of a rare coin
The number of Canadians who emigrate to the United States each year
The amount by which a rare coin increases in value each year
Answer:
Stock : 1, 2, 4 and Flow : 3, 5 ,6
Explanation:
Stock is a variable that is measured at a particular point of time. Eg: Wealth at a point of time, Capital at a point of time.
Flow is a variable that is measured for a particular period of time. Eg: Income for a period of time, Investment for a period of time.
Total value of company's outstanding bonds : Stock
The number of Canadian immigrants living in US : Stock
The company's borrowings in given year by bonds : Flow
The value of a rare coin : Stock
The no. of canadians emigrating US each year : Flow
The amount by which rare coin value increases each year : Flow
Flow variables are measured over a period of time, while stock variables are measured at specific points in time. In the provided examples, the total value of a company's outstanding bonds, the number of Canadian immigrants in the US, and the value of a rare coin are stock variables. The amount a company borrows in a year, the number of Canadians emigrating to the US each year, and the increase in a coin's value annually are flow variables.
Explanation:To understand whether these are flow variables or stock variables, we need to identify whether the data is measured at one specific point in time (stock) or over an interval of time (flow).
The total value of all of a company's outstanding bonds is a stock variable because it represents a quantity at a specific point in time.The number of Canadian immigrants living in the United States is a stock variable as it is a measure at a specific point in time.The amount a company borrows in any given year by issuing bonds is a flow variable, as it's measured over a period of time.The value of a rare coin is a stock variable because it is measured at a specific point in time.The number of Canadians who emigrate to the United States each year is a flow variable, as it is measured over an interval of time.The amount by which a rare coin increases in value each year is a flow variable since this is a measurement that occurs over a duration of time.Learn more about Flow and Stock Variables here:https://brainly.com/question/34403239
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Amaz-a-nation reported the following data for the year just ended: sales revenue, $1,820,000; cost of goods sold, $920,000; cost of goods manufactured, $566,000; and selling and administrative expenses, $173,000. Amaz-a-nation's gross margin would be: a. $1,073,000 b. $1,254,000 c. $1,081,000. d. $507000. e. $900,000.
Answer:
Option (e) is correct.
Explanation:
Given that,
sales revenue = $1,820,000;
cost of goods sold = $920,000;
cost of goods manufactured = $566,000
selling and administrative expenses = $173,000
Gross margin = Sales revenue - cost of goods sold
= $1,820,000 - $920,000
= $900,000
Therefore, the Amaz-a-nation's gross margin would be $900,000.
The [blank] view of CSR approaches business decisions with understanding that economic gains and social progress are interconnected
Answer:
Socio economic view
Explanation:
The socio economic view relates to viewing organizational decisions in the light of their both social and economic consequences.
The concept of corporate social responsibility relates to discharge of those social obligations which an enterprise owes to it's various stakeholders.
A business operates within social bounds and thus it becomes indispensable for a business to contribute to social good which could be in the form of amenities, providing better sanitation facilities or better infrastructure.
As per the socio- economic view, economic gains which represent economic profits and social gains as a measure of social betterment, both are inter related and a corporation must not view them as separate.
Rios Co. makes drones and uses the variable cost approach in setting product prices. Its costs for producing 30,000 units follow. The company targets a profit of $310,000 on this product. Variable Costs per Unit Fixed Costs Direct materials Direct labor Overhead Selling $70Overhead 40 25 15 Selling Administrative $670,000 305,000 285,000 1. Compute the variable cost per unit 2. Compute the markup percentage on variable cost. 3. Compute the product's selling price using the variable cost method 1 Variable cost per unit 2 Markup percentage 3 Selling price
Answer:
1. Variable cost per unit = $150
2. Markup percentage = 34.89%
3. Selling price = $202.33
Explanation:
Variable cost per unit = 70+40+25+15= $150
Fixed cost = 670,000+ 305,000 +285,000= $1,260,000
Fixed cost per unit = 1,260,000/30,000= $42
Profit per unit = Targeted profit
Targeted production unit
= $310,000 =$10.33
30,000
Markup percenge = Fixed cost per unit + profit per unit
Variable cost per unit
=$42+ $10.33 = 52.33 * 100 = 34.89%
$150 $150 1
Selling Price = Variable cost per unit + markup
= $150+$42+$10.33
= $202.33
Variable cost-plus pricing is calculated by determining variable costs per unit and adding mark-up which will cover fixed costs per unit and generate a targeted profit margin.
Answer: The variable cost per unit is 150, The mark up percentage on variable cost is 5%, The selling price is $192
Explanation:
To calculate variable cost per unit
= (40 + 25 + 15 + 70)
= 150
To calculate fixed cost per unit
(670,000 + 305,000 + 285,000)
=1,260,000
Fixed cost per unit
= Total Fixed cost ÷ Total unit produced
= 1,260,000 ÷ 30,000
= 42
To compute the total variable cost
=Total Variable cost = Total quantity of output × variable cost per unit of output
= 30,000 × 150
= 4,500,000
Total Cost
= TFC + TVC
= 1,260, 000 + 4,500,000
= 5,760,000
To compute the mark up percentage on variable cost
= profit/ cost price ×100
= 310,000/ 5,760,000 × 100
= 0.05 × 100
= 5%
To compute the product selling price using the variable cost method
= variable cost per unit + Fixed cost per unit
= 150 + 42
= 192
Therefore the selling price is $192 in order to cover the fixed cost.