Shauna and Danielle decided to liquidate their jointly owned corporation, Woodward Fashions Inc. (WFI). After liquidating its remaining inventory and paying off its remaining liabilities, WFI had the following tax accounting balance sheet:

FMV Adjusted Basis Appreciation
Cash $ 200,000 $ 200,000
Building 50,000 10,000 40,000
Land 150,000 90,000 60,000
Total $ 400,000 $ 300,000 $ 100,000

Under the terms of the agreement, Shauna will receive the $200,000 cash in exchange for her 50 percent interest in WFI. Shauna's tax basis in her WFI stock is $50,000. Danielle will receive the building and land in exchange for her 50 percent interest in WFI. Danielle's tax basis in her WFI stock is $100,000. Assume for purposes of this problem that the cash available to distribute to the shareholders has been reduced by any tax paid by the corporation on gain recognized as a result of the liquidation. (Leave no answer blank. Enter zero if applicable. Negative amounts should be indicated by a minus sign.)

10.

value:
1.00 points

Required information

a. What amount of gain or loss does WFI recognize in the complete liquidation?



References

eBook & Resources

ProblemDifficulty: 2 MediumLearning Objective: 19-05 Calculate the tax consequences that apply to the parties to a complete liquidation of a corporation.

Check my work

11.

value:
1.00 points

Required information

b. What amount of gain or loss does Shauna recognize in the complete liquidation?



References

eBook & Resources

ProblemDifficulty: 2 MediumLearning Objective: 19-05 Calculate the tax consequences that apply to the parties to a complete liquidation of a corporation.

Check my work

12.

value:
1.00 points

Required information

c. What amount of gain or loss does Danielle recognize in the complete liquidation?



References

eBook & Resources

ProblemDifficulty: 2 MediumLearning Objective: 19-05 Calculate the tax consequences that apply to the parties to a complete liquidation of a corporation.

Check my work

13.

value:
1.00 points

Required information

d. What is Danielle’s tax basis in the building and land after the complete liquidation?

Answers

Answer 1

Answer:

1. Based on the information given WFI transaction is a taxable transaction which include a recognizes gain of the amount of $40,000 on the transfer of the building as.well as gain of the amount of $60,000 on the transfer of the land.

2. Shauna will recognizes gain of the amountc of $150,000 on the transfer of her stock made to WFI calculated as ($200,000 - $50,000) .

Explanation:

1. Based on the information given WFI transaction is a taxable transaction which include a recognizes gain of the amount of $40,000 on the transfer of the building as.well as gain of the amount of $60,000 on the transfer of the land.

2. Shauna will recognizes gain of the amount of $150,000 on the transfer of her stock made to WFI calculated as ($200,000 - $50,000) .


Related Questions

The Tucker family has health insurance coverage that pays 80 percent of out-of-hospital expenses after a deductible of $1,000 per person. If one family member has doctor and prescription medication expenses of $2,200, what amount would the insurance company pay?

Answers

30 because I don’t know what if I got it back in there at least you know

The insurance company pay will pay $960 to the Tucker family as health insurance.

The Tuckers' health insurance has a $1,000 deductible per person. This implies that the family member with $2,200 in doctor and prescription drug expenses must pay the first $1,000 before the insurance company will begin paying.

To begin, subtract the deductible from the total expenses to get the amount subject to coinsurance. This gives us 2200 - 1000 = 1200.

The amount subject to coinsurance is then multiplied by the coinsurance percentage to calculate the amount that the insurance company will pay. This results in 1200 * 0.8 = 960.

The insurance company would pay $960 for the Tucker family member's doctor visits and prescription drugs. The remaining $240 in expenditures would be borne by a family member.

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Which of the following individuals has enrolled in a plan on a fixed income

Answers

Fixed income gives a steady of income to the individual.

What is a fixed income?

The complete question wasn't found online. An overview was given as the complete information wasn't found.

It should be noted that a fixed income means an investment approach that is focused on presentation of capital and income.

The examples of fixed income include municipal bonds, certificate of deposit, etc.

It should be noted that fixed income orders a steady stream of income with less risk.

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THE MArket for lemon has 10 Potential consumers each having an individual demand curve P= 101-10Qi on where- P as price in dollars per cup and Qi as the numbers of cups demanded per week by the ith consumer, fand the market demand curve using algebra. Draw an individual demand curve & the market demand curve. what is the quantity demanded by each consumer and the market as a whole when lemon is priced at p= $1/ cup​

Answers

Answer:

Explanation:

Q = \sum_{i=1}^{10}q_i \\ = q_1+q_2+q_3+...+q_{10} \\ = (\frac{101-P}{10})_1 + (\frac{101-P}{10})_2 + (\frac{101-P}{10})_3 + … + (\frac{101-P}{10})_{10} \\ = (10.1 -0.1P)_1 + (10.1 -0.1P)_2 + (10.1 -0.1P)_3 + … + (10.1 -0.1P)_{10} \\ = 10 \times (10.1 -0.1P) \\ = 101 -P \\ P = 101 - QQ=∑

i=1

10

q

i

=q

1

+q

2

+q

3

+...+q

10

=(

10

101−P

)

1

+(

10

101−P

)

2

+(

10

101−P

)

3

+…+(

10

101−P

)

10

=(10.1−0.1P)

1

+(10.1−0.1P)

2

+(10.1−0.1P)

3

+…+(10.1−0.1P)

10

=10×(10.1−0.1P)

=101−P

P=101−Q

This is the market demand curve for lemonade.

Given the individual demand curve and market demand curve, the graphs will be as follows:

The market demand curve is flatter than the individual demand curve.

Given the price of one cup of lemonade, the individual demand is calculated as follows:


Forward Co. discarded a machine that cost $5,000 and was fully depreciated. The entry to record this transaction would include a credit to the
account.

Answers

Based on the fact that Forward Co. discarded a machine with cost $5,000, the entry to record this transaction in the books would include a credit to Machinery.

How do you dispose of fixed assets?

When fixed assets are to be disposed of, the accumulated depreciation upt to that point is looked at to calculate the net book value.

This would then show the company if they made a profit or a loss when they sold the fixed asset with a profit being made when the selling price is higher than the net book value.

Regardless of the price the fixed asset is sold at, the company would record a credit to the fixed asset (machinery) account to show that the fixed asset account is decreasing.

In conclusion, there will be a credit to machinery.

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Level grade engineering, inc. , sometimes uses explosives to prepare land for construction projects. Strict liability is imposed on this activity because:.

Answers

Because the activity is dangerous in nature.

Why is strict liability imposed on the use of explosives?

Explosives are hazardous to use and should be handled with care. A small negligence can lead to harmful situations. In order to protect innocent people and society from unnecessary harm and ensure their safety. There are a lot of laws governing the use of such materials.

Laws governing the use of such material

Without a federal explosives license or permission (FEL/FEP), it is against the law to produce, store, distribute, receive, or transport explosive materials.

Therefore strict liability is imposed on the activities involving the use of explosives.

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a firm installs 1500 air conditioners which need to be serviced every six months. the firm can hire a team from its logistics department at a fixed cost of $6,000. each unit will be serviced by the team at $15.00. the firm can also outsource this at a cost of $17.00 inclusive of all charges

Answers

There are 2 options available to the firm 1 is to hire the team for serviced or 2 is to outsource the service. Both the options are analyzed in detail as follows:

What is outsourcing?

Outsourcing is the act of obtaining services from external provider instead of having own management. A company can outsource its functions or departments.

Inhouse (Team)

$6000 + ($15 * 1500) = $28,500

Outsource

$17 * 1500 = $25,500

Lowest is $25,500 in outsourcing

Conclusion

It is better to outsource the service of air conditioner as compared to have a team for this service.

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Discuss the concepts of Mean, Median, Mode, and Standard Deviation, including when each should be used, and evaluate the differences of each. How can knowing this information about data help us?

Answers

What is mean?

The mean is a mathematical concept that is used to determine what the average number is in a given set of numbers. For example, given a set of numbers, 5, 1, 1, 1, and 4, the mean is 2.4 ([tex]\frac{5+1+1+1+4}{5}[/tex]), where /5 is the sum of the given set of numbers.

What is the Median?

The median is a term used to represent the middle value in a given set of numbers. For example, given a set of numbers, 5, 1, 1, 1, and 4, the median is 1 because it is the middle for this set of numbers counting from left to right.

What is the mode?

The mode is a term that refers to the most frequently repeated value in a given set of numbers. For example, given a set of numbers 5, 1, 1, 1, and 4, the mode in the set is 1 since it occurs most, exactly three times.

What is the Standard deviation?

Standard deviation is a statistical method used to determine how far (i.e the deviation) of a given dataset relative to its mean. It is often calculated as the square root of variance.

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The __________ ensures that when consumers provide their verbal agreement during the telephonic enrollment, they acknowledge and understand they are actually enrolling, in which plan they are enrolling, as well as the standard disclosures.

Answers

Answer:

Staement of Understanding

Explanation:


in the business world, what is the most important aspect you can apply from having knowledge of
interpersonal communication?

Answers

Answer:

Being able to understand the problems they're going through in the business and because you understand very well you are able to help because if you don't understand what's going on even when it's explained you don't know what to do, so understanding the person's burden will hell you solve it.

What do all Agile frameworks have in common?

Answers

All agile frameworks have a specified, defined iteration period, a lightweight system that allows self-organized teams to better adapt to business requirements, and they all use iterative and gradual development. It's a word that refers to software growth methodologies.

What are the 3 agile frameworks?

Scrum, Kanban, and Extreme Programming (XP) are all agile frameworks commonly used for product development. They are all compatible with the principles in the Agile Manifesto

What is agile development frameworks?

An Agile framework is a specific process to planning, managing, and executing work. Agile frameworks generally fall into two categories: Frameworks designed for teams, and frameworks developed to help organizations rehearse Agile at scale, across many teams.

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Suppose that a lifetime utility function is given by the equation


U
=
c
1
0.75
c
2
0.25

Match the combinations of
(
c
1
,
c
2
)
on the left-hand side with combination on the right-hand side that produce (approximately) the same level of utility.

Group of answer choices
(100, 50)

(80, 80)

(50, 300)

(110, 45)

Answers

based on the lifetime utility function and the combinations given, the correct match for the combinations with the same level of utility is:

(100, 50) = (79.37, 100)(80, 80) = (90, 56.19)(50,300) = (120, 21.7)(110, 45) = (53.1, 400)

which functions give the same utility?

first, find the utilities on the left side:

U(100, 50) = (100 ⁰.⁷⁵ x 50⁰.²⁵) = 84.09

U(80, 80) = (80 ⁰.⁷⁵ x 80⁰.²⁵) = 80

U(50, 300) = (50 ⁰.⁷⁵ x 300⁰.²⁵) = 78.25

U(110, 45) = (110 ⁰.⁷⁵ x 45⁰.²⁵) = 87.97

the utilities on the right:

U(79.37, 100) = (79.37 ⁰.⁷⁵ x 100⁰.²⁵) = 84.09

U(90, 56.19) = (90⁰.⁷⁵ x 56.19⁰.²⁵) = 80

U(120, 21.7) = (120 ⁰.⁷⁵ x 21.7⁰.²⁵) = 78.25

U(53.1, 400) = (53.1 ⁰.⁷⁵ x 400⁰.²⁵) = 87.97

the correct matching would be:

(100, 50) = (79.37, 100)(80, 80) = (90, 56.19)(50,300) = (120, 21.7)(110, 45) = (53.1, 400)

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In an organizational chart that shows how departments on a cruise ship are related, the hotel department oversees
heating, cooling, and ventilation
the chief purser
the housekeeping department
the music director

Answers

In an organizational chart that shows how departments on a cruise ship are related, the hotel department oversees option C. the housekeeping department. Read below about a cruise ship.

What is a cruise ship?

Cruise ships are large passenger ships used mainly for vacationing. Unlike ocean liners, which are used for transport, cruise ships typically embark on round-trip voyages to various ports-of-call, where passengers may go on tours known as shore excursions.

Therefore, the correct answer is option C. the housekeeping department.

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Answer: The answer is actually the music director.

Explanation:

I'm taking the test and the answer is in the lesson.


b. Explain the following term as used in sole proprietorship type of business.
(i)Asset

Answers

Answer:

any investment that holds value.

Explanation:

can be land, equipment, supplies, lawn mowers, cash, etc. Same as other forms of businesses

Which of the following does not relate to organizational structure? Specialization Span of control Formalization Cross functional team

Answers

Cross functional team does not relate to organizational structure.

What is organizational structure?

A system that specifies how specific activities are carried out in order to accomplish an organization's objectives is known as an organizational structure.

A decentralized structure gives nearly every employee a high level of personal agency in contrast to a centralized structure, which has a clearly defined chain of command.

The formal division, grouping, and coordination of job tasks are determined by organizational structure. Typically, an organization's structure consists of six distinct components:

specialization of workdepartmentalizationcontrol span chain of commandcentralization and decentralizationformalization

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The ledger of the Blue Spruce Corp. at the end of the current year shows Accounts Receivable of $237,000.
(a)
If Allowance for Doubtful Accounts has a credit balance of $4,700 in the trial balance and bad debts are expected to be 9% of accounts receivable, journalize the adjusting entry for the end of the period. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

Answers

Answer: Dr: increase in provision for bad debts of 16630

Cr: P & L a/c 16630

Explanation:

finally reduce the figure for a/c receivables by 21330

Chapter 10 Standard Costs and the Balanced Scorecard EXERCISE 10-3 Direct Materials Variances [LO2] Refer to the data in Exercise 10-6. Assume that instead of producing 4,000 units during the month, the company produced only 3,000 units, using 14,750 pounds of material. (The rest of the material purchased remained in raw materials inventory.) Required: Compute the direct materials price and quantity variances for the month.

Answers

The required answer is materials price variance=[tex]\$ 3,000 \mathrm{~F}$[/tex]

Materials quantity variance [tex]$=\$ 2,375 \mathrm{U}$[/tex]

Materials price variance:

When the actual price paid for materials used in manufacturing differs from the standard price for the materials, this is referred to as a material price variation (MPV). If the actual price paid for the materials is less than the standard price, the material price variance will be beneficial.

The materials quantity variance is calculated simply for the amount of materials utilized in production, as opposed to the materials price variance, which is computed for the total amount of materials purchased in the solution below.

Actual Quantity of Input, at Actual Price

[tex]$(\mathrm{AQ} \times \mathrm{AP})$ \\[/tex]= [tex]$20.000$[/tex] pounds [tex]$\times$ \\[/tex] [tex]$\$ 2.35$[/tex] per pound[tex]$=\$ 47,000$[/tex]

Actual Quantity of Input, at Standard Price

[tex]$(\mathrm{AQ} \times \mathrm{SP})$[/tex]= [tex]$20.000$[/tex] pounds [tex]$\times$[/tex] [tex]$\$ 2.50$[/tex] per pound [tex]$=\$ 50,000$[/tex]

Standard Quantity Allowed for Output, at Standard Price

[tex](\mathrm{SQ} \times \mathrm{SP}) \\[/tex]= [tex]13,800[/tex] pounds[tex]* } \times[/tex] [tex]\$ 2.50 \text { per pound } \\[/tex] [tex]=\$ 34,500[/tex]

Price Variance [tex]\$ 3,000 \mathrm{~F}=[/tex] [tex]14,750 \text { pounds } \times \$ 2.50 \text { per pound }=\$ 36,875[/tex]

Quantity Variance U=  [tex]\$2,375[/tex]

[tex]$\star 3,000$[/tex]  units [tex]$\times 4.6$[/tex] pounds per unit $=13,800$ pounds

Alternatively, the variances can be computed using the formulas:

Materials price variance [tex]$=\mathrm{AQ}(\mathrm{AP}-\mathrm{SP})$[/tex]

20,000 pounds [tex]$(\$ 2.35$[/tex]  per pound [tex]$-\$ 2.50$[/tex] per pound [tex]$)=\$ 3,000 \mathrm{~F}$[/tex]

Materials quantity variance [tex]$=S P(A Q-S Q)$[/tex]

[tex]$\$ 2.50$[/tex] per pound [tex]$(14,750$[/tex] pounds [tex]$-13,800$[/tex] pounds [tex]$)=\$ 2,375 \mathrm{U}$[/tex]

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Which of the following statements is false?



When the marginal product of labor is upward-sloping, the marginal cost curve (MC) is upward-sloping.


The average fixed cost (AFC) curve is downward-sloping and approaches the horizontal axis.


The marginal cost (MC) curve intersects the average variable cost (AVC) curve at the minimum of average variable cost.


When the marginal cost (MC) curve is above the average cost (AC) curve, the AC is upward-sloping.

Answers

The statement that is false is When the marginal product of labor is upward-sloping, the marginal cost curve (MC) is upward-sloping.

What is the relationship between marginal product and cost?

The two measures have an inverse relationship. This means that when one is increasing, the other is increasing.

When marginal product of labor is increasing, the marginal cost curve decreases so this statement is false.

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Esmeralda promises to pay fiorello $400 because ""he does not have as much money as other people. "" esmeralda’s promise is not enforceable because:.

Answers

Esmeralda promises to pay Fiorello $400 because ""he does not have as much money as other people. "" Esmeralda's promise is not enforceable because: Fiorello has not given consideration in return.

INTERPRETATION-

Consideration is mutual i.e. both parties get something in the return for the performance of the contract. However, Esmeralda has not given consideration in exchange.

Esmeralda was given the chance to audition for the Performing Arts High School which she succeeded in. She then moved to New York and attended School, studying drama and dance.

Esmeralda Santiago wrote her autobiography "When I Was Puerto Rican" which narrates her and her family's life moving from Puerto Rico to America. The book also follows the Puerto Rican girl through the many obstacles that she had to endure and overcome to change her life.

Therefore, we can conclude that the correct option is A.

Your question is incomplete, but most probably your full question was:

Esmeralda promises to pay Fiorello $400 because “he does not have as much money as other people.” Esmeralda’s promise is not enforceable because

A.    Fiorello has not given consideration in return.

B.    Esmeralda could have paid more.

C.    the redistribution of wealth on a one-to-one basis is not a valid social goal.

D.    society does not want gifts cheapened by making them legally enforceable.

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What word do we use when we describe an economy with a high unemployment rate and little growth while prices are still rising?

Answers

Answer:

i dont know to be honest can you tell me

Explanation:

Answer:  Stagflation

Explanation:

why we remove interest amount from 1 year amount?

Answers

The interest amount earned is removed from the accumulated amount of savings because the interest is simple interest.

What is Interest?

interest is the percentage amount earned over the savings made and deposited in the account, the interest is a basic market interest rate that is applied to the savings to calculate the amount of interest income for a given period of time.

The savings are deposited and they are applied for the interest rate the interest income is also included in the original savings, then for the next year the interest rate will again be only applied to the original savings amount and not the compounded amount that is the original amount of savings plus the interest earned in the first year.

That is why the interest earned in the first year is deducted from the total savings in the account to calculate the interest income for the second year.  

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Which of these may be integrated with an electronic stability control (ESC) system

Answers

Answer:

ESC also integrates all-speed traction control, which senses drive-wheel slip under acceleration and individually brakes the slipping wheel or wheels, and/or reduces excess engine power, until control is regained.

Explanation:

(you never said the answer choices)

Anti-lock Braking System (ABS) may be integrated with an electronic stability control (ESC) system. The correct option is a.

A vehicle's stability can be increased and the chance of skidding or losing control during sudden maneuvers can be decreased with the help of an electronic stability control (ESC) system. It uses sensors to track the movement of the car and reduces engine power or selectively brakes specific wheels to correct oversteer or understeer. To further improve stability, the system may be integrated with an Anti-lock Braking System (ABS) to prevent wheels from locking during hard braking.

However, ESC functions independently of other auto systems like air conditioning, power steering and automatic transmission. By preventing wheel lockup, maintaining traction and enabling the driver to maintain control during emergency braking situations or slippery road conditions, the integration of ABS with ESC enhances the overall safety of the vehicle.

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The complete question is - Which of these may be integrated with an electronic stability control (ESC) system to enhance vehicle safety and stability?

a. Anti-lock Braking System (ABS)

b. Power Steering

c. Automatic Transmission

d. Air Conditioning System

Consider two mutually exclusive R&D projects that ADM is considering. Assume the discount rate for ADM is 13 percent. Project A: Server CPU .13 micron processing project By shrinking the die size to .13 micron, ADM will be able to offer server CPU chips with lower power consumption and heat generation, meaning faster CPUs. Project B: New telecom chip project Entry into this industry will require introduction of a new chip for cell phones. The know-how will require a large amount of up-front capital, but success of the project will lead to large cash flows later on. Year Project A Project B 0 –$ 845,000 –$ 1,064,000 1 368,000 267,000 2 397,000 388,000 3 269,000 388,000 4 194,000 432,000 5 148,000 519,000

Answers

Based on the cashflows and initial investments of Projects A and B by ADM, the incremental IRR is 22.24%.

What is the Incremental IRR?

This is a financial measure that compares projects with different cashflows. It does so by taking the net present value of the cashflows to zero.

It can be found by using a spreadsheet with the function IRR but you'll first have to find the difference between the cashflows of the two projects:

As shown on the attachment, the Incremental IRR is:

= 22.24%

Rest of the question is:

What is the incremental IRR of investing in the larger project?

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You are planning to save for retirement over the next 25 years. To do this, you will invest $900 a month in a stock account and $600 a month in a bond account. The return of the stock account is expected to be 7 percent, and the bond account will pay 4 percent. When you retire, you will combine your money into an account with a return of 6 percent. How much can you withdraw each month from your account assuming a 20-year withdrawal period?

Answers

Answer:

Explanation:

The formula for calculating the future value of an ordinary annuity (where a series of equal payments are made at the end of each of multiple periods) is - FV = PMT [((1 + r)n - 1) / r]   Where: FV = The future value of the annuity stream PMT

A country has a _________________whenever the value of the products it imports exceeds the value of the products it exports

Answers

Answer:

trade surplus

Explanation:

like karo

describe the hypothesis testing process for population for dependent samples?

Answers

Hypothesis testing is a form of statistical inference that uses data from a sample to draw conclusions about a population parameter or a population probability distribution.

What are population parameter?

In statistics, a parameter is any measured quantity of a statistical population that summarises or describes an aspect of the population, such as a mean or a standard deviation.

Therefore, the correct answer is as given above

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Bradley Company manufactures a single product that sells for $360 per unit and whose variable costs are $270 per unit. The company’s annual fixed costs are $1,125,000. The break-even point in dollars of sales is:

Answers

Based on the company's fixed costs, the selling price, and the variable costs, the break-even point in dollars of sales is $4,500,000

What is the breakeven point?

First, find the breakeven point in dollars as:

= 1,125,000 / (360 - 270)

= 12,500 units

In dollar sales this is:

= 12,500 x 360

= $4,500,000

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5
Yusuke is developing a product that will revolutionize miniature train sets. When hiring a marketer, he should look for someone who specializes
in which type of marketing strategy?
O A grassroots marketing
OB.
viral marketing
О с.
street marketing
O D. niche marketing

Answers

Answer:

D. niche marketing

Explanation:

miniature train sets are a small specific detailed market

Discuss how you will use the "8-Step process
to critical thinking" in your personal and
professional life. Provide examples to
support your answers

Answers

I will use the "8-Step process to critical thinking" in my personal and professional life in many ways.

What is the "8-Step process to critical thinking"?

The "8-Step process to critical thinking" includes the following categories:

ReflectionAnalysisInformation AcquisitionCreativityStructuring argumentsDecision makingCommitmentDebate.

The 8-step process involves a process of identifying, observing, describing, questioning, researching, establishing, responding, and sharing knowledge to achieve life improvements.

In my personal and professional life, I need to seek knowledge, information, and understanding to enhance the application of concepts and innovations to living and work.

After acquiring the required information, I will carry out a critical analysis and synthesis before taking action.  Results obtained from my actions must be reflected upon to provide guidance for future activities.

Thus, the "8-Step process to critical thinking" will remain useful in my personal and professional life.

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Suppose that you put $1,500 into a certificate of deposit that pays 2% per year,
compounded monthly. If you leave the money in that account for 5 years, how
much will this CD be worth when you withdraw your funds?

$1,604.69
$18,150.50
$1,657.62
$19,873.45

Answers

[tex]~~~~~~ \textit{Compound Interest Earned Amount} \\\\ A=P\left(1+\frac{r}{n}\right)^{nt} \quad \begin{cases} A=\textit{accumulated amount}\\ P=\textit{original amount deposited}\dotfill &\$1500\\ r=rate\to 2\%\to \frac{2}{100}\dotfill &0.02\\ n= \begin{array}{llll} \textit{times it compounds per year}\\ \textit{monthly, thus twelve} \end{array}\dotfill &12\\ t=years\dotfill &5 \end{cases}[/tex]

[tex]A=1500\left(1+\frac{0.02}{12}\right)^{12\cdot 5}\implies A=1500\left( \frac{601}{600} \right)^{60}\implies A\approx 1657.62[/tex]

Coffee King Starbucks Raises Its Prices Blame the sour news at Starbucks this week on soaring milk cost. … The wholesale price of milk is up nearly 70% in the 12 months. … “There’s a lot of milk in those [Starbucks] lattes,” notes John Glass, CIBC World Markets restaurant analyst. USA Today, July 24, 2007 a. Is milk a fixed factor of production or a variable factor of production? b. Describe how the increase in the price of milk changes Starbucks’s short run cost curve.

Answers

The milk as a factor of production is known as a variable factor of production and the increase in the price of milk changes Starbucks’s short run cost curve as the AVC, ATC and MC curves upward.

What is variable factor of production?

These are those production factors that do change with output, that is. more are employed when production increases and less are usued when production decreases.

Some examples of a variable factors include labour, energy, and raw materials directly used in production.

However, the milk is also an example of a variable factor for Starbuck because the price of the raw material for producing its coffee keeps inculcating with economic trends.

Hence, the milk as a factor of production is known as a variable factor of production and the increase in the price of milk changes Starbucks’s short run cost curve as the AVC, ATC and MC curves upward.

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