# Consider a firm's short-run cost curves. If average total cost is increasing as output rises, thenSelect one:a. total fixed costs must be increasingb. average variable cost must be increasing,c. marginal cost must be below average total cost.d. average fixed costs must be increasing.e, average total cost is no longer equal to the sum of average variable cost and average fixed cost.​

Option (a) total fixed costs must be increasing if the average total cost is increasing as output rises.

### What happens to the average fixed cost when production increases in the short term?

In the short term, as a company's output increases, its average fixed cost decreases. Fixed costs remain the same regardless of the number of products produced. As performance improves, the fixed cost contribution per unit decreases.

On the short-term curve, much of the initial downslope is due to lower average fixed costs. Increasing the variable input return at low output levels also plays a role, but the slope is due to the decreasing limit variable input return.

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## Related Questions

The operations manager at a chemical company that produces insecticide for use in commercial applications is attempting to set a safety stock level for a key ingredient that is used in their most powerful product. She believes that demand during lead time for this ingredient is normally distributed based on past data. In addition, she believes that future use is accurately depicted by these historical demand-duringlead-time data (in gallons): 55, 75, 75, 70, 80, 60, 50, 70, 60, and 85. She estimates the standard deviation of demand during the lead time to be 8.5 gallons. a. What is the average demand during the lead time for this key ingredient?
b. What is the safety stock they need to provide a 95% service level?
c. What is the order point the company should use?

a) Average demand during the lead time = Sum of all the historical demand during lead time / Number of periods

= (55+75+75+70+80+60+50+70+60+85) / 10

= 680 / 10

= 68 gallons

At 95% service level,value of Z = 1.65

Safety stock = Z(\sigmadL) = 1.65(8.5) = 14.03 gallons

c) Reorder point = Average demand during the lead time + Safety stock

= 68 + 14.03

= 82.03 gallons

Yakov is skilled at making both bracelets and necklaces. Yakov has no preference between making bracelets or necklaces since he earns the same amount from the two activities. If the selling price of necklaces increases from \$12 to \$24, then Yakov's opportunity cost of making bracelets and making bracelets is now profitable than making necklaces. Suppose that the bracelets market consists of several suppliers like Yakov who are skilled at making both bracelets and necklaces. Which of the following is likely to happen to the supply curve of bracelets when the price of a necklaces increases?a. It shifts to the right
b. It shifts to the left
c. It does not change

Answer:b. It shifts to the left

Explanation:

The supply will increases as price increases and vice versa. When the price increases and supply also increases the supply curves shifts to the right and when the price decreases and supply equally decreases supply curves shifts to the left.

In the above scenario since bracelet and necklace are exclusive products the sellers will be willing to supply more of necklace since the price has increased and less of bracelet since the price has fallen and the fall in price which leads to fall in supply of bracelet will shift bracelet supply curves to the left.

write a response that describes how knowledge of the accounting equation and financial statements discussed in week 1 might be used by the Medical office Manager during normal business activities. Indicate in your answer why you believe this to be so.

The knowledge on basic principles of accounting may be useful for a Medical officer Manager because it allows him to better understand the flow of the business from the transaction to people handling skills during normal business activities. These make it easier for him to get acquainted with what is to be dealt with during normal business talks.

Acitelli Corporation, which applies manufacturing overhead on the basis of machine-hours, has provided the following data for its most recent year of operations.Estimated manufacturing overhead \$ 351,960
Estimated machine-hours 8,400
Actual machine-hours 8,460
The estimates of the manufacturing overhead and of machine-hours were made at the beginning of the year for the purpose of computing the company's predetermined overhead rate for the year.
The applied manufacturing overhead for the year is closest to:_________.
A. \$357,012
B. \$354,474
C. \$355,489
D. \$352,951

B. \$354,474

Explanation:

The Overheads that are initially included in Work In Process before determination of Actual Overheads are called Applied Overheads.

Thus said we need to first determine the Predetermined overhead rate :

= \$ 351,960 /  8,400 machine hours

= \$41.90 per machine hour

Therefore,

Applied Overheads = \$41.90 × 8,460 machine hours

= \$354,474

Conclusion :

The applied manufacturing overhead for the year is closest to: \$354,474

Sprint allocates general plant management costs on the basis of the number of production employees and plant security costs on the basis of space occupied by the production departments. In November, the following overhead costs were recorded: Melting Department direct overhead \$110,000
General plant management 100,000
Plant security 50,000

Other pertinent data follow:

Melting Molding
Number of employees 35 40
Space occupied (square feet) 10,000 20,000
Machine hours 10,000 2,000
Direct labor hours 4,000 20,000

Required:
a. Prepare a schedule allocating general plant management costs and plant security costs to the Melting and Molding Departments.
b. Determine the total departmental overhead costs for the Melting and Molding Departments.

a.

General Plant Management Costs

Cost is \$100,000

These costs are allocated on the basis of number of production employees.

Melting Department employs 35 workers and Molding employs 40 for a total of 75.

Melting Department =

Melting Department = \$46,666,67

Molding Department =

Molding Department = \$53,333.33

Plant Security Costs

Cost is \$50,000

These costs are allocated on the basis of space occupied by the production departments.

Melting Department occupies 10,000ft² and Molding occupies 20,000 ft²  for a total of 30,000 ft²

Melting Department =

Melting Department = \$16,666,67

Molding Department =

Molding Department = \$33,333.33

2. Melting Department

= 110.000 + 46,666.67 + 16,666.67

= \$173,333.34

Molding Department

= 400,000 + 53,333.33 + 33,333.33

= \$486,666.66

Consider the information about the economy of Pakistan. Note that the currency of Pakistan is the rupee. The government purchases: 2.80 trillions of rupees. Individuals consume: 10.50 trillions of rupees. Individuals save: 5.10 trillions of rupees. Businesses invest: 1.30 trillions of rupees. Foreigners spend: 0.64 trillions of rupees to purchase Pakistani firms. Pakistan imports: 2.09 trillions of rupees. Pakistan exports: 1.30 trillions of rupees.

Pakistan's GDP is 13.81 trillions of rupees.

Explanation:

GDP = C + I + G + NX

Here:

C = 10.50

I = 1.30

G= 2.80

NX =  (1.30 - 2.09) = -0.79

GDP = 10.50 + 1.30 + 2.80 - 0.79

GDP = 13.81