Suppose That During a Given Time Period the Implicit Cost

question 327

Multiple Choice

Suppose that during a given time period the implicit cost for a business was $1,500 and that the explicit cost was $6,000. Also suppose that the firm sold 1,000 units of its products at $8 per item. We can conclude that the firm's

• A) accounting profit was $2,000, and its economic profit was $500.
• B) accounting and economic profits were both $2,000.
• C) accounting profit was -$500, and economic profit was $2,000.
• D) accounting profit was $2,000, and economic profit was -$500.

Allocate support department expenses to divisions based on proportional metrics.

Calculate the increase in operating income from internal transfers and negotiate transfer prices.

Identify the most profitable divisions using various profitability metrics.

Compute minimum acceptable return on investment.

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Definitions:

Nationalization

The process by which a government takes control of a company or industry, often turning it from private to state ownership.

Scarce Resource

A resource that is limited in availability and cannot meet all demands placed on it by humans wanting unlimited access.

Farmland

Land used for farming and agriculture purposes to grow crops and/or rear animals, playing a critical role in the food supply chain and the economy.

Acres

A unit of area used primarily in the English-speaking world, representing 43,560 square feet or about 4046.86 square meters.