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koban
2 months ago
14

You have two options for how to spend the afternoon. you can either go see a movie with your roommate or work as a tutor for the

math department. from experience, you know that going to see a movie gives you $20 worth of enjoyment, and with your student discount, a movie ticket only costs $12. if you spend the afternoon working as a math tutor, you will get paid $45. on a typical day, you wouldn't be willing to spend the afternoon working as a math tutor for less than $35. what is your economic surplus from working as a math tutor instead of going to the movies?
Business
1 answer:
Mariulka [3.8K]2 months ago
5 0
Economic Surplus: $12 Explanation: The economic surplus is calculated as the difference between benefit and cost. In this situation, as a math tutor, he earns $45 without incurring other costs. However, opting for a movie incurs a $12 cost. Therefore, the economic surplus is $12, the amount saved by choosing to be a math tutor over attending the movie.
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The following unadjusted trial balance is prepared at fiscal year-end for Nelson Company. Nelson company uses a perpetual invent
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Debit Insurance expense 1,720

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Insurance expense 1,720

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Rent expense—Office space 8,000

Store supplies expense 2,550

Advertising expense 9,300

Totals $187,425 $187,425

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c)  Nelson company

Income Statement

For the month ending January 31, 202x

Revenues:

  • Total net sales                                                              $111,800

Expenses:

  • Cost of goods sold $40,280
  • Depreciation expense - equipment $6,500
  • Sales salaries expense $12,900
  • Office salaries expense $12,900
  • Insurance expense $1,720
  • Rent expense - Selling space $8,000
  • Rent expense - Office space $8,000
  • Store supplies expense $2,550
  • Advertising expense $9,300                              ($102,150)

Operating income                                                           $9,650

b) Nelson company

Income Statement

For the month ending January 31, 202x

Sales:

  • Total sales $115,900
  • Sales discounts ($2,100 )
  • Sales returns and allowances ($2,000 )            $111,800

Cost of goods sold                                                           ($40,280)

Gross profit                                                                         $71,520

Selling expenses:

  • Depreciation expense - equipment $6,500
  • Sales salaries expense $12,900
  • Rent expense - Selling space $8,000
  • Store supplies expense $2,550
  • Advertising expense $9,300                                   ($39,250)

S&A expenses:

  • Office salaries expense $12,900
  • Insurance expense $1,720 Rent expense - Office space $8,000                     
($22,620)</ul>

Operating income                                                                 $9,650

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