Answer:
Date Account Title Debit Credit
March 1 Cash $7,500
Unearned Revenue $7,500
Date Account Title Debit Credit
July 31 Unearned Revenue $7,500
Design Services Revenue $7,500
In March the revenue had not been earned as the work had not been carried out so the revenue will be sent to the Unearned revenue account.
When the designer finishes in July, they can now recognize the revenue so it will be moved from the Unearned revenue account to the proper revenue account.
Exercise 9-15A (Static) Using the current ratio to make comparisons LO 9-7 The following information was drawn from the balance sheets of the Kansas and Montana companies: Kansas Montana Current assets $ 59,000 $ 78,000 Current liabilities 40,000 43,000 Required a. Compute the current ratio for each company. b. Which company has the greater likelihood of being able to pay its bills
Answer:
a. 1.5 and 1.8
b. Montana
Explanation:
Below is the calculation for the current ratio:
a. Formula used, Current ratio = Current assets / Current liabilities
Current ratio of Kansas = 59000 / 40000 = 1.5
Current ratio of Montana = 78000 / 43000 = 1.8
b. The company that has a higher current ratio will have a greater likelihood to pay bills so Montana is the correct answer.
Define the term creativity
Answer:
Creativity is defined as the tendency to generate or recognize ideas, alternatives, or possibilities that may be useful in solving problems, communicating with others, and entertaining ourselves and others.
Answer:
Creativeness is defined as the tendency to generate or recognize ideas, alternatives, or opportunities which can be useful for problem-solving, communication, and for fun with others.
Explanation:
Examples include creative thinking: problem-solving, writing, visual art, communication skills, and openness.
In 2019, website and moving development, web production, user interface, and interaction design as well as design and visual design will be the main fields for creative grabbing.
You have just started a new job and plan to save $5,200 per year for 36 years until you retire. You will make your first deposit in one year. How much will you have when you retire if you earn an annual interest rate of 9.54 percent?
a. $1,331,411.17
b. $1,394,509.68
c. $1,346,423.14
d. $1,268,312.65
e. $1,333,878.83
Answer:
$1,394,509.68
Explanation:
Savings amount = $5200
Period = 36 years
Interest = 9.54 percent
We solve for the future value of the annuity
= $5200[(1+0.0954)³⁶-1/0.0954]
= 5200 x [1.0954³⁶-1/0.0954]
= 5200 x 268.1749
= 1,394,509.681 dollars
Therefore after retirement and at an interest rate of 9.54 percent, you would be earning 1,394,509.681 dollars.
Option b.
A metal fabrication company is buying a CNC machine for $600,000. After 20 years of use, the machine should have a salvage value of $35,000.
Required:
a. Under 100% bonus depreciation, what depreciation can be claimed in year 1?
b. Under 100% bonus depreciation, what depreciation can be claimed in year 2?
Answer:
100% Bonus Depreciation:
a. Year 1 = $565,000
b. Year 2 = $0
Explanation:
a) Data and Calculations:
Cost of CNC Machine = $600,000
Salvage value = $35,000
Depreciable amount = $565,000 ($600,000 - $35,000)
100% Bonus Depreciation:
Year 1 = $565,000
Year 2 = $0
b) The 100% bonus depreciation is not limited to the firm's taxable income. The firm can carry back loss arising from 100% bonus depreciation to previous year's income and also carry any unused loss forward to deduct against future income.
g A wife (30 years old) spends five hours a week sending bills to her husband s customers. She is not paid for her work. She spends the rest of her time as a full-time homemaker. She would be classified as
Answer:
Housewife
Explanation:
In the given case, the wife is giving her time and energy to her husbands business and is not getting paid, thus, she has no monetary or legal relationship with the business. Also, she is a full time homemaker on the side.
Hence she will be classified as a full time homemaker or housewife because she is not getting any monetary benefit for the work she is performing.
Perit Industries has $110,000 to invest. The company is trying to decide between two alternative uses of the funds. The alternatives are:
Project A Project B
Cost of equipment required $110,000 $0
Working capital investment required $0 $110,000
Annual cash inflows $20,000 $68,000
Salvage value of
equipment in six years $8,600 $0
Life of the project 6 years 6 years
The working capital needed for project B will be released at the end of six years for investment elsewhere. Perit Industries’ discount rate is 16%.
Required:
1. Compute the net present value of Project A.
2. Compute the net present value of Project B.
3. Which investment alternative (if either) would you recommend that the company accept?
Answer:
$-32,775.48
$185,710.69
Project B
Explanation:
Net present value is the present value of after-tax cash flows from an investment less the amount invested.
NPV can be calculated using a financial calculator
Only projects with a positive NPV should be accepted. A project with a negative NPV should not be chosen because it isn't profitable.
When choosing between positive NPV projects, choose the project with the highest NPV first because it is the most profitable.
Project A
Cash flow in year 0 = -$110,000
Cash flow in year 1 - 5 = $20,000
Cash flow in year 6 = $20,000 + $8,600 = 28,600
I = 16%
NPV = $-32775.48
Project B
Cash flow in year 0 = -$110,000
Cash flow in year 1 - 5 = $68,000
Cash flow in year 6 = $68,000 + $110,000 = $178,000
I = 16%
NPV = $185,710.69
Project B should be chosen because its NPV is positive
To find the NPV using a financial calculator:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. after inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.
3. Press compute
On January 7, stockholders invest $45,000 in JumpStart in exchange for common stock. Provide the journal entry for this transaction.
Answer:
Dr Cash $45,000
Cr Common stock $45,000
Explanation:
Preparation of the journal entry
Based on the information given the appropriate Journal entry On January 7 since the stockholders invest the amount of$45,000 in JumpStart in exchange for common stock will be:
January 7
Dr Cash $45,000
Cr Common stock $45,000
(To record investment in JumpStart)
Sunland Company took a physical inventory on December 31 and determined that goods costing $200,000 were on hand. Not included in the physical count were $24,840 of goods purchased from Pelzer Corporation, f.o.b. shipping point, and $21,960 of goods sold to Alvarez Company for $30,630, f.o.b. destination. Both the Pelzer purchase and the Alvarez sale were in transit at year-end. What amount should Sunland report as its December 31 inventory
Answer:
$246,800
Explanation:
Calculation to determine What amount should Sunland report as its December 31 inventory
Using this formula
Ending inventory = Inventory count as per physical count + Inventory in transit FOB Shipping point (Purchases) + Inventory in transit FOB destination (Sales)
Let plug in the formula
Ending inventory= $200,000 + $24,840+ $21,960
Ending inventory= $246,800
Therefore What amount should Sunland report as its December 31 inventory is $246,800
Prepare journal entries to record each of the following transactions. The company records purchases using the gross method and a perpetual inventory system.
Sept. 15 Purchased merchandise with an invoice price of $77,500 and credit terms of 3/5, n/15.
Sept. 29 Paid supplier the amount owed on the September 15 purchase.
Answer and Explanation:
The journal entries are shown below;
On Sept 15
Merchandise inventory $77,500
To Accounts payable $77,500
(Being purchase of inventory is recorded)
On Sep 29
Accounts payable $77,500
To Cash $75,175
To Merchandise inventory (3% of $77,500 ) $2,325
(Being payment to suppliers after discount is recorded)
The Metropolitan Bus Company (MBC) purchases diesel fuel from American Petroleum Supply. In addition to the fuel cost, American Petroleum Supply charges MBC $225 per order to cover the expenses of delivering and transferring the fuel to MBC's storage tanks. The lead time for a new shipment from American Petroleum is 10 days; the cost of holding a gallon of fuel in the storage tanks is $0.03 per month, or $0.36 per year; and annual fuel usage is 180,000 gallons. MBC buses operate 288 days a year.
Required:
a. What is the optimal quantity for MBC?
b. How frequently should MBC order to replenish the gasoline supply?
c. The MBC storage tanks have a capacity of 15,000 gallons. Should MBC consider expanding the capacity of its storage tanks?
d. What is the recorder point?
Answer:
A. 15,000
B. 12 times
C. No Need Of Expanding the storage tanks
D. 6,250 gallons
Explanation:
a. Calculation to determine the optimal quantity for MBC
Using this formula
Optimal quantity=√2×Demand quantity×Ordering cost÷Holding cost
Let plug in the formula
Optimal quantity=√2×180,000×$225÷$0.36
Optimal quantity=√225,000,000
Optimal quantity=15,000
Therefore the optimal quantity for MBC is 15,000
b. Calculation to determine How frequently should MBC order to replenish the gasoline supply
Using this formula
MBC order=Demand quantity÷ Economic Ordering quantity
Let plug in the formula
MBC order=180,000÷15,000
MBC order=12 times
Therefore How frequently should MBC order to replenish the gasoline supply will be 12 times
c.) If The MBC storage tanks have a capacity of 15,000 gallons there is NO NEED OF EXPANDING the storage tanks reason been that the OPTIMAL ORDER QUANTITY is 15,000 which is the same with MBC's tank storage capacity.
d. Calculation to determine the reorder point
Using this formula
Reorder point = Lead time× Average demand quantity
Where,
Lead time=10 days
Average Demand Quantity=180,000/$288
Average Demand Quantity=625
Let plug in the formula
Reorder point =10 days*625
Reorder point=6,250 gallons
Therefore Reorder point is 6,250 gallons
Which business unit could have its shares quoted on the stock exchange?
Answer:
To promote trading of its stock, a corporation may choose to list its shares on a stock exchange. Apple, Walmart and Ford are high-profile publicly traded corporations, but smaller companies also trade on the major exchanges.
Economists look at any situation in terms of its component parts: the people making decisions, the environment in which they're making those decisions, and the goods or services being exchanged. For example, think about doing your laundry. Which of the following laundry-related items are nondurable goods?
a. A washing machine
b. Having a pair of pants dry-cleaned
c. A T-shirt
d. A clothes dryer
Any help 75 points
Quantity supplied varies positively (directly) with price, other things constant, as price rises, the quantity supplied rises; as price falls, the quantity supplied decreases
Answer:
law of supply
Explanation:
this is the law of supply
Four fundamental factors affect the cost of money:
1. The return that borrowers expect to earn on their investments
2. The preference of savers to spend their income in the current period rather than delay their consumption until some future period
3. The risks associated with the investment
4. Expected inflation
Consider the following statements that address these factors, and indicate if you think each statement is true or false.
Statement
True
False
Investments providing cash flows that are more likely to equal their expected value are said to exhibit more risk.
The actual relationship between the risk-free rate of return (r*r*) and the expected future inflation rate or inflation premium (IP) is actually multiplicative—that is, [(1 + rRFrRF) x (1 + IP)] – 1—but it is often simplified to reflect an additive relationship.
All things being equal, rational savers and investors prefer to invest in an asset that provides a 12% return rather than one that provides an 8% return.
All things being equal, savers and investors prefer more risk to less risk and prefer lower risk premiums on projects exhibiting higher levels of risk.
On average and everything else held constant, an investment that can provide a 4% return should attract more investment capital from savers/investors than an otherwise identical investment that can generate a 12% return.
Answer:
True statement is:
All thing being equal, savers and investors prefer more risk to less risk and prefer lower risk premiums on projects exhibiting higher levels of risk.
Explanation:
Investors wish to receive less risk and more return. They prefer from more risk to lesser risk and receive risk premium on project that exhibit higher level of risk and delayed compensation. A project with 12% return will be more riskier than a project with 8% return. Rate of return increases as the level of risk increases.
Park uses a perpetual inventory system. Determine the cost assigned to ending inventory and to cost of goods
sold using (a) specific identification, (b) weighted average, (c) FIFO, and (d) LIFO. (Round per unit costs to
three decimals, but inventory balances to the dollar.) For specific identification, ending inventory consists of
225 units, where 90 are from the March 30 purchase, 80 are from the March 20 purchase, and 55 are from
beginning inventory.
Answer:
below
Explanation:
The price attributed to final inventory and cost of goods sold is specific identification.
Explain about the specific identification?The method of precise identification concerns inventory valuation, specifically keeping track of each individual stock item and allocating costs per item rather than collectively. A company is functional and usable when it can identify, mark, and keep track of each item or unit in its inventory.
To track individual inventory items, the specific identification method is used. When individual items can be clearly identified, such as when they have a serial number, stamped receipt date, bar code, or RFID tag, this method is appropriate.
Employed by businesses like furniture shops, car dealerships, jewellery shops, and art galleries, among others. The main characteristic that sets the specific identification method apart from LIFO and FIFO techniques is individual tracking.
To learn more about specific identification refer to:
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Five years ago, when the relevant cost index was 120, a nuclear centrifuge cost $40,000. The centrifuge had a capacity of separating 1500 gallons of ionized solution per hour. Today, it is desired to build a new centrifuge with capacity of 4500 gallons per hour, but the cost index now is 300. Assuming a power sizing exponent to reflect economies of scale, x, of 0.75, use the power sizing model to determine the approximate cost (expressed in today's dollars) of the new reactor.
Answer:
The approximate cost (expressed in today's dollars) of the new reactor is $227,950.71.
Explanation:
This can be calculated as follows:
Cost of centrifuge with 4500 capacities 5 years ago / Cost of centrifuge with 1500 capacities 5 years ago = (Capacity of centrifuge with 4500 capacities / Capacity of centrifuge with 1500 capacities)^Power sizing exponent
Cost of centrifuge with 4500 capacity 5 years ago / $40,000 = (4500 / 1500)^0.75
Cost of centrifuge with 4500 capacities 5 years ago / $40,000 = 2.27950705695478
Cost of centrifuge with 4500 capacities 5 years ago = 2.27950705695478 * $40,000 = $91,180.28
Therefore, we have:
Cost of centrifuge with 4500 capacities now = (Cost index now / Cost index 5 years ago) * Cost of centrifuge with 4500 capacities 5 years ago = (300 / 120) * $91,180.28 = $227,950.71
Therefore, the approximate cost (expressed in today's dollars) of the new reactor is $227,950.71.
Your mayor just announced that the local unemployment rate dropped from 10.5% to 10.4% from the prior month. Evaluate the unemployment rate drop and discuss whether there is enough information to determine significance. Support your response with specific examples. In replies to peers, discuss whether you agree or disagree with their assessments and justify your response
Answer:
Not enough information
Explanation:
from this question, this mayor has only given us the estimated proportion of the rate of unemployment for these months. In order to know if it is significant or not, we have to carry out other tests such as the hypothesis testing for the population proportion. But here we do not have any sample data or population data with which we can use to test this significance. The sample size is unknown so we cannot proceed to test if the claim is significant or not.
Beaverton Lumber purchased a milling machine for $35,000. In addition to the purchase price, Beaverton made the following expenditures: freight, $1,500; installation, $3,000; testing, $2,000; personal property tax on the machine for the first year, $500. What is the initial cost of the machine?
Answer:
$41,500
Explanation:
Calculation to determine What was the initial cost of the machine to be capitalized
Purchase price $35,000
Add Freight $1,500
Add Installation $3,000
Add Testing $2,000
Total Cost $41,500
Therefore the initial cost of the machine is $41,500
Select the correct point on the graph. Which point on the graph indicates the lowest quantity supplied of goods?
Answer:
Point A
Explanation:
The supply curve given above shows the correlation between the cost of goods (on the vertical axis) and quantity of goods supplied (on the horizontal axis).
From the graph, we can see that as the price of the goods increases, the quantity that is supplied in pounds also increases, and vice versa.
The lowest price correlates with the lowest quantity supplied. Therefore, at point A on the graph, we have the lowest quantity supplied of goods.
Why irish lions rugby playing with Japan?
Answer:
I expect the answer in the following form
Explanation:
Irish lions play with Japan to get better and learn new things
ne implication from the evidence on EI to date is that employers should consider it a factor in hiring employees, especially in jobs that demand ________. good mathematical skills good critical thinking skills good analytical skills the ability to work independently a high degree of social interaction
Answer:
a high degree of social interaction
Explanation:
Emotional intelligence can be regarded as "emotional quotient" It is been defined as the ability to understand as well as to use and manage one's emotions in positive ways so that individual can be relieve of stress or communicate effectively with others or express empathize with others. With Emotional intelligence individual can overcome challenges as well as defusing conflict. Emotional intelligence (EI) can be regarded as concept which is moderately correlated with job performance.
Components of Emotional intelligence are;
✓Social skills.
✓Self-awareness.
✓Motivation.
✓Empathy.
✓Self-regulation.
It should be noted that One implication from the evidence on EI to date is that employers should consider it a factor in hiring employees, especially in jobs that demand a high degree of social interaction.
Using the data below for Ace Guitar Company: Region A Region B Sales $786,500 $643,500 Cost of goods sold 298,900 244,500 Selling expenses 188,800 154,400 Service department expenses Purchasing $240,200 Payroll accounting 160,200 Allocate service department expenses proportionally to the sales of each region, determine the divisional income from operations for the Regions A and B. For interim calculations, round the percentages to one decimal place. Region A $fill in the blank 1 Region B $fill in the blank 2
Solution :
Calculation of income from operations
Sales Region A Region B
Cost of goods sold 643,500 786,500
Selling expenses 244,500 298,900
Service department expenses 154,400 188,800
Purchasing (working note - 1) 108,090 132,110
Payroll accounting (working note - 2) 72,090 88,110
Income from expenses $ 64,420 $ 78,580
Working note 1
Allocation of purchasing expenses:
A region = [tex]$240,200 \times \frac{643500}{(643500+786500)}$[/tex]
= $ 108,090
B region = [tex]$240,200 \times \frac{786500}{(643500+786500)}$[/tex]
= $ 132,110
Working note 2
Allocation of payroll accounting expenses.
A region = 160200 x 0.45 (sales ratio)
= $ 72,090
B region = 160,200 x 0.55 (sales ratio)
= $ 88,110
Some of your senior employees have started changing important information in a new call script. Newer employees have noticed, and some have started doing the same. What would you do? Select all that apply.
A Allow the senior employees to go off script since they have more experience
B Practice using the new script during your weekday team meeting
C Discipline those who don't follow the script
D Give written warnings to the senior employees
E Require all of the newer employees attend additional training
Give written warnings to the senior employees
Use this information for Mason Corporation to answer the question that follow. Mason Corporation had $1,114,000 in invested assets, sales of $1,281,000, income from operations amounting to $209,000, and a desired minimum return of 15%. Round your answer to two decimal places. The investment turnover for Mason Corporation is a.1.38 b.1.15 c.1.72 d.0.92
Answer:
b.1.15
Explanation:
The computation of the investment turnover is shown below:
= Sales ÷ average operating assets
= $1,281,000 ÷ $1,114,000
= 1.1499
= 1.15
hence, the investment turnover is 1.15
Therefore the option b is correct
The same should be considered and relevant
Martin Company manufactures a powerful cleaning solvent. The main ingredient in the solvent is a raw material called Echol. Information concerning the purchase and use of Echol follows:
Purchase of Echol Echol is purchased in 15-gallon containers at a cost of $115 per container. A discount of 2% is offered by the supplier for payment within 10 days, and Martin Company takes all discounts. Shipping costs, which Martin Company must pay, amount to $130 for an average shipment of 100 15-gallon containers of Echol.
Use of Echol The bill of materials calls for 7.6 quarts of Echol per bottle of cleaning solvent. (Each gallon contains four quarts.) About 5% of all Echol used is lost through spillage or evaporation. In addition, statistical analysis has shown that every 41st bottle is rejected at final inspection because of contamination.
Required:
a. Compute the standard purchase price for one quart of Echol.
b. Compute the standard quantity of Echol (in quarts) per salable bottle of cleaning solvent.
c. Using the data from (1) and (2) above, prepare a standard cost card showing the standard cost of Echol per bottle of cleaning solvent.
Answer: a. $1.90
b. 8.2 quarts
c. $15.58
Explanation:
a. Compute the standard purchase price for one quart of Echol.
Cost per 15 gallon container = $115
Less: Cash discount= 2% × $115 = $2.30
Net cost = $115 - $2.30 = $112.70
Add: Shipping cost = $139/100 = $1.30
Total cost = $112.70 + $1.30 = $114
Number of quarts per container = (15 × 4) = 60
Standard cost per quart = $114/60 = $1.90
b. Compute the standard quantity of Echol (in quarts) per salable bottle of cleaning solvent.
Content per bill of materials = 7.6 quart
Add: Allowance for evaporation and spillage = 8.0 - 7.6 = 0.4 quart
Add: Allowance for rejected unit = 8.0/40 = 0.2 quarts
Standard quantity of Echol per salable bottle of cleaning solvent = 7.6 + 0.4 + 0.2 = 8.2 quarts
c. Using the data from (1) and (2) above, prepare a standard cost card showing the standard cost of Echol per bottle of cleaning solvent.
This will be:
= 8.2 quart × $1.90 per quart
= $15.58
The personality and unique character of a group is best known as its ________ and includes the group's assumptions, values, beliefs, norms, ideologies, and the structure of its social, political, economic, and religious institutions.
A) group potency
B) group entitativity
C) group identity
D) culture
Answer:
d as its not any of the others and culture makes most sense
Explanation:
If the dollar contribution margin per unit is increased by 10%, total fixed expenses is decreased by 20%, and all other factors remain the same, net operating income will:
Answer:
Operating profit increases by $11,000
Explanation:
Missing word "A company has provided the following data: Sales 3,000 units Sales Price $70 per unit Variable Cost $50 per unit Fixed Cost $25,000"
Particulars Status quo
Sales $210,000 (3000*70)
Less: Variable cost $150,000 (3000*50)
Contribution margin $60,000
Less: Fixed costs $25,000
Operating profit $35,000
Alternate profit = Alternate contribution margin - Alternate fixed cost
Alternate profit = [(Status quo contribution margin + %change) − (Alternate fixed cost-%change)]
Alternate profit = ($60,000+10%)−($25,000−20%)
Alternate profit = $46,000
Change in profit = Alternate profit - Status quo profit
Change in profit = $46,000 - $35,000
Change in profit = $11,000
So, the operating profit increases by $11,000
Chad, who owns the only coffee shop in Rivercity, learns that Jose is about to open a competing coffee shop in the same small town, just a few blocks from Chad's. Chad offers Jose $10,000 in return for Jose's promise not to open a coffee shop in the Rivercity area for six months. Jose accepts the $10,000 but goes ahead with his plans, even though he had agreed not to do so. When Jose opens his coffee shop for business, Chad sues to enjoin Jose's continued operation or to recover the $10,000
Required:
Can Chad sues Jose?
Answer:
Rivercity Coffee Shop
Chad cannot sue Jose. The $10,000 is paid to Jose is a bribe. Since a bribe is not legal, it cannot form the basis for an enforceable contract.
Moreover, the offer by Chad is an antitrust and anti-competition consideration that is legally frowned upon. illegal contract
Explanation:
For a contract to be enforceable, it cannot be illegal. A bribe is illegal. The basis for the contract is illegal. Therefore, Chad cannot sue Jose. Since Jose decided to breach the contract, neither Chad nor Jose is entitled to any compensation. Jose cannot be held liable for non-performance.
PART A. MULTIPLE CHOICE - 15 MARKS
1. Company orientation does not include which topic below?
Economic Factors
b. Fringe Benefits
C. Occupational Health and Safet
d. None of the above
what is the answer?
Answer: a. Economic factors
Explanation:
Company orientation refers to training that is given to new employees to better prepare them to work in the company and be as efficient as possible.
It includes things like occupational health and safety so that the employee may know how best to behave so as not to cause accident or get injured by one. It also includes telling the employees of the various fringe benefits that might accrue to them.
It would not include economic factors as these as not specific to the company.
Alpha and Beta, two tiny islands in the Pacific, produce pearls and pineapples. The following production possibilities schedules describe their potential output in tons per year:
ATTACHMENT IS BELOW
Suppose Alpha and Beta agree that the terms of trade will be one for one and exchange 10 pearls for 10 pineapples.
a. If Alpha produced 6 pearls and 15 pineapples while Beta produced 30 pearls and 8 pineapples before they decided to trade, how many pearls would each be producing after trade? Assume that the two countries specialize according to their comparative advantage.
(i) Alpha: _____ pearls
(ii) Beta: _____ pearls
b. How much would the combined production of pineapples increase for the two islands due to specialization?
_____ pineapples
c. How much would the combined production of pearls increase?
_____ pearls
d. What is the post-trade consumption for each island?
Alpha consumes _____ pearls and ______ pineapples.
Beta consumes ______ pearls and ______pineapples.
Answer:
The opportunity cost of pearls for A is 2.5 pineapples and the opportunity cost of pearls for A is 0.27.
Explanation:
If Alpha produced 6 pearls and 15 pineapples, while B produced 30 pearls and 8 pineapples before the trade, we can calculate the opportunity cost for each island. For island Alpha, their opportunity cost will be:
6 pearls = 15 pineapples
1 pearl = 15/6 pineapples
1 pearl = 2.5 pineapples
Therefore, the opportunity cost of pearls for A is 2.5 pineapples
For island Beta, their opportunity cost will be:
30 pearls = 8 pineapples
1 pearl = 8/30 pineapples
1 pearl = 0.27 pineapples
Therefore, the opportunity cost of pearls for A is 0.27 pineapples
b)
It appears that A will increase production of pineapples from 15 pineapples to 25 pineapples, and due to their opportunity cost, will decrease pearl production from 6 pearls to 2 pearls
It appears that B will increase the production of pearls from 30 pearls to 40 pearls, and due to their opportunity cost, will decrease pineapple production from 8 pineapples to 4 pineapples.
