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Llana
1 month ago
7

Diana is a personal trainer whose client Charles pays $80 per hour-long session. Charles values this service at $100 per hour, w

hile the opportunity cost of Diana's time is $75 per hour. The government places a tax of $10 per hour on personal trainers. Before the tax, what is the total surplus?
a. $25
b. $20
c. $5
d. $0
Business
1 answer:
marusya05 [3K]1 month ago
4 0

Answer:

Option (a) $25

Clarification:

The information provided in the question includes:

Fee paid by Charles for services = $80 per hour

Value that Charles places on the service = $100 per hour

Diana's opportunity cost for her time = $75 per hour

Government tax = $10 per hour

Now,

Consumer Surplus applies:

= Value specified by buyer for service - Actual payment for service

= $100 - $80

= $20

Producer Surplus computes as:

= Amount received for session - Opportunity cost for seller

= $80 - $75

= $5

Therefore,

The Total surplus sums up as: Consumer Surplus + Producer Surplus

= $20 + $5

= $25

Hence,

Option (a) $25

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A company's unit costs based on 100,000 units are: Variable costs $75 Fixed costs 30 The normal unit sales price per unit is $16
Free_Kalibri [3164]

Answer:

Incremental profit = $30000

thus, the correct choice is a. $30,000

Explanation:

provided data

Variable costs = $75

Fixed costs = 30

Sales price = $165

to determine

incremental profit or loss  from approval

solution

The contribution per unit is calculated as follows:

Contribution per unit = $165 - $75

Contribution per unit = $90

Consequently, we determine the loss on contribution from forgoing regular sales:

Loss on contribution = $3000 × $90

Loss on contribution = $270000

Furthermore,

The incremental contribution for the special order is calculated as:

Incremental contribution = (135 - 75) × 5000

Incremental contribution = $300000

Thus, the incremental profit equates to:

Incremental profit = $300000 - $270000

Incremental profit = $30000

therefore, the correct option is a. $30,000

8 0
25 days ago
Assume that you are the vice president of movie production for a major Hollywood studio. You need to compose a memo to your film
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<span>Involving scientists and mathematicians in the project would provide significant advantages by enabling precise calculations regarding costs and environmental impact, along with optimizing our budget effectively. It's crucial to recognize the importance of these new consultants to our team.</span>
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Amortization Expense For each of the following unrelated situations, calculate the annual amortization expense and prepare a jou
soldi70 [3150]

Answer:

A. Dr Amortization expense $43,750

Cr Patents $43,750

B. Dr Amortization expense $5,230

Cr Patents $5,230

C. Dr Amortization expense $14,000

Cr Franchises $14,000

Explanation:

Journal entry preparations

A. Dr Amortization expense $43,750

($350,000÷8 years = $43,750)

Cr Patents $43,750

(Recording amortization for the patent)

B. Dr Amortization expense $5,230

($52,300÷10 years = $5,230)

Cr Patents $5,230

(Recording amortization for the patent)

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Margot finally finished her Ph.D. program. Although she has a great and secure teaching job at an urban college, she does not ho
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Answer:

Explanation:

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5 0
1 month ago
A repetitive manufacturing firm is planning on level material use. The following information has been collected. Currently, the
Scilla [3267]

Answer:

setup cost = $1.75

setup time = 2.625 min

Explanation:

given data

The firm operates for 250 days annually.

Annual demand is 22,000.

Daily demand is 88.

Daily production stands at 250.

Desired lot size is set at 63 (equivalent to 2 hours of output).

Holding costs are $40 per unit each year.

To determine

the setup cost and setup time

solution

The setup cost is calculated as

setup cost = \frac{Q^2*H*(1-\frac{d}{p})}{2D}......................1

Here, Q represents the desired lot size, H is the holding cost, d denotes daily demand, D is annual demand, and p is the daily output.

Plugging in the values,

setup cost = \frac{63^2*40*(1-\frac{88}{250})}{2*22000}

setup cost = \frac{2969*40*(0.648)}{44000}

setup cost = $1.75

Next,

the setup time is given by

setup time = \frac{setup\ cost}{setup\ labor}....................2

setup time = \frac{1.75*60min/hr}{40}

setup time = 2.625 min

8 0
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