The positive slope of the per-worker production function illustrates the relationship between per-worker output and ________
A) diminishing marginal returns
B) the capital-labor ratio
C) the rate of inflation
D) the rate of unemployment
B
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Suppose the inflation rate target is "0" and the long run federal funds target is also "0." Calculate the federal funds rate if the current inflation rate is 5% and real output is 4.5% below trend output
A) 2.25% B) 5.25% C) 0.5% D) 0.25%
Diego Company manufactures one product that is sold for $80 per unit in two geographic regions—the East and West regions. The following information pertains to the company’s first year of operations in which it produced 40,000 units and sold 35,000 units
Diego Company manufactures one product that is sold for $80 per unit in two geographic regions—the East and West regions. The following information pertains to the company’s first year of operations in which it produced 40,000 units and sold 35,000 units
| Variable costs per unit: | ||
| Manufacturing: | ||
| Direct materials | $ | 24 |
| Direct labor | $ | 14 |
| Variable manufacturing overhead | $ | 2 |
| Variable selling and administrative | $ | 4 |
| Fixed costs per year: | ||
| Fixed manufacturing overhead | $ | 800,000 |
| Fixed selling and administrative expense | $ | 496,000 |
The company sold 25,000 units in the East region and 10,000 units in the West region. It determined that $250,000 of its fixed selling and administrative expense is traceable to the West region, $150,000 is traceable to the East region, and the remaining $96,000 is a common fixed expense. The company will continue to incur the total amount of its fixed manufacturing overhead costs as long as it continues to produce any amount of its only product.
1. What is the unit product cost under variable costing?
2. What is the unit product cost under absorption costing?
3. What is the company’s total contribution margin under variable costing?
4. What is the company’s net operating income (loss) under variable costing?
5. What is the company’s total gross margin under absorption costing?
6. What is the company’s net operating income (loss) under absorption costing?
7. What is the amount of the difference between the variable costing and absorption costing net operating incomes (losses)?
Walmart wants to raise $250 million to finance the renovation of their retail stores, and the company wishes to raise the funds through indirect finance. Which of the following methods could it use?
A) It could issue $250 million in stock. B) It could sell $250 million in bonds. C) It could borrow $250 million from a bank. D) It could choose either A or B.
An assumption behind the infant industry argument for tariff protection is that
A. foreign competitors are selling output below average cost. B. the domestic industry will eventually gain comparative advantage in producing the good. C. the domestic industry will be facing an upward adjustment in its average cost. D. the market needs additional competition to satisfy consumer demand.