Economies of scale may arise from all but one of the following. Which one is it?
A. Spreading the fixed-costs of administration over more customers holds average costs down.
B. Government economic subsidies protect firms from competition to avoid losses.
C. Having a larger retail space can expand sales more than proportionately.
D. Doubling promotional expenses to expand sale more than proportionately.
Answer: B. Government economic subsidies protect firms from competition to avoid losses.
- On January 1, year 1, Raven Limo service, incorporated paid $64,000 cash to purchase a limousine. The limo was expected to have a six-year useful life and a $10,000 salvage value. On January 1, year 5 the limo was sold for $30,000 cash. Assuming Raven uses straight-line depreciation, the company would recognize a
- On January 1, year 1, Marino moving company paid $48,000 cash to purchase a truck. The truck was expected to have a four-year useful life and an $8,000 salvage value. If Marino uses the straight-line method, the amount of depreciation expense recognized on the year 2 income statement is