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An economy is currently in equilibrium. The following figures refer to elements in the national
income accounts.
$ Billions
Consumption (total) 60
Investments 5
Government expenditure 8
Imports 10
Exports 7
g. Given an initial level of national income of $80 billion, now assume that spending on exports
rises by $4 billion, spending on investment rises by $1 billion, whilst government expenditure
falls by $2 billion. By how much will national income change?
5) Define Mudarabah and explain its contribution to the Islamic financing and to the Islamic deposits.
You are a manager at Glass Inc. a mirror and window supplier. Recently, you conducted
a study of the production process for your single-side encapsulated window. The results
from the study are summarized below and are based on the eight units of capital
currently available at your plant. Workers are paid $60 per unit, per unit capital costs
are $20, and your encapsulated windows sell for $12 each. Given this information,
optimize your human resource and production decisions. Do you anticipate earning a
profit or loss? Explain carefully.
Labor Output
0 0
1 10
2 30
3 60
4 80
5 90
6 95
7 95
8 90
9 80
10 60
11 30
Cash budget: Basic Farmers Delight Corporation reported sales of $350,000 in June,
$380,000 in July, and $390,000 in August. The forecasts for September, October, and
November are $385,000, $418,000, and $429,000, respectively. The initial cash bal-
ance on September 1 is $150,000, and a minimum of $8,000 should be kept. Use the
given information to compile a cash budget for the months of September, October,
and November.
(1) Farmers Delight predicts that 5% of its sales will never be collected, 30% of its sales will be cash sales, and the remaining 65% will be collected in the following month.
(2) Farmers Delight receives other monthly income of $3,000.
(3) The actual or expected purchases are $150,000, $120,000, and $115,000 for the months of September to November, respectively, and 50% are paid in cash while the remainder is paid in the following month. The purchases for August
were $120,000.
(4) Monthly rent is $3,500 chargeable only in October and November.
You are a manager at Glass Inc. a mirror and window supplier. Recently, you conducted
a study of the production process for your single-side encapsulated window. The results
from the study are summarized below and are based on the eight units of capital
currently available at your plant. Workers are paid $60 per unit, per unit capital costs
are $20, and your encapsulated windows sell for $12 each. Given this information,
optimize your human resource and production decisions. Do you anticipate earning a
profit or loss? Explain carefully
Record the following transactions using the accounting equation and T accounts.
1. Owner contributed $50,000 in cash for company stock.
2. Purchased building for $120,000, making a $20,000 down payment and signing a promissory note for the balance.
3. Sold products to customers for $15,000 cash.
4. Paid utilities expense of $2,000.
5. Reduced note payable with an $8,000 cash payment (ignore interest costs).
6. Incurred expense of $3,000, to be paid in the future (accounts payable).
Collected $4,000 on an outstanding account receivable
What is a multiplier
Following information has been extracted from costing record of Abdul Engineering works in respect of Job No. 101.
Material Rs.5,800
Wages:
Department A 100 hours @ Rs. 5 per hour
Department B 200 hours @ Rs. 3 per hour
Overhead for the two department are estimated as follows:
Variable Overhead
Department A Rs.10,000 for 5,000 direct labour hours
Department B Rs.30,000 for 10,000 direct labour hours
Fixed Overheads: Estimated at Rs.50,000 for 50,000 normal working hours.
Required:
Calculate the cost of Job No. 101 and calculate the price to be charged so as to given a profit of 20% on selling price.
Consider the following Cobb Douglas Production Function:
Y =√K √N
when K = 49 and N = 81
2.2 Is this production function characterised by constant returns to scale? Demonstrate.
5. The ABC Company sells widgets at $9 each; variable unit cost is $6, and fixed cost is $60,000
per year.
a. What is the break-even quantity point?
b. How many units must the company sell per year to achieve a profit of $15,000?
c. What will be the degree of operating leverage at the quantity sold in part a? In part b?
d. What will be the degree of operating leverage if 30,000 units are sold per year
