Department a Had Total Sales of $84,000 and Department B

question 52

Multiple Choice

Department A had total sales of $84,000 and Department B had total sales of $36,000.Other Office Expenses,totaling $2,500,are allocated on the basis of total sales.The amount allocated to Department A is

• A) $750.
• B) $1,750.
• C) $1,250.
• D) $1,071.

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Definitions:

Producer Surplus

The difference between the actual price a producer receives (or producers receive) and the minimum acceptable price; the triangular area above the supply curve and below the market price.

Purely Competitive Market

A market structure characterized by a large number of small firms, identical products, and free entry and exit, which leads to firms being price takers.

Long-run Equilibrium

A state in which all firms in an industry are making normal profit, with no incentive for new firms to enter or existing firms to leave the market.

Producer Surplus

The difference between what producers are willing to accept for a good or service and the actual price they receive, representing economic gain.