On November 1, 2019, Gordon Co. collected $31,800 in cash from its tenant as an advance rent payment on its store location. The

Answer:

The calculations are presented below:

Explanation:

1.                       FIFO    LIFO Average cost  

Cost of goods sold      

Beginning inventory       $11,200      $11,200  $11,200

(400 units ×  $28)                          

Purchases                       $16,625    $16,625   $16,625

(475 units × 35)                  

Total goods available $27,825    $27,825   $27,825  

Ending inventory             $18,025    $15,575    $16,695

(525 units)  

Cost of goods sold          $9,800    $12,250    $11,130  

Calculated using ending inventory = 475 × $35 + 50 × $28    

FIFO = $18,025  

For LIFO ending inventory: 400 × $28 + 125 × $35

Results in $15,575  

Average cost is found by: $27,825 ÷ $875    

Which equals 31.8      

Ending inventory is calculated as 525 × 31.8

This leads to $16,695

2.                           FIFO            LIFO         Average

Sales

(307 × $50)                $15,350         $15,350    $15,350

Cost of goods sold     $9,800    $12,250    $11,130

Gross Profit                 $5,550           $3,100      $4,220

Expenses                     $1,680           $1,680      $1,680

Net income                  $3,870           $1,420       $2,540

3. FIFO ranks as 3

LIFO ranks as 2

Average ranks as 1

Answer:

(a) Predetermined overhead rate for the entire plant:

= 30

Applied manufacturing overhead for Job A:

= Total hours of direct labor × Predetermined overhead rate for the plant

= 15 × 30

= 450

Applied manufacturing overhead for Job A:

= Total direct labor hours × Plantwide predetermined overhead rate

= 9 × 30

= 270

(b) Department-specific predetermined overhead rates:

= 30

= 1.2

Applied manufacturing overhead for Job A:

= (Machining machine hours × 30) +  (Assembly direct labor hours × 1.2)

= (11 × 30) +  (10 × 1.2)

= 330 + 12

= 342

Applied manufacturing overhead for Job B:

= (Machining machine hours × 30) +  (Assembly direct labor hours × 1.2)

= (12 × 30) +  (5 × 1.2)

= 360 + 6

= 366

Answer:

To maximize utility, the consumption of product Y should be increased while reducing the intake of product X.

Explanation:

The utility-maximizing principle asserts that a consumer optimizes utility when the marginal utility per dollar spent is equal for both products.

For Product X, the marginal utility per dollar is:

= 2 utils per dollar

For Product Y, the marginal utility per dollar is:

= 8 utils per dollar

According to this principle, the consumer should increase the consumption of product Y and decrease that of product X.