The following problem consist of two parts. First, a short description of a certain mi-croeconomic situation with assumptions and considerations is presented. Second, twostatements are made about the situation. You have to identify whether each statementis true or false and elaborate why you assess each statement the way you do.Consider the labour discipline model, that we discussed in the lecture. Assume thatthe economy is recovering from the pandemic and the unemployment rate decreases.Which of the following statements are correct? Which are false? In the new equilibri-um...Statement 1: ... the workers put in the same amount of effort, because the reser-vation wage did not change.Statement 2:the firms can reach the same effort level at a lower wage.

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Description: The following problem consist of two parts. First, a short description of a certain mi-croeconomic situation with assumptions and considerations is presented. Second, twostatements are made about the situation. You have to identify whether each stat

Every business and company requires workers to work in their businesses so that the operations of…

Answered: Statement 1: ... the workers put in the…

Business

Accounting

Statement 1: ... the workers put in the same amount of effort, because the reser- vation wage did not change. Statement 2: ... the firms can reach the same effort level at a lower wage.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Variance Analysis

In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.

Standard Costing

The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.

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Question

The following problem consist of two parts. First, a short description of a certain mi-
croeconomic situation with assumptions and considerations is presented. Second, two
statements are made about the situation. You have to identify whether each statement
is true or false and elaborate why you assess each statement the way you do.
Consider the labour discipline model, that we discussed in the lecture. Assume that
the economy is recovering from the pandemic and the unemployment rate decreases.
Which of the following statements are correct? Which are false? In the new equilibri-
um...
Statement 1: ... the workers put in the same amount of effort, because the reser-
vation wage did not change.
Statement 2:
the firms can reach the same effort level at a lower wage.

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I - A decrease in production will ordinarily result in an increase in fixed production cost per unit. II - Factory rent is included in manufacturing overhead, but office rent is a period cost. a. True, True b. False, True c. True, False d. False, False
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The labor supply curve a. may slope either upward or downward, depending upon the real wage b. slopes downward to illustrate that a decrease in the real wage decreases the number of individuals willing to work c. slopes upward to illustrate that more people will want to work as the real wage increases d. slopes upward to illustrate that changes in the real wage are directly proportional to changes in the nominal wage e. slopes downward to illustrate that the availability of workers is directly proportional to the real wage
Which one of the following statement is not correct? O Both fixed and variable costs influence short-term decision-making. O Short-term decision-making is all about analysing those costs that will change as a result of taking a particular action. O Opportunity costs are only considered when resources are limited. O Break-even analysis is used to determine how many units of a product or a service a business has to sell to cover all its costs.
A fixed cost is a cost that does not vary in the short run with a specified activity. The defining characteristic of a fixed cost is that it depends on the amount of a resource that is acquired rather than the amount that is used. For this reason fixed costs are often called capacity-related costs. Write 300 to 400 words that explain the difference between fixed costs and variable costs. The example may be of a company you’ve worked with or another company that has these types of costs
In manufacturing a product, if the per-unit cost of direct materials is decreased, what effect will this change have on the break-even point for this product?
What is a good response to? Activity-based costing (ABC) has transformed how organizations measure and manage costs by breaking overhead costs into cost pools based on activity (Kenton, 2024). ABC allocates overhead costs based on a particular activity instead of spreading it out evenly. This gives management clear information to determine which activities benefit the company and which may need to be altered or discontinued. An example of a company using ABC could be electrical costs. If the electrical costs fluctuate based on labor hours, management could use the labor hours as a cost driver. They could determine the cost driver rate by dividing the electric costs for the year by the annual labor hours. Once they determine the cost rate, they can multiply that by the electrical hours used for an activity to calculate the cost. In the example given, it would be pretty easy to implement; however, there are several overhead costs to calculate, which would require a lot of record-keeping,…