Kando company incurs a $11.00 per unit cost for product a, which it currently manufactures and sells for $13.50 per unit. instead of manufacturing and selling this product, the company can purchase it for $6.00 per unit and sell it for $11.30 per unit. if it does so, unit sales would remain unchanged and $6.00 of the $11.00 per unit costs of product a would be eliminated.
1. prepare incremental cost analysis. should the company continue to manufacture product a or purchase it for resale? (round your answers to 2 decimal places.)
in the format below:
manufacture a purchase product b
sales
costs
aviodable cost
unavoidable costs
cost to purchase
totals costs
sales
the company

Required prepare the necessary adjusting entries in the general journal as of december 31, assuming the following: on september 1, the company entered into a prepaid equipment maintenance contract. birch company paid $3,400 to cover maintenance service for six months, beginning september 1. the payment was debited to prepaid maintenance. supplies on hand at december 31 are $3,900. unearned commission fees at december 31 are $7,000. commission fees earned but not yet billed at december 31 are $3,500. (note: debit fees receivable.) birch company's lease calls for rent of $1,600 per month payable on the first of each month, plus an annual amount equal to 1% of annual commissions earned. this additional rent is payable on january 10 of the following year. (note: be sure to use the adjusted amount of commissions earned in computing the additional rent.)

Match each of the terms below with an example that fits the term. a. fungibility the production of gasoline b. inelasticity the switch from coffee to tea c. non-excludability the provision of national defense d. substitution the demand for cigarettes

Which of the following has the largest impact on opportunity cost