...------------------------------------------------- Supply and demand The price P of a product is determined by a balance between production at each price (supply S) and the desires of those with purchasing power at each price (demand D). The diagram shows a positive shift in demand from D1 to D2, resulting in an increase in price (P) and quantity sold (Q) of the product. Supply and demand is an economic model of price determination in a market. It concludes that in a competitive market, the unit price for a particular good will vary until it settles at a point where the quantity demanded by consumers (at current price) will equal the quantity supplied by producers (at current price), resulting in an equilibrium of price and quantity. The four basic laws of supply and demand are:[1] 1. If demand increases and supply remains unchanged, then it leads to higher equilibrium price and quantity. 2. If demand decreases and supply remains unchanged, then it leads to lower equilibrium price and quantity. 3. If supply increases and demand remains unchanged, then it leads to lower equilibrium price and higher quantity. 4. If supply decreases and demand remains unchanged, then it leads to higher price and lower quantity. ------------------------------------------------- The graphical representation of supply and demand The supply-demand model is a partial equilibrium model representing the determination of the price of a particular good and the quantity of that...
Words: 1811 - Pages: 8
...interest. On New Year’s Day, after deciding to be your own boss, you quit your job, evict your tenants, and use your financial assets to establish a pogo-stick shop. At the end of the year, your accountant gives you the following information: * Total revenue = $180,000 * Expenses: * Cost of pogo sticks = $75,000 * Employees’ wages = $40,000 * Utilities = $6000 * Taxes = $7,000 * Advertising expenses = $7500 Answer the following questions: a. What are your explicit costs? Cost of pogo sticks 75,000 Employees wages 40,000 Utilities 6000 Taxes 7000 Advertising 7500 Total = 135,500 b. What is your accounting profit? Total revenue – total expenses = accounting profit 180,000 – (75,000 + 40,000 + 6,000 + 7,000 + 7,500) 180,000 – 135,500 = 44,500 Accounting Profit = 44,500 c. What are your implicit costs? 50,000 annual salary as an assistant store manager 14,400 yearly income of building rental 5000 per year of interest earned on financial assets 69,400 total implicit costs d. Explain why the reasoning for considering these implicit costs – after all, you didn’t actually have to pay them in cash. e. What is your economic profit? f. Was starting the pogo-stick shop a good financial decision why or why not? #2. (20 pts) Fill in the following table and answer the questions that follow: Units Produced (Q) | Total Benefits B(Q) | Total Costs C(Q) | Net BenefitsN(Q) | Marginal Benefit MB(Q)...
Words: 799 - Pages: 4
...management accounting systems Ran Tao Introduction Accounting is the process of identifying, measuring and communicating financial information about an entity to permit informed judgments and decisions by users of the information. (Weetman, 2010) Management accounting is a specialist branch of accounting which has developed to serve the particular needs of management. It helps companies to formulate business strategies and make right business decisions. Many different kinds of management accounting systems are available, some include cost-accounting system, job-costing system and inventory management system. In order to make a smart business decision, it is important to select an appropriate management accounting system that integrates with the company’ financial accounting system. Management accounting innovations and origins An innovation is the successful introduction of an idea perceived as new into a given social system, management accounting innovations involve a set of design characteristics. (Hopper, 2007) The innovation aspects consist of for example types of cost objects, financial or non-financial data and allocation bases. If a proposed system leads to better decisions than the existing system, and the expected benefits from the proposed system exceed the cost of implementation, the new system is adopted. (Feltham, 1972; Demski, 1980) In this case, innovative management accounting system is adopted in many businesses. Management accounting change can...
Words: 1631 - Pages: 7
... Explicit costs would be the accounting costs listed =$628,000. Implicit costs are defined as nonmonetary opportunity costs. = $15,000 (this is potential gain in stocks) + 175,000 (salary) = $190,000 The economic costs would be the total of explicit plus implicit $818,000 b) What is accounting profit in 2010? The income statement shows the profit listed as $177,000. c) What is the economic profit in 2010? Economic profit would be accounting profit minus implicit costs. That would be: $177,000 minus $190,000. d) In reviewing the decision to leave his job and start Sound Devices the recent numbers will show a profit or a loss. A positive economic profit which means that he made the right decision. A negative economic profit would mean that he made the wrong decision. Chapter 2 Problem 2 a) The price of oranges will increase. The supply of oranges will decrease due to the destruction. b) The price of oranges will decrease. The supply of oranges will decrease. c) More demand for orange juice, Price will increase for oranges, Supply will be ready. d) Grapefruit may or may not have an effect. Maybe the price and supply will decrease. Problem #4 a) Air Travel demand will decrease. Price will increase. b) Hotel prices will increase, demand will increase. c) Rental Cars will increase, demand will increase. d) The supply of overnight mail will increase. explicit costs would be the accounting costs listed (minus income taxes...
Words: 306 - Pages: 2
...in Accountancy as Major Charlotte Jhiza A. Beleno Adamson University Abstract The need for accounting graduates continually grows in this decade. The US Bureau of Statistics projected that there will be a 15.7% increase in the number of accounting jobs between 2010 and 2020. This increase in demand gives the importance to study and understand the factors that motivate and encourage students to take up Bachelor of Science in Accountancy as their college course, so that quality graduates will meet the demand in the field of accounting profession. This paper also helps high school teachers, parents and guidance counselors on how they can influence students to take up BS Accountancy in their tertiary level. On the other hand, it also informs the students on the advantages of being accountancy major and an accountant in the future. Factors Affecting Students’ Choice of Bachelor of Science in Accountancy as Major A Review of Related Literature and Studies Accounting as defined by Webster is the system of recording and summarizing business and financial transactions and analyzing, verifying and reporting the results. On the other hand, Accountancy is the profession or practice of accounting. Bachelor of Science in Accountancy prepares students for careers in accounting firms, financial institutions, public sectors, and financial departments of companies. It is an in demand course since there is an upward trend and opportunities to accountancy graduates and these graduates...
Words: 2643 - Pages: 11
...Section A: Fundamentals of Accounting (60 Marks) 1. Theoretical Framework: (i) Meaning and Scope of Accounting, (ii) Accounting Concepts, Principles and Conventions, (iii) Accounting Standard – concepts, objectives, benefits, (iv) Accounting Policies and (v) Accounting as a measurement discipline – valuation principles, accounting estimates. 2. Accounting Process: Books of Accounts leading to the preparation of Trial Balance, Capital and revenue expenditure, Capital and revenue receipts, Contingent assets and contingent liabilities, Fundamental errors including rectifications thereof. 3. Bank reconciliation Statement. 4. Inventories: Basis of inventory valuation and record keeping. 5. Depreciation Accounting: Methods, computation and accounting treatment of depreciation, Change in depreciation methods. 6. Preparation of Final Accounts for Sole Proprietors. 7. Accounting for Special Transactions: (a) Consignments, (b) Joint Ventures, (c) Bills of exchange and promissory notes, (d) Sale of goods on approval or return basis. 8. Partnership Accounts: Final accounts of partnership firms – Basic concepts of admission, retirement and death of a partner including treatment of goodwill. 9. Introduction to Company Accounts: Issue of shares and debentures, forfeiture of shares, re-issue of forfeited shares, redemption of preference shares. Section B: Mercantile Law (40 Marks) 1. The Indian Contract Act, 1872: An overview of Sections 1 to 75 covering the general nature of contract...
Words: 803 - Pages: 4
...Accounting Career Option Alycia Morrison Strayer University Accounting Career Option Career Options for accountants Based on The Bureau of Labor Statistics, the demand for accountants will increase to 16% by 2020. The statistics are higher than the average U.S. career growth expectation by 2020 (Bureau of Labor Statistics, U.S.A., 2012). As part of the government provisions, every company struggle to keep the minimum number of accountants. However, the banking sector has emerged another giant employer for the professionals. The banking sector employee accountants to examine their financial statements, balance sheets, accounting systems, financial records, tax returns, and monitor their accounting systems. Additionally, Banks employ bachelor degree holders and post graduate candidates to become their auditors. Finally, accountants are employed to manage various financial departments such as taxation department, Hedge funds, and mutual fund accountants (Survey of American industry and careers, 2012). In the education sector, accounting staff are running out of supply. This has resulted from high demand of the employees in both private and public financial instructions (Bureau of Labor Statistics, U.S.A., 2012). Accountants find themselves in dilemma between pursuing financial management and spreading their knowledge in classrooms. Despite the completion, education sector employ a significant number of accountants (Survey of American industry and careers, 2012)...
Words: 371 - Pages: 2
...Accounting regulation The Learning Objectives for this lecture: Regulatory framework Role of a conceptual framework Current state of play of conceptual framework for international standards Different approaches to accounting regulation •Free-market approach EMH Agency theory •Regulatory approach market mechanisms will not be able to achieve a socially optimal equilibrium price for accounting information Theory of efficient markets • The forces of supply and demand influence market behaviour and help keep markets efficient This applies to the market for accounting information and should determine what accounting data should be supplied and what accounting practices should be used to prepare it • Theory of efficient markets Cont • • • • • • The market for accounting data is not efficient The „free-rider‟ problem distorts the market Users cannot agree on what they want Accountants cannot agree on procedures Firms must produce comparable data The government must therefore intervene Theories Of Regulation • • • Accounting information is a „public good‟ Therefore some argue it is likely to be underproduced without regulation Others suggest supply would exist without regulation • There are competing theories regarding the need for and intention of regulation Defining Regulation “[R]egulation is the policing, according to a rule, of a subject‟s choice of activity, by an entity not directly party to or involved in the activity.” • Elements of...
Words: 1192 - Pages: 5
...Introduction to Economics Course outline Instructor/ teaching assistants details Details | Instructors name | Ayesha Samie | Email address | ayesha_samie@yahoo.com | Counseling hours | | Teaching assistants name | Uroosa Jeelani | Email address | uroosaj@gmail.com | Tutorial timings and days | Thursday 12:45-13:45 | About the course. This course will teach students the basic tools of microeconomics and macroeconomics issues such as price determination, supply and demand, consumer behavior, costs of production and market structures growth, inflation, unemployment, interest rates, exchange rates, technological progress, budget and trade deficits. The course will provide a unified framework to address these issues and to study the impact of different policies, such as monetary and fiscal policies, on the aggregate behavior of individuals. Evaluation of Student Performance: | Weightage in grade | Hourlies | 30% (15% of each hourly) | Final exam | 30% | Assignments/presentations/quizzes | 25% | Class Participation | 15% | Total | 100 | Description of each component: * The term exams (hourlies) and final exam will be conducted as per the rules set by IBA. There will be no makeup exams, unless instructed. All IBA rules of examination apply to undertaking the exam * Assignments will be split in class assignments and home assignments. Class assignments must be handed over to the instructor at the end of the class (unless otherwise)...
Words: 2405 - Pages: 10
...quadruple. 3. If the supplies of capital and labor are fixed and technology is unchanging, then real output is: A. fixed. B. determined by demand. C. uncertain. D. subject to wide fluctuations. 4. If a production function has the property of diminishing marginal product, then doubling: A. all of the inputs will less than double the output. B. all of the inputs will double the output. C. all of the inputs will more than double the output. D. one of the inputs will reduce its marginal product. 5. Consider the following production table: Assuming that the production function displays constant returns to scale, what is the marginal product of labor when labor and capital are both equal to 1,000? A. 1 B. 5 C. 10 D. 20 6. Consider the following production table: By how much does the marginal product of labor decrease as labor input increases from 1 to 2 and from 2 to 3? A. 0 B. 1 C. 2 D. 3 7. Euler's theorem implies that if a production function exhibits constant returns to scale, then: A. economic profit is zero. B. accounting profit is zero. C. the marginal product of labor equals the real wage. D. the marginal product of capital equals the real interest rate. 8. If a firm with a constant returns to scale production function pays all factors their marginal products, then: A. economic and accounting profits are both zero. B. economic profit is zero and accounting profit is positive....
Words: 1264 - Pages: 6
...THE IMPACT OF SUPPLY CHAIN MANAGEMENT ON GOVERNMENT INSTITUTIONS A Research Dissertation by GEORGE FREDERICK JACOBSON STUDENT NO. 94032512 B. TECH: PURCHASING MANAGEMENT Submitted in partial fulfilment of the requirements for the degree MBA in the Business School Faculty of Management Sciences TSHWANE UNIVERSITY OF TECHNOLOGY Supervisor: Prof. J A Watkins Pretoria 4 June 2007 PUBLICATION OF DISSERTATION The attention of the reader is specifically drawn to the fact that the national Government departments, who sanctioned this research study, specifically requested that the work should not be published due to the sensitivity of ongoing remedial actions. DECLARATION OF COPYRIGHT I hereby declare that this dissertation submitted for the degree (Magister Technologia) at the Tshwane University of Technology, is my own original unaided work and has not previously been submitted to any other institution or higher education. I further declare that all sources cited are cited or quoted are indicated or acknowledged by means of a comprehensive list of references. G.F. JACOBSON Copyright© Tshwane University of Technology (2007) i DEDICATION This study is dedicated to my family and friends for their love and support through this process allowing me to grow as a person. ii ACKNOWLEDGEMENTS I would like to express my sincere gratitude and appreciation to the following: My Lord and Saviour, Jesus Christ for His continued blessings...
Words: 23698 - Pages: 95
...cited by the National Institute on Alcohol Abuse and Alcoholism (NIAAA) betrays a soft underbelly of accounting assumptions. The latest estimate of over 148 billion dollars is indefensible in terms of modern accounting principles Prof. David J. Hanson, Ph.D. (1997). This cost does not reflect the cost of emotion, when a drunk driver kills an innocent person or the abusing parent to their child can last a life time. Alcohol abuse not only does massive amounts of damage to everyone around it but also can do even more damage to your body. Alcohol poisoning leads to health costs, medication, going to therapy. The costs transfer over into the work environment leading to production losses and loses to close friends. Not only are you losing your health but you can lose a child from premature death. Alcohol abuse can lead to the marginal principle of keeping hospitals staff one hour longer on the weekend due to higher alcohol related problems after midnight. How can we stop alcohol abuse? Solutions to Alcohol Abuse First, make things simpler and focus on the problem, there’s too much alcohol available and it’s being abused. Solution, limit the amount available. This would first start with isolating the variables, going into an alcohol store and measuring the amount ordered then cutting the order in half while multiplying prices by two. Now we have less supply and less demand. This limit will set off a trend around the community and start to lower the abuse of alcohol. ...
Words: 1018 - Pages: 5
...Microeconomics Exam II Study Questions | | [pic] |1. |If S and D are the initial supply and demand curves, after the tax represented by S', is imposed, the equilibrium price is the | | |distance | |A) |0M. | |B) |0E. | |C) |0A. | |D) |0G. | |E) |GE. | |2. |If S and D are the initial supply and demand curves, after the tax represented by S', is imposed, the equilibrium quantity is | | |the distance | |A) ...
Words: 287 - Pages: 2
...|Management Sciences | |Sr. No. |Core Areas |Percentage | |1. |Finance |10% | |2. |Accounting |10% | |3. |Marketing |15% | |4. |Management |15% | |5. |Business Maths |10% | |6. |Business Statistic |10% | |7. |HRM |10% | |8. |Business Communication and Report Writing |10% | |9. |Micro Economics ...
Words: 825 - Pages: 4
... On New Year’s Day, after deciding to be your own boss, you quit your job, evict your tenants, and use your financial assets to establish a pogo-stick shop. At the end of the year, your accountant gives you the following information: +20 pts * Total revenue = $180,000 * Expenses: * Cost of pogo sticks = $75,000 * Employees’ wages = $40,000 * Utilities = $6000 * Taxes = $7,000 * Advertising expenses = $7500 Answer the following questions: a. What are your explicit costs? My explicit cost are: Cost of pogo sticks = $75,000 Employee’s wages = $40,000 Utilities = $6,000 Taxes = $7,000 Advertising = $7,500 Total Explicit cost = $135,500 b. What is your accounting profit? My Accounting profit is: Total Revenue – Total Expenses $180,000 – (75,000+40,000+6,000+7,000+7,500) $180,000 - $135,500 = $44,500 c. What are your implicit costs? My implicit cost are: $50,000 Annual salary as an assistant store manager $14,400 yearly income of building rental $5,000 per year on interest earned on financial assets Total implicit cost = $69,400 d. Explain why the reasoning for considering these implicit costs – after all, you didn’t actually have to pay them in cash. You should consider implicit costs and subtract them from your bottom line if you think the opportunity cost of running a business outweighs the money you could make from other ventures. For instance, calculating the economic...
Words: 1381 - Pages: 6
