Answer:
Condensed income statements
Company A B C
Sales $970 $895 $530
Cost of goods sold $570 $350 $205
Gross profit $400 $565 $325
Operating expenses $65 $50 $150
Net income $335 $515 $175
Explanation:
Company A B C
Net income $335 ? $175
Sales ? $895 $530
Gross profit $400 ? $325
Operating expenses ? $50 ?
Cost of goods sold $570 $350 ?
Condensed income statements
Company A B C
Sales $970 $895 $530
Less: Cost of goods sold $570 $350 $205
Gross profit $400 $565 $325
Less: Operating expenses $65 $50 $150
Net income $335 $515 $175
Swifty Corporation incurs the following costs to produce 8600 units of a subcomponent: Direct materials $7224 Direct labor 9718 Variable overhead 10836 Fixed overhead 16200 An outside supplier has offered to sell Swifty the subcomponent for $2.85 a unit. If Swifty could avoid $3000 of fixed overhead by accepting the offer, net income would increase (decrease) by
Answer:
increased by $6,268
Explanation:
The computation of the change in the net income is shown below:
Particulars Make Buy Difference
Direct materials $7,224 $0 $7,224
Direct labor $9,718 $0 $9,718
Variable overhead $10,836 $0 $10,836
Fixed overhead $16,200 $13,200 $3,000
Purchase price
(8,600 units × $2.85) $0 $24,510 -$24,510
Change in income $43,978 $37,710 $6268
Net income would increased by $6,268 if the order is accepted
The total market value of General Motors (GM) is $10 billion. GM has a market value of $7 billion of equity and a face value of $12 billion of debt. What are the weights in equity and debt that are used for calculating the WACC? A. 0.7, 0.3 B. 0.3, 0.7 C. 0.35, 0.65 D. cannot be determined
Answer:
A
Explanation:
The market value of equity and debt are used in calculating the weights when determining WACC
Total market value = market value of debt + market value of equity
$10 billion = 7 billion + market value of debt
market value of debt = $3 billion
weight of debt = $3 billion / $10 billion =0.3
weight of equity = $7 billion / $10 billion = 0.7
Convergence property implies that on the delivery day,
A. cost-of-carry is paid
B. gain on the long position equals loss on the short position
C. observed futures price equals observed spot price
D. hedgers make money
Answer:
C.
Explanation:
Convergence property strictly implies that on the delivery day the observed futures price equals the observed spot price. In the markets these two prices must converge, If this does not happen, then this creates an arbitrage opportunity which ultimately brings with it the possibility for a risk-free profit, which is the act of buying an asset and immediately selling the same asset for a higher price.
Where would you go in QuickBooks Online to see the range of default and extra lists that are available? a) Sales Center, then Settings and All Lists b) + New button and All Lists c) Gear icon and All Lists d) Sales Center, then Settings and Add Lists
Answer: c) Gear icon and All Lists
Explanation:
Quickbooks is an accounting software that provides accounting services to mostly small to medium scale businesses. They also provide cloud services to improve the convenience of accessing their services.
When one is trying to locate the range of default and extra lists that are available, they should click on the Gear icon and then under the Lists menu click on the first option which will be All Lists. The needed data will be there.
Flagg, Inc. records adjusting entries at its December 31 year end. At December 31, employees had earned $9,200 of unpaid and unrecorded salaries. The next payday is January 3, at which time $23,000 will be paid. Prepare the January 1 journal entry to reverse the effect of the December 31 salary expense accrual.
Debit Salaries expense $9,200; credit Salaries payable $9,200.
Debit Salaries expense $13,800; debit Salaries payable $9,200; credit Cash $23,000.
Debit Salaries payable $13,800; credit Cash $13,800.
Debit Salaries payable $9,200, credit Salaries expense $9,200.
Debit Salaries expense $13,800; credit Salaries payable $13,800.
Answer:
Debit Salaries payable $9,200, Credit Salaries expense $9,200.
Explanation:
Journal entry to reverse the effect of the December 31 salary expense accrual:
Date Journal Entry Debit Credit
Salaries payable $9,200
Salaries expense $9,200
Opera Corp. uses the dollar-value LIFO method of computing its inventory cost. Data for the past three years is as follows: Dec 31, 20X0, Inventory at end-of-year prices = $65,000 (price index = 1.00); Dec 31, 20X1, Inventory at end-of-year prices = $126,000 (price index = 1.05); Dec 31, 20X2, Inventory at end-of-year prices = $135,000 (price index = 1.10). What is the 20X0 inventory balance using dollar-value LIFO?
a. $65,000.
b. $61,904.
c. $122,727.
d. $135,000
Answer:
a. $65,000.
Explanation:
since the price index for year 20x0 is 1, then the inventory balance using dollar value LIFO = $65,000 / 1 = $65,000.
Dollar value LIFO works in cost layers, or pools of inventory.
E.g. the 20x1 inventory would be worth:
($126,000 / 1.05) = $120,000
($120,000 - $65,000) x 1.05 = $57,750
value of 20x1 inventory = $65,000 + $57,750 = $122,750
yak has a selling price of $110 per unit, and variable cost per unit of $45. At a sales volume of 350 units, net income is $10,932. If sales are 425 units, net income will be closest to: Group of answer choices
Answer:
Net income= $15,807
Explanation:
Giving the following information:
Selling price= $110 per unit
Unitary variable cost= $45
At a sales volume of 350 units, net income is $10,932.
First, we need to calculate the fixed costs:
Fixed costs= total contribution margin - net income
Fixed costs= 350*(110 - 45) - 10,932
Fixed costs= $11,818
Now, the net income for 435 units:
Net income= total contribution margin - fixed costs
Net income= 425*65 - 11,818
Net income= $15,807
Differentiate between economic growth and economic development ?
Answer:
as a summary see the attached picture
Surveys show that a small increase in the price of one brand of gasoline (e.g. Shell or Irving) will cause most people to switch to other brands. This finding suggests that the demand curve for an individual brand of gasoline is:
Answer:
Relative elastic
Explanation:
Elastic demand means that quantity demanded is sensitive to price changes.
A small change in price leads to a greater change in quantity demanded
Which of the following statements regarding supply chain customer service is most accurate?
a. The most common form of supply chain is the collaborative-response efficiency strategy.
b. In order for a supply chain to work effectively, key decisions should be made by a third-party logistics provider.
c. The longer the supply chain the greater the economies of scale and the better the profit margins.
d. Supply chains should consider the needs of consumers provided those needs are consistent with marketing strategies.
e. Supply chain managers often need to make trade-offs between efficiency and responsiveness.
Answer:
d. Supply chains should consider the needs of consumers provided those needs are consistent with marketing strategies.
Explanation:
In order for supply chain customer service to be effective, it is necessary to focus on customer needs and these needs must be aligned with the company's marketing strategies.
In other words, each stage of the supply chain must operate in an integrated manner, so that each process is synergistic and so that the final consumer can receive the product at the right time, in the right quantity and in the right quality. Therefore, supply chain management will improve each step of the process, guaranteeing the quality of the processes, the reduction of time, the reduction of costs and waste and ensuring the continuous improvement of the process, which will make the product go through each channel effectively, generating value and strengthening the relationship between the company and the consumer.
An auto manufacturer uses 500 tons of steel per day. The company pays $1100 per ton of steel purchased, and each order incurs a fixed cost of $2250. The holding cost is $275 per ton of steel per year. Using the EOQ model, calculate the optimal order quantity, cycle length, and average cost per year
Answer:
economic order quantity (EOQ) = √(2SD/H)
D = annual demand = I will assume that the company works during 250 days per year (from Monday to Friday) = 250 x 500 = 125,000
S = order cost = $2,250
H = holding cost = $275
EOQ = √[(2 x 2,250 x 125,000) / 275] = 1,430.19 ≈ 1,430 tons
cycle length:
125,000 / 1,430 = 87.4 purchases per year
365 days / 87.4 = place a purchase order every 4.2 days
total annual cost:
total costs = (87.4 x $2,250) + (125,000 x $1,100) + (1,430/2 x $275) = $196,650 + $137,500,000 + $196,625 = $137,893,275
The Unique Bookshelf Company is considering the purchase of a custom delivery van costing approximately $50,000. Using a discount rate of 20%, the present value of future cost savings is estimated at $51,200. To yield the 20% return, the actual cost of the van should not exceed the $50,000 estimate by more than:
Answer:
$1,200
Explanation:
Given that
Purchase of a customer delivery van = $50,000
discount rate = 20%
Present value of future cost savings = $51,200
Yield = 20%
Based on the above information, as per the net present value the initial cost of the equipment should not be more than the present value of cash inflows i.e. $51,200
So the more than amount is
= $51,200 - $50,000
= $1,200
The present value is the monetary value of the future cash inflows or outflows. It is determined based upon the differences in the discount rates in the future that is estimated as per the current growth rates.
If the company wants to yield a 20% return then the actual cost must not be estimated at more than $1,200.
Computation:
GIven,
Purchase cost =$50,000
Discount rate and yield rate =20%
Present value of future cost savings =$51,200
[tex]\rm{Exceeding\; Amount}=Present\;Value-Purchase\;Cost\\\\=\$51,200-\$50,000\\\\=\$1,200[/tex]
As per the net present value of the van, the initial cost that is the purchase price of the van should not be more than the present value of the future cost savings or the present value of the future cash inflows.
In this case, the present value of $50,000 cannot exceed this limit.
Therefore, in this case, the exceeding amount is $1,200.
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Achieving high product quality lowers operating costs because of the effect of quality on:___________.
a. shipping costs
b. employee productivity
c. corporate-level planning
d. customer satisfaction
Answer:
Option C, corporate-level planning, is the right answer.
Explanation:
Option C, “corporate-level planning” is the correct answer because it is the corporate planning according to which every employee has to work. If the quality of planning is good then the firm will produce higher output with lower operating cost and if the planning is not good or suitable then the firm can increase the productivity but operating cost may go very high. Therefore, option C is right.
Here I Sit Sofas has 6,000 shares of common stock outstanding at a price of $83 per share. There are 710 bonds that mature in 19 years with a coupon rate of 5.7 percent paid semiannually. The bonds have a par value of $1,000 each and sell at 94 percent of par. The company also has 4,900 shares of preferred stock outstanding at a price of $36 per share. What is the capital structure weight of the debt
Answer:
49.7392%
Explanation:
The computation of the capital structure weight of the debt is shown below:
But before that we need to determine the following calculations
Equity market value is
= number of shares × price per share
= 6,000 shares × $83
= 498,000
Current debt value = number of bonds × price per bond
= 710 × (94% × 1000)
= 667,400
Preferred stock value is
= number of shares × price per share
= 4,900 × $36
= 176,400
Now Total capital is
= common equity value + debt value + preferred stock value
= $498,000 + $667,400 + $176,400
= $1,341,800
And finally
Weight of debt is
= debt value ÷ total capital
= $667,400 ÷ $1,341,800
= 0.497392
= 49.7392%
Sheridan Company sells its product for $7100 per unit. Variable costs per unit are: manufacturing, $4400, and selling and administrative, $100. Fixed costs are: $18000 manufacturing overhead, and $24000 selling and administrative. There was no beginning inventory at 1/1/18. Production was 20 units per year in 2018–2020. Sales were 20 units in 2018, 16 units in 2019, and 24 units in 2020. Income under absorption costing for 2020 is
Answer:
Sheridan Company
Income Statement
For the year ended December 31, 202x
Sales revenue $170,400
Cost of goods sold ($129,600)
Gross profit $40,800
Period costs ($24,000)
Operating income $16,800
cost of goods manufactured 2019 (or 2020, it is the same)= (20 x $4,500) + $18,000 = $108,000 / 20 = $5,400 per unit
COGS 2020 = 24 x $5,400 = $129,600
sales revenue = 24 x $7,100 = $170,400
During the month of February, Victor Services had cash receipts of $8,400 and cash disbursements of $10,400. The February 28 cash balance was $3,600. What was the February 1 beginning cash balance?
Answer:
$5,600
Explanation:
Calculation for the beginning cash balance
Using this formula
Beginning cash balance=Cash Balance - Cash Receipts + Cash Disbursements
Let plug in the formula
Beginning cash balance=$3,600-$8,400+$10,400
Beginning cash balance=$5,600
Therefore the Beginning cash balance will be $5,600
Which one of the following statements is correct? A) The lessor is primarily concerned with returning the asset at the end of the lease term without incurring any additional charges. B) The lessor is primarily concerned about the use of the asset. C) If a computer manufacturer leased computers it built to others, it would be engaging in leveraged leasing. D) A firm should always purchase, rather than lease, any asset that has a projected positive salvage value at the end of the relevant period of use. E) Lessors provide a source of financing for lessees.
Answer: E) Lessors provide a source of financing for lessees.
Explanation:
A Lease is a form of financing because in financing, an entity provides funding in the form of assets whether cash or otherwise to another entity to allow them use to operate their business. The entity that was provided with funding will then pay a periodic payment as a way to pay off the funding.
This is what happens in leases. The Lessor is the owner of the asset and they lease it to the Lessee who then uses it and pays a periodic amount to the Lessor for using the asset.
The ONE correct statement about lessors, lessees, and leasing, is E) Lessors provide a source of financing for lessees.
A lease is a source of financing business activities. Returning or using the asset is not a concern of the lessor. The lessee and not the lessor engages in leveraged leasing. We cannot conclude that a firm should always purchase an asset with positive salvage value. Sometimes, a firm needs to lease its equipment or building.
Thus, the correct statement about lessors, lessees, and leasing, is Option E.
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Number of setups 20 20 Machining hours 1000 4000 Orders packed 150 350 Number of products manufactured 600 400 If machining hours are used as a base under traditional casting, how much overhead is assigned to Product A1 each year?
Answer:
$96,000
Explanation:
The computation of the overhead amount assigned to Product A1 each year is shown below:
= Overhead cost incurred per year ÷ number of hours worked by machine department × machine hours at Product A1
= $480,000 ÷ 5,000 hours × 1,000 hours
= $96,000
We simply applied the above formula so that the overhead cost assigned could come
A company uses the weighted average method for inventory costing. At the start of a period the production department had 48,000 units in beginning Work in Process inventory which were 36% complete; the department completed and transferred 171,000 units. At the end of the period, 18,000 units were in the ending Work in Process inventory and are 71% complete. The production department had conversion costs in the beginning work in process inventory of $93,000 and total conversion costs added during the period are $726,700. Compute the conversion cost per equivalent unit.
Answer:
the conversion cost per equivalent unit is $4.46.
Explanation:
Step 1 : Computation of equivalent units of production for conversion costs
Units completed and transferred (171,000 × 100%) = 171,000
Units in the ending work in process (18,000 × 71%) = 12,780
Equivalent units of production for conversion costs = 183,780
Step 2: Determine the Total Cost of Conversion incurred during the period
Conversion Costs in Opening Work In Process = $93,000
Add conversion costs added during the period = $726,700
Total Cost of Conversion incurred during the period = $819,700
Step 3 : Calculate the conversion cost per equivalent unit.
Conversion cost per equivalent unit = Total Cost of Conversion ÷ Equivalent units of production
= $819,700 ÷ 183,780
= $4.46
A natural monopoly exists when a single seller experiences ____________ average total costs than any potential competitor.
Answer:
lower
Explanation:
A natural monopoly appears when there are high entry costs like large infrastructure costs or economies of scale where a company can provide the products at a lower costs than others which provides a big advantage to the firm in the market and makes it difficult for any potential competitor to be able to compete. According to that, the answer is that a natural monopoly exists when a single seller experiences lower average total costs than any potential competitor as this represents a barrier for the competitor to be able to enter the market.
On January 1, 2013, Ameen Company purchased a building for $36 million. Ameen uses straight-line depreciation for financial statement reporting and MACRS for income tax reporting. At December 31, 2015, the book value of the building was $30 million and its tax basis was $20 million. At December 31, 2016, the book value of the building was $28 million and its tax basis was $13 million. There were no other temporary differences and no permanent differences. Pretax accounting income for 2016 was $45 million. The tax rate is 40%. The journal entry to account for the temporary difference will include
Answer:
1.Dr Income Tax Expense 22
Cr Income Tax Payable 16
Cr Deferred Tax Liability 6
2.Net Income of Ameen in 2016 = $23
Explanation
1.Preparation of the appropriate journal entry to record Ameena 2016 income taxes
Calculation for Pretax accounting income
Pretax accounting income = $45
Less:Excess Depreciation as per tax = ($5)
($20-$13)-($30-$28)
$7-$5
=$5
Taxable Income = $40
Income tax for the year = 40 × 40%
Income tax for the year= $16
Calculation for Deferred Tax Expense for the year 2016
Deferred Tax Expense for the year 2016 = ($28 - $13) ×40%
Deferred Tax Liability= $15 ×40%
Deferred Tax Liability= $6
Calculation for Income Tax Expense
Income Tax Expense = $16 + $6
Income Tax Expense= $22
Therefore the appropriate journal entry to record Ameena 2016 income taxes will be:
Dr Income Tax Expense $22
Cr Income Tax Payable $16
Cr Deferred Tax Liability $6
2. Calculation for Ameen 2016 net income
Net Income
Accounting Income of Ameen = $45
Less: Total Tax Expense = ($22)
Net Income of Ameen in 2016 = $23
Therefore the Net Income of Ameen in 2016 will be $23
Retain the small predictable layers of risk and transfer the unpredictable catastrophic layer of risk. Does this statement promote appropriate risk financing decision making
Answer:
Yes the statement does
Explanation:
Retaining small predictable layers of risk and transferring the unpredictable catastrophic layer of risk to a more capable body is a very good approach towards promoting appropriate risk financing decision making, this is because
Financial risk decisions are decisions taken between alternatives i.e risks associated with business activities . it is more appropriate to take alternatives with a predictable layer of risk,that way it would be easier for the management to handle the risk associated with it, while transferring the unpredictable catastrophic layer of risk to a more capable body ,like the Insurance companies .
When the Ideal State is higher than the Actual State, from the perspective of marketers, it is referred to as
Answer:
When the Ideal State is higher than the Actual State, from the perspective of marketers, it is referred to as Mass Damage.
Please mark me as Brainliest.Assume the United States economy has the following:
• GDP is $18,500 billion down from $19,350 billion nine months ago.
• Unemployment is at 7.8% up from 4.2% nine months ago.
• Inflation is stable at 2.0%.
• MPC=0.75
• NRU=4.0%
• Target Inflation is 2.0%
Required:
a. Explain in detail the problem the country is facing. Include an analysis of both inflation and unemployment including whether the economy is in a recession or not.
b. What is the size of the GDP gap? Show the calculations.
c. Government could address the problem with either increasing government spending, cutting taxes or both. If the government decided to increase spending to address the problem, by how much should spending be increased? If the government decided to cut taxes to address the problem, by how much should taxes be cut? Show the calculations and provide explanations.
d. Should the government cut taxes or increase spending or some combination of both to address the problem?
e. What could happen to make the policy you recommended?
Answer:
Note: the e question is incomplete. The missing part is "you recommended in Question 4 ineffective?"
1. When the GDP has decreased, but the unemployment has increased, there is slowdown in the economy. Therefore, this slowdown combined with the stable inflation points that the economy is in recession.
2. GDP gap = Actual GDP - Potential GDP
GDP gap = $18,500 billion - $19,350 billion
GDP gap = -$850 billion
GDP gap is the difference between the actual and potential GDP.
3. Calculation of the government expenditure multiplier and tax multiplier
Government spending multiplier = 1 / (1-MPC)
Government spending multiplier = 1/(1-0.75)
Government spending multiplier = 1/0.25
Government spending multiplier = 4
Tax Multiplier = -MPC / (1-MPC)
Tax Multiplier = -0.75 / (1-0.75)
Tax Multiplier = -0.75 / 0.25
Tax Multiplier = -3
Calculation of the required increase in government spending
ΔG = ΔY/Government spending multiplier
ΔG = $850 billion / 4
ΔG = $212.5 billion
Calculation of the required cut in taxes
ΔY = Tax multiplier * ΔT
ΔT = ΔY / Government spending multiplier
ΔT = $850 billion / -3
ΔT = -$283.33 billion
Therefore, the government spending should increase by $212.5 billion and taxes should cut by $283.33 billion.
4. The government should opt for increasing government spending, this is because the government spending multiplier is greater than the tax multiplier.
5. If there is not direct impact on inflation after the increase in government spending
The average annual return over the period 1886-2006 for stocks that comprise the S&P 500 is 8%, and the standard deviation of returns is 20%. Based on these numbers what is a 95% confidence interval for 2007 returns?
Answer:
The confidence interval for 2007 returns are 32%, 48 %
Explanation:
As per 9% rule
Range = mean +/- 2*Standard deviation
Range = 8 +/- 2*20
Range = 8-40 to 8+40
Range = -32 to 48
Boespflug Incorporated has a $1,000,000 investment opportunity that involves sales of $900,000, fixed expenses of $225,000, and a contribution margin ratio of 30% of sales. The margin for this investment opportunity is closest to:
Answer:
. 5.0%
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The margin for this investment opportunity for Boespflug is closest to 0.5%.
What is an investment opportunity ?A wise way to manage your finances and grow your wealth is through investing. If you choose wisely while investing your money, it may increase in value and outpace inflation. Investment has a bigger growth potential mostly due to the power of compounded and the trade-off between risk and return.
An investment opportunity is any tangible or intangible thing that is being offered, put up for sale, sold, or exchanged based fully or substantially on promises made about past, current, or future income, profit, or appreciation. These promises may be expressed expressly or implicitly.
Contribution margin= (30% × $900,000) = $ 270,000
Fixed expenses= 225,000
Net operating income= $ 45,000
Margin = Net operating income ÷ Sales
= $45,000 ÷ $900,000 = 5.0%
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List the five ways that contractual obligations may come to an end.
Answer:
1. Fulfillment of the contractual obligations by both parties.
2. Deliberate breach of contractual terms.
3. Prior written agreement to terminate the contract at a certain time.
4.When the contractual obligations are impossible to perform by a party
5. When a party discovers fraudulent activities or deceit within the contract.
Explanation:
1. The first way that a contractual obligation can come to an end is once they have been fulfilled by both parties. Once this happens, both parties are free from the contract and no longer owe each other any other obligation.
2. Once a party begins to break the terms of the contractual agreement, this can be seen as a breach of contract. Once this happens, the other party is no longer obliged to fulfill his/her own obligations within the contract.
3. Some contracts have a written agreement that describes situations in which the contract would be terminated automatically. This could be during pre-agreed conditions such as a global economic melt-down or a pandemic. Once these conditions are present, both parties can now be free of contractual obligations.
4. Once it is noticed that the obligations are actually impossible to perform, a party will definitely have to terminate the contract.
5. Once fraudulent activities are discovered within the terms of a contract by any party, the party is free to rescind the contract at any time. This could be lies, misinformation, and other misrepresentations of items within the contract.
The manufacturing overhead budget at Franklyn Corporation is based on budgeted direct labor-hours. The direct labor budget indicates that 3,000 direct labor-hours will be required in January. The variable overhead rate is $5 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $43,140 per month, which includes depreciation of $3,620. All other fixed manufacturing overhead costs represent current cash flows. The January cash disbursements for manufacturing overhead on the manufacturing overhead budget should be:_______.
a. $54,520.
b. $58,140.
c. $39,520.
d. $15,000.
Answer:
Total cash disbursement= $54,520
Explanation:
Giving the following information:
The direct labor budget indicates that 3,000 direct labor-hours
The variable overhead rate is $5 per direct labor-hour.
The company's budgeted fixed manufacturing overhead is $43,140 per month, which includes depreciation of $3,620.
The depreciation expense is not a cash disbursement.
Cash disbursement:
Total variable manufacturing overhead= 5*3,000= 15,000
Total fixed manufacturing overhead= 43,140 - 3,620= 39,520
Total cash disbursement= $54,520
Willco Inc manufactures electronic parts. They are analyzing their monthly maintenance costs to determine the best way to budget these costs in the future. They have collected the following data for the last 6 months: Machine Hours Maintenance Costs January 30,000 $61,946 February 40,000 $74,500 March 37,500 $65,900 April 39,000 $68,750 May 42,300 $74,000 June 35,000 $64,500 Using the high-low method, what is the fixed cost component of the monthly maintenance.
Answer:
Fixed costs= $31,312
Explanation:
Giving the following information:
January 30,000 $61,946
February 40,000 $74,500
March 37,500 $65,900
April 39,000 $68,750
May 42,300 $74,000
June 35,000 $64,500
To calculate the fixed costs under the high-low method, we need to use the following formulas:
Variable cost per unit= (Highest activity cost - Lowest activity cost)/ (Highest activity units - Lowest activity units)
Variable cost per unit= (74,500 - 61,946) / (42,300 - 30,000)
Variable cost per unit= $1.021
Fixed costs= Highest activity cost - (Variable cost per unit * HAU)
Fixed costs= 74,500 - (1.021*42,300)
Fixed costs= $31,312
Fixed costs= LAC - (Variable cost per unit* LAU)
Fixed costs= 61,946 - (1.021*30,000)
Fixed costs= $31,316
What increases the competitive pressures associated with the threat of entry?
Answer: E. When newcomers can expect to earn attractive profits
Explanation:
The Threat of Entry refers to the threat that companies that are already in the market face from companies that are looking to enter the market.
If the market is so profitable that newcomers can expect to make attractive profits, a lot of companies will come into the market to make said profits which will increase the competition in the market.