A custom harvesting firm is considering adding another tractor to its fleet; each tractor is rented for $1500 per day. Assume that the additional tractor would be capable of harvesting 100 acres per day and that each acre that is harvested brings in $20 in revenue. Also assume that adding the tractor would not affect any other costs.
a. Calculate the MRPc. Show your work.
b.Should the firm add this tractor? Explain your answer.
c. Suppose the revenue drops to $13 per acre harvested. Should the firm add the tractor in this scenario? Explain your answer.
d. A firm invested $500 at 6% interest. What will be the balance for the investment after 7 years? Show your work.
In: Economics
Demand: Qd = 200 – 5P Supply: Qs = 5P
If a quantity tax of $2 per unit sold is imposed,
(a)Considering that the government will earn revenue, overall, do you think that the society benefits from the imposition of the tax? Explain.
(b) Calculate the equilibrium market price and the equilibrium quantity sold.
(c) Determine the demand and supply equation after the tax.
(d) What will be the new equilibrium price paid by the buyers and the new price received by the supplier?
(e) Calculate the new equilibrium quantity sold.
(f) Calculate the tax revenue earned by the government.
(g) Calculate the deadweight loss due to the tax.
(h) What determines whether the buyer of the seller bears the burden of the tax?
In: Economics
A profit-maximizing monopolist operates in market with an inverse demand curve given by P = 20 − Q and an associated marginal revenue MR = 20 − 2Q. Their marginal cost of production is constant at MC = 4. Assume for now that they have to sell each unit of output for the same price.
a) Find the monopolist’s optimal choice of output and the socially efficient output.
b) Sketch demand, marginal revenue, and marginal cost. Indicate on your diagram the points you found in part a).
c) What is the amount of deadweight loss at the monopolist’s optimal choice? If a buyer is willing to pay more than marginal cost for the next unit beyond the monopolist’s choice of output, why doesn’t the monopolist choose to produce and sell that unit?
In: Economics
The following accounts are taken from the December 31, Year 4
financial statements of a company.
| Accounts Payable | $ | 2,075 | |
| Accounts Receivable | 800 | ||
| Selling & Administrative Expenses | 2,500 | ||
| Cash | 2,200 | ||
| Common Stock | 2,000 | ||
| Dividends | 1,900 | ||
| Income Tax Expense | 400 | ||
| Interest Expense | 75 | ||
| Other Expenses | 500 | ||
| Notes Payable | 5,000 | ||
| Other Assets | 2,500 | ||
| Other Liabilities | 3,000 | ||
| Other Operating Expenses | 2,000 | ||
| Other Revenue | 300 | ||
| Property and Equipment | 11,000 | ||
| Retained Earnings, December 31, Year 3 | 4,800 | ||
| Salaries and Wages Expense | 3,000 | ||
| Supplies | 300 | ||
| Service Revenue | 10,000 | ||
What is the amount of retained earnings on the Balance Sheet at the
end of Year 4?
In: Accounting
In: Math
In 2021, the Westgate Construction Company entered into a contract to construct a bridge for $12,000,000.
The bridge was completed in 2023. Information related to the contract is as follows:
2021 2022 2023
Cost incurred during the year $1,840,000 $3,760,000
$4,500,000
Estimated costs to complete as of year-end $6,160,000 $5,600,000
$0
Billings during the year $3,000,000 $4,000,000 $5,000,000
Cash collections during thee year $2,600,000
$3,900,000 $5,100,000
a. Westgate recognizes revenue over time according to percentage of completion. What gross profit (loss) will Westgate record on the contract for 2022?
b. Westgate recognizes revenue using the completed contract method. What amount will Westgate show on the balance sheet at December 31, 2022?
In: Accounting
In 2021, the Westgate Construction Company entered into a contract to construct a bridge for $12,000,000.
The bridge was completed in 2023. Information related to the contract is as follows:
2021 2022 2023
Cost incurred during the year $1,840,000 $3,760,000
$4,500,000
Estimated costs to complete as of year-end $6,160,000 $5,600,000
$0
Billings during the year $3,000,000 $4,000,000 $5,000,000
Cash collections during thee year $2,600,000
$3,900,000 $5,100,000
a. Westgate recognizes revenue over time according to percentage of completion. What gross profit (loss) will Westgate record on the contract for 2022?
b. Westgate recognizes revenue using the completed contract method. What amount will Westgate show on the balance sheet at December 31, 2022?
In: Accounting
Question 1
Adam, an engineer, working for a foreign oil and gas company earning RM96,000 per year is planning to give up his job and set up his own business. He estimates that renting an office would cost RM1,000 per month, hiring a secretary would cost RM1,500 per month and purchasing the required supplies cost him RM12,000 per annum. He estimates that his total revenue for the year would be RM180,000.
i) Explicit cost
ii) Implicit cost
iii) Economic profit
b. Explain briefly whether Adam should start his own business if the total revenue decreases by RM10,000.
In: Economics
Blossom Company sells goods that cost $325,000 to Pina Colada Company for $415,000 on January 2, 2020. The sales price includes an installation fee, which is valued at $44,200. The fair value of the goods is $380,800. The goods were delivered on March 1, 2020. Installation is considered a separate performance obligation and was completed on June 18, 2020. Under the terms of the contract, Pina Colada Company pays Blossom $275,000 upon delivery of the goods and the balance at the completion of the installation.
Using the five-step process for revenue recognition, determine when and how much revenue would be recognized by Blossom. Assume IFRS is followed.
Prepare the journal entries for Blossom on January 2, March 1, and June 18, 2020.
In: Accounting
The demand for farmed salmon from your firm is random. Assume that the market is perfectly competitive and that on any given day the price of a pound is either $4.40 or $4.80, with a probability of 1/2 for either possibility. The marginal cost of producing a pound of salmon is MC = 0.02Q.
(a) What is your firm’s expected price and expected marginal revenue?
(b) If you produce so that expected marginal revenue equals marginal cost, E[MR]= MC, how much profit is lost if the price turns out to be $4.80? How much is lost if the price turns out to be $4.40?
(c) Presuming that each day you can change the price of your salmon, what is the value of a perfect forecast of the demand?
In: Economics