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FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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A 10 % decrease in the selling price of a product will have the same impact on net income as a 10 % increase in the variable expenses. Do you agree? Why or why not? Give an example.
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- Helparrow_forwardYour answer is incorrect. Divide the estimated average annual income by the average investment. Investment cost plus residual value, divided by two, equals average investment. Can you please redo it? Thanksarrow_forwardNow suppose that annual unit sales, variable cost, and unit price are equal to their respective expected values—that is, there is no uncertainty. Determine the company's annual profit for this scenario. Round answer to a whole number, if needed.$arrow_forward
- using the price p=20 - .05x, use the Revenue function to find the marginal Revenue function R'(x), Find a. R'(100)= b. R'(175)= c. R'(250)= The marginal Revenue R'(x) approximates how the revenue will change on the sale of the next item. a. Given R(100) = 642 and R'(100)= 18 then R(101) ≈ b. Given R(400) = 16,250 and R'(400)= -10 then R(401) ≈ c. Given R(1000) = 3500 and R'(1000) = 3 then R(1001) ≈arrow_forwardThe contribution margin equals sales minus all O period O variable O fixed O product expenses.arrow_forwardIf sales volume increases and all other factors remain constant, then the: O contribution margin ratio will increase. O margin of safety will increase. break-even point will decrease. O net operating income will decrease.arrow_forward
- What are the answers for the following? Construct a cost-volume-profit chart on your own paper. What is the break-even sales? What is the expected margin of safety in dollars and as a percentage of sales? Determine the operating leverage. Round to one decimal place.arrow_forwardA consumer's utility only depends on the consumption of goods A and B according to the following Cobb - Douglas utility function: U(A, B) = A3/5 B 2/5. The price of goods A and B are $10 and $10, respectively. The consumer has a budget of $1500 that he can use to consume the two goods. a) Calculate the optimal bundle and maximized utility for the consumer. b) A new tax of $5 is imposed on the price of good B. Compute the new optimal bundle of good A and B for the same consumer. What is the utility loss due to the tax? c) Show that the consumer would prefer a lump sum income tax that raises the same revenue of $200 as the tax on good B.arrow_forwardWhen the sales price per unit decreases, the contribution margin per unit A. decreases B. increases OC. increases proportionately OD. remains the same 13arrow_forward
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