Sweet Sugar Company manufactures three products (white sugar, brown sugar, and powdered sugar) in a continuous production process. Senior management has asked the controller to conduct an activity-based costing study. The controller identified the amount of factory overhead required by the critical activities of the organization as follows: Activity Budgeted Activity Cost Production "496,800" Setup 266,400 Inspection 96,800 Shipping 171,600 Customer service 78,400 Total $1,110,000 The activity bases identified for each activity are as follows: Activity Activity Base Production Machine hours Setup Number of setups Inspection Number of inspections Shipping Number of customer orders Customer service Number of customer service requests The activity-base usage quantities and units produced for the three products were determined from corporate records and are as follows: Machine Hours Number of Setups Number of Inspections Number of Customer Orders Customer Service Requests Units White sugar 3,170 150 220 880 70 7,925 Brown sugar 2,020 230 330 2,420 440 5,050 Powdered sugar 2,010 220 550 1,100 190 5,025 Total 7,200 600 1,100 4,400 700 18,000 Each product requires 0.9 machine hour per unit. Required: If required, round all per unit amounts to the nearest cent. 1. Determine the activity rate for each activity. Production $fill in the blank 1 per machine hour Setup $fill in the blank 2 per setup Inspection $fill in the blank 3 per move Shipping $fill in the blank 4 per cust. ord. Customer service $fill in the blank 5 per customer service request 2. Determine the total and per-unit activity cost for all three products. Total Activity Cost Activity Cost Per Unit White sugar $fill in the blank 6 $fill in the blank 7 Brown sugar fill in the blank 8 fill in the blank 9 Powdered sugar fill in the blank 10 fill in the blank 11 3. Why aren’t the activity unit costs equal across all three products since they require the same machine tim

Answers

Answer 1

1. The determination of the activity rate for each activity is as follows:

Activity                Activity Rates

Production              $69 per machine hour

Setup                     $444 per setup

Inspection               $88 per move

Shipping                 $39 per customer order

Customer service  $112 per customer service request

2. The determination of the total and per-unit activity cost for all three products is as follows:

Total and Per-Unit Activity Cost:

                               Total Activity Cost       Activity Cost Per Unit

White sugar                    $346,490                   $43.72

Brown sugar                   $414,200                   $82.02

Powdered sugar           $348,950                   $69.44

3. The activity unit costs are not equal across all three products, despite each requiring the same machine time, because machine time is not the only activity base.

Activity                Budgeted      Activity Base                

                         Activity Cost

Production         $496,800     Machine hours                  

Setup                   266,400      Number of setups              

Inspection             96,800      Number of inspections          

Shipping               171,600      Number of customer orders    

Customer service 78,400      Number of customers            

Total                $1,110,000            service requests

                                                 White      Brown    Powdered     Total

Machine Hours                         3,170       2,020          2,010      7,200

Number of Setups                      150          230             220         600

Number of Inspections             220          330             550        1,100

Number of Customer Orders   880       2,420           1,100       4,400

Customer Service Requests      70           440             190          700

Units                                      7,925        5,050         5,025     18,000

Each product requires 0.9 machine hours per unit

Determination of Activity Rates (Total Activity Cost/Activity Usage)

Activity                Activity Rates

Production              $69 ($496,800/7,200)

Setup                     $444 ($266,400/600)

Inspection               $88 ($96,800/1,100)

Shipping                 $39 ($171,600/4,400)

Customer service  $112 ($78,400/700)

                                                 White           Brown             Powdered

Machine Hours                       3,170x$69   2,020x$69      2,010x$69

Number of Setups                  150 x$444    230x$444     220 x$444

Number of Inspections            220x$88      330x$88        550x$88

Number of Customer Orders  880x$39   2,420x$39      1,100x$39

Customer Service Requests     70x$112      440x$112        190x$112

                                                    White             Brown          Powdered

Machine Hours                       $218,370       $139,380          $138,690

Number of Setups                    66,600           102,120             97,680

Number of Inspections             19,360            29,040            48,400

Number of Customer Orders  34,320            94,380            42,900

Customer Service Requests     7,840            49,280             21,280

Total overhead costs         $346,490        $414,200        $348,950

Units                                          7,925              5,050              5,025

Activity Cost per unit             $43.72            $82.02            $69.44

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Related Questions

consider the production possibilities frontier for an economy that produces only sofas and cars. the opportunity cost of each car is?

Answers

The number of cars that would have been given up is equal to the opportunity cost of boosting sofa manufacturing by one unit.

The potential advantages that a person, investor, or business forgoes by choosing one choice over another are known as opportunity costs. Since opportunity costs are by definition invisible, it is easy to overlook them. When a company or person is aware of the opportunities that could be lost by choosing one investment over another, better decisions may be made.

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The steps in the training process include all of the following except

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A systems approach to training is divided into four stages: needs analysis, program design, program implementation, and evaluation.

What comes first in any workout regimen?

Identification and evaluation of needs are the initial steps in establishing a training program. It's possible that the organization's strategic, human resources, or personal development goals have already identified the training needs of its employees.

Assessment, motivation, design, delivery, and evaluation are the five connected steps or activities that make up the process of training.

What is a model of the training process?

A component of instructional design is training models. It involves the process of developing instructional materials for various training requirements. Many businesses invest in training programs for workers to help them advance on the job.

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Net farm income less family living expenses and income taxes equals

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Individual income is the net farm income less family living expenses and income taxes. It is the total income from the outcome produced on the farm by the means of employment or self land work.

Income of family and the expenditure of the budget decided after paying the taxes is the left income is allocated to extraordinary expenses of the remaining things to be spared. Lower class families are abolished from these.

The taxes are imposed on those which comes under the criteria like for income taxes are made several slabs so that those not under criteria are not liable to pay them.

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Prior to the CARES Act, up to what percentage of your income could be deducted as a donation to charity?
(1 point)
O 60%
O 80%
O 70%
O 100%

Answers

An appropriate choice is option (d). A person may deduct up to 100% of their adjusted gross income in the form of eligible contributions.

How much of your income was allowable for tax deductions as charitable contributions before the CARES Act?

Qualified contributions are exempt from this restriction. The amount of qualifying contributions that an individual may deduct from their adjusted gross income is up to 100% of that amount. A corporation is permitted to deduct up to 25% of its taxable income in the form of qualifying donations.

For donations made in 2022, how much may I deduct?

The annual income tax deduction cap for donations to public charities, including donor-advised funds, is 30% of adjusted gross income (AGI) for non-cash assets if held for more than a year, and 60% of AGI for cash donations.

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Answer: 1. your emergency fund

2. Reduce casual spending and increase savings until your emergency fund has been paid back.

3. tracking your spending

4. a private foundation

5. 60%

6. a bank savings account

7. a high interest rate

8. the profit earned on the sale of an asset which has increased while it was owned

9. a fund that pools money from many investors to buy securities

10. owning dividend stocks

11. a type of account offered to employees at very little or no cost

12. SEC

13. NCUA

14. 2.8%

15. the money that a person or a country earns

16. water bill

17. your previous budget

18. You buy undervalued assets, which appreciate with time.

19. a stock market index made up of the 500 largest companies being traded in the U.S.

Explanation: I took the same quiz and got 100%, hope it helps!

When is the best time to go to the grocery store so you can spend the least amount of money?

Answers

Answer: early to mid morning on Wensedays

Explanation:

I need help!!! offering brain list (25 points)

Answers

For their home display, Jonathan and his colleague Drew must complete documentation to meet vendor standards. An essential foundation for contract writing is the exchange of value; offer and acceptance. Choice B

Below, this is further discussed.

What essential guidelines should Jonathan and Drew keep in mind while negotiating a contract?

In general, Jonathan and his partner Drew are aware that they must draft an agreement with conditions for cooperating with the suppliers of construction supplies and items for home décor staging for their house show.

The Exchange of value, offer, and acceptance is a crucial aspect they should both keep in mind while negotiating a contract. Choice B

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Question 4
1 point possible (graded)
The coverage of the public sector relates to:
Social secturity and medical benefits
The contribution of the public sector in the economy's GDP
The scope of the institutions and units that are controlled by government
All of the above
I don't know

Answers

The coverage of the public sector relates to:

The contribution of the public sector in the economy's GDP. The appropriate response is Option B.

Through the expansion of infrastructure, it encourages quick economic growth. It generates job opportunities. It produces money for more expansion. It guarantees income and wealth equality, promoting balanced regional growth.

Personal consumption, corporate investment, government spending, and net exports are the four main components of the gross domestic product. 1 That reveals what a nation excels at generating. The nation's annual total economic production is measured by its GDP.

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When writing a résumé, why is it important to include as many relevant keywords as possible?

Answers

It is crucial to use as many pertinent keywords as you can in your resume because their purpose is to catch the attention of hiring managers by closely matching the job description.

Having keywords helps your resume stand out against all other candidates because most recruiters and hiring teams scan resumes for relevant experience.

Resumes are used to make a good impression on potential employers. The first thing an employer sees about a candidate's potential is their resume.

Many employers believe that the "skills" section of a resume is the most crucial. Even if a candidate lacks experience, they should still possess the necessary skills and exhibit growth potential. A candidate should have a variety of skills to show that they have a range of interests.

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"Discount on bond payable" is a(n) ____________________ account.

Answers

"Discount on bond payable" is a(n) contra liability account.

What is contra liability account?

Bond discounts, sometimes referred to as discounts on payable bonds, occur when a bond's par value is higher than its carrying value or issue price.

The difference between these two sums is known as a bond discount. Because the stated rate of interest is less than the market rate of interest, a discount on bond due arises.

A counter liability account named Discount on Bonds Payable will be created in a firm's general ledger when a company gets money for a bond that is not the maturity amount or face amount of the bond.

Therefore, "Discount on bond payable" is a(n) contra liability account.

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A manufacturing company prepays its insurance coverage for a three-year period. The premium for the three years is $3,300 and is paid at the beginning of the first year. Seventy percent of the premium applies to manufacturing operations and thirty percent applies to selling and administrative activities. What amounts should be considered product and period costs respectively for the first year of coverage? Period cost Product cost $0 $800 A $800 B $240 $560 C $330 $770 D a. Choice B O b. Choice C O c Choice D Od. Choice A

Answers

The amounts which should be considered product costs and period costs, respectively, for the first year of coverage are $770 and $330.

The total amount which must be expensed in the first year is the insurance cost which was thus incurred in that year, and that is one-third of the premium paid:

Total insurance coverage prepaid = $3,300

Number of years covered = 3

Insurance cost for the first year = $3,300 ÷ 3

                                                    = $1,100

So here, it can be said that the portion which relates to the factory is a product cost, while the portion which relates to the administrative and selling activities is a period cost.

Total insurance expense incurred = $1,100

70% relating to the manufacturing operations = Product cost

= 0.70 × $1,100 = $770

30% relating to selling and administrative activities = Period cost

= 0.30 × $1,100 = $330

Thus, the product cost = $770 and the period cost = $330

Hence, option C is correct.

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Materials used by the Instrument Division of XPort Industries are currently purchased from outside suppliers at a cost of $342 per unit. However, the same materials are available from the Components Division. The Components Division has unused capacity and can produce the materials needed by the Instrument Division at a variable cost of $284 per unit.
Assume that a transfer price of $325 has been established and that 23,000 units of materials are transferred, with no reduction in the Components Division’s current sales.
a. How much would XPort Industries’ total income from operations increase?
$fill in the blank 1
b. How much would the Instrument Division’s income from operations increase?
$fill in the blank 2
c. How much would the Components Division’s income from operations increase?
$fill in the blank 3
d. Any transfer price will cause the total income of the company to
, as long as the supplier division capacity is
toward making materials for products that are ultimately sold to the outside.

Answers

Based on the cost of the materials from outside suppliers and the variable cost to the Instrument Division, the increase in total income to XPort Industries will be $1,334,000

The cost of purchasing from an outside supplier and the transfer price leads the instrument division income to increase by $391,000

The increase in the income to the Components division will be $943,000

Transfer prices will cause total income to increase if the supplier division capacity is used in making materials for products.

What is the increase in come?

The increase in the total income to XPort Industries is:

= (Price from outside supplier - Price in division) x Number of units of materials that are transferred

= (342 - 284) x 23,000

= $1,334,000

The increase to the income for the Instrument Division is:

= (Price from outside supplier - Transfer price) x Number of units of materials that are transferred

= (342 - 325) x 23,000

= $391,000

The increase in the income for the Components Division is:

= (Transfer cost - Variable cost) x Number of units of materials that are transferred

= (325 - 284) x 23,000

= $943,000

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An individual who has decided to start a business on their own may generally choose from any of the following structure types, EXCEPT:

Answers

Answer:

Here are the definitions for each term, but i would say C Corporation. (I don't know exactly)

explanation

Sole Proprietorship: is an unincorporated business, which means it would be under the supervision of government rules, unlike limited liability companies, corporations and so on

Partnership: Partnerships are unincorporated businesses with two or more owners (partners) who contribute in various ways (capital, labor, etc.) and may have legal liabilities. A written agreement should outline the partners’ roles, rights, and responsibilities.

C Corporation: A C-corp, like an S-corp, is a limited liability entity, which means the company, not its shareholders or owners, is held legally liable for the company’s debt and other obligations. Also, you can bring in an unlimited number of investors when your business is structured as a C corporation.

S Corporation:An S corporation, also known as an S subchapter, refers to a type of legal business entity. Requirements give a corporation with 100 shareholders or less the benefit of incorporation while being taxed as a partnership. Corporate taxes filed under Subchapter S may pass business income, losses, deductions, and credits to shareholders.

You plan to deposit 400 in a bank account now and 200 at the end of the year. If the account earns 7% interest per​ year, what will be the balance in the account right after you make the second​ deposit?

Answers

Based on the amount you deposited into the bank account now and the second deposit at year end, the balance of the account after the second deposit would be $628

How to find the balance on the account?

First, find the balance that would have accrued at the end of the year based on your first deposit and the interest rate:

= Amount deposited x ( 1 + interest rate per year) ^ number of years

= 400 x ( 1 + 7%) ^ 1

= 400 x ( 1 + 7%)

= 400 x 1.07

= $428

The amount right after the second deposit will be:

= First deposit plus interest + Second deposit

= 428 + 200

= $628

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What type of data would be BEST communicated with a bar chart?
A. the percentage of all votes a candidate received
B. voting trends in a district over several years
C. comparing votes that two candidates received
D. why voters chose a certain candidate

Answers

A type of data which would be best communicated with a bar chart is: A. the percentage of all votes a candidate received.

What is a graph?

A graph can be defined as a type of chart that's commonly used to graphically represent data on both the horizontal and vertical lines of a cartesian coordinate, which are the x-axis and y-axis.

The types of graph.

In Science, there are different types of graph and these include the following:

Pie chartDot graphScatter plotLine graphHistogramBar graph

What is a bar chart?

A bar chart is also referred to as bar graph and it can be defined as a type of chart that is used for the graphical representation of a data set, especially by using rectangular bars or vertical columns.

In this context, we can reasonably infer and logically deduce that a bar chart is a type of chart that can be used to graphically represent the percentage of all the votes which a candidate received in an election.

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Zantano Corporation sells $1,000 worth of goods on June 25 on credit. The customer sends the company a check on August 15. The customer receives the goods on September first. Assuming the company uses accrual accounting, the sale will be recorded in _____.

Answers

Based on the assumption that Zantano Corporation uses accrual accounting, the sale would be recorded in June 25.

What is the Accrual basis in accounting?

The Accrual basis of accounting is a system that calls for expenses being recorded when they were incurred and not when they were paid for. It also calls for revenue to be recorded when the company delivers the goods that it sold and not when the sales were paid for.

Zantano Corporation sold $1,000 worth of goods on June 25 which meant that it delivered these goods to the customer on the same date. The customer did not however pay for the goods and instead bought it on credit. By the Accrual basis however, the sale was delivered by Zantano Corporation on June 25th and so when recording the sale, it would be recorded as having happened on June 25.

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The cost of using industry sponsored websites such FINRA usually exceeds the benefits for small investors.

True or False

Answers

This is correct; the cost of using industry-sponsored websites such as FINRA usually outweighs the benefits for small investors.

What is FINRA?FINRA, or the Financial Industry Regulatory Authority, is a government-authorized not-for-profit organization that oversees US broker-dealers in order to protect investors and ensure market integrity. FINRA's integrity allows investors and firms to participate in the market with confidence. We use deep expertise, cutting-edge technology, and extensive market intelligence to serve as the brokerage industry's first line of defense all at no cost to taxpayers. Broker-Dealers, Capital Acquisition Brokers, and Funding Portals are all regulated by FINRA. A Broker Dealer is a company that buys and sells securities on behalf of its customers, its own account, or both. A Capital Acquisition Broker is a Broker Dealer with fewer restrictions.

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what are the solution of demand curve​

Answers

Answer:

The demand curve shows the relationship between the price and quantity demanded of a commodity

Explanation: The relationship is presented using a demand function.

for eg: Q = a - bP

is a linear demand function

A curve is plotted for the function, the demand curve. One can solve for the equilibrium price using demand curve and supply curve. The intersecting point of these curves represents the equilibrium price.

Which of the following would most
likely fall under the category of
government expenditures for the GDP?
A. exported goods to China,
B. buying fast food
C. investments in stocks
D. building a new highway

Answers

Answer:

C

Explanation:

Investments in stocks of the following would most likely fall under the category of government expenditures for the GDP. The correct option is C.

What counts as government investment in GDP?

All expenditures by federal, state, and local agencies are considered government purchases, with the exception of debt payments and transfer payments like Social Security. In general, government purchases play a significant role in a country's gross domestic product (GDP).

Investment in GDP calculations does not include the acquisition of stocks and bonds or the trading of financial instruments. It refers to the acquisition of brand-new capital goods, such as inventories, new commercial real estate (such as offices, warehouses, and stores), and new residential housing developments.

Thus, the ideal selection is option C.

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Penicillin, airplanes, and air-conditioning were all

Answers

Answer:

Penicillin, airplanes, and air-conditioning were all built in the nineteenth century.

Explanation:

None.

A popular marketing trend in today’s marketing would? A. Relationship marketing B. Market C.Break even point D.marketing

Answers

These are critical to understand when performing case analysis. They include: Break Even Analysis. Lifetime Value of the Customer.

In this market research step, data related to the problem are collected and studied:

Answers

Data analysis is the stage of market research in which data related to the problem is collected and studied.

How important is data analysis for marketing?

It is an essential step for marketing research to be really effective. Through the analysis of the data found, the company will be able to identify its potential audience, its economic needs and desires, in order to segment its market and develop a focused strategy to create value for the consumer.

Data and information about a market are valuable tools that help companies make focused and consumer-aligned decisions, which constitutes a strategy that can increase competitiveness and market positioning.

Therefore, organizations must manage the data and information found through marketing research to carry out focused studies that help in the segmentation of their target audience.

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Trade Restriction – Find an example of a current tariff or quota that the U.S. imposed on another country OR find an example of a current tariff or quota that was imposed on the U.S. Tell why the trade restriction was imposed? Example must be within the last 3 years. Note the source.

Answers

An example of a current tariff or quota that was imposed on goods from another country would be the tariffs on trade that the United States has imposed on goods that are from China. The reason for this is to help the local manufacturers in the United States.

What is a tariff?

This is the term that is used to refer to the taxes that are placed on the goods that are imported from another country into a nation.

The reason for tariffs are usually to help the manufacturers in that particular nation have the upper ground. That is, it is a way of supporting the local manufacturers.

Section 301 was what the past president of the United States Trump used to enact the tariffs that he placed on the goods that are to come to the United States from the Chinese people.\

This is also a part of the economic rivalry that is going on between the two nations on who has the strongest and the biggest economy in the world.

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Describe a business crisis from recent years during which better communication would have aided the corporation(s) in question.
Could enforced transparency have prevented the setback--or would it have made it worse? If you were in control of communication during the crisis, how. would you address your investors?

Answers

One business crisis from recent years during which better communication would have aided the corporation(s) in question is the one involving Rogers Contract. A small comma error led to an error that cost two million US. dollars. This case study became known as the "Comma Quirk".

If you were in control of communication during the crisis, how. would you address your investors?

In cases like the above, transparency would definitely go a long way in addressing the issue. Given the value of the contract, it is expected that such a problem would have been escalated to the highest levels of authority.

At such a level, deals can be made to mitigate such losses, assuming there was zero operational control to check such things.

Some of the operational control that would forestall such errors is to ensure that such contracts go through at least three eagle-eyed hands before it is finally endorsed.

Another tool that serves to protect companies from bearing the full weight of the loss is to have Insurance in place that caters to Errors and Omissions.

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I need help!!! offering (25 points)

Answers

Legal capacity can be defined as the key principle that would help to ensure that the people that are entering this contract have the authority to enter it.

What is a contract?

This is the term that is sued to refer to the legal agreement that two people would have to enter as they agree to do business with themselves. This is an enforceable document and it is legal in the court of law. Especially in the case where a breach may occur by the [persons that have entered into the contract.

The legal capacity is the term that is used to refer to the fact that the people that are entering this contract understands what it entails and all that concerns it.

The legal capacity tells us that the parties in the contract are legally competent and they are able to understand the contract that they are to sign as they do so .

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2. A product might fail because it is priced too low.
true
O false

Answers

Answer:

True

Explanation:

Most people take the factor of price into consideration. If something is cheap someone might not buy it thinking it does not have quality.


1. Marcia has been asked to conduct training for a group on telephone etiquette. What steps
should she use to begin her task analysis?

Answers

Answer: Marcia has been asked to conduct training for a group on telephone etiquette. The steps she should use to begin her task analysis are:

1) Firstly, one should pick up a call within three rings.  

2) Then, one should immediately introduce themselves and speak with a very clear voice.

3) One should intently listen to the speaker and take notes, when required.

4) One should use proper language and must not use any informal language. They must also remain cheerful throughout the call.

5) One must always seek the permission of the speaker before putting them on hold or transferring their call.

6) One should be honest if they do not have the answer to the questions asked by the speaker and must not lie.

7) One should be careful of the volume of their voice.

8) One should use headphones during the phone call, only when it is necessary.

9) Lastly, one should always check for voice mails and respond to them positively.

If a company is using a cost-focused pricing strategy, it will set prices for products based on __________________.

A.) What they think customers will like
B.) How much money they want to make
C.) how much it costs to make them
D.)the current economy

Answers

Hey geishahuge thanks for the he sent 862897ehidI Nielsen he had a good character 9HeExplanation:Sent me a video of 7 for the meaning to be a part time game job at 3 in 30th century at a time when the meaning meaning of 9 6th and 6th and the 30th of May 5 and was very happy with with the honey and the rest of us and for all of

What type of structure best describes the organization of your university, or an organization of your choice, in your cultural context or country? What led you to reach your conclusion?
What kind of organization and people does it take to accomplish this from an organizational structure perspective?
Would this ability vary according to the cultural context/country where the organization is located? Why or why not?

Answers

The organization structure that best describes a university is Matrix Structure.

This is because in a university, there's a requirement of both research or academic team and industry-based team, and students of the university need to be in both the teams and have to follow both team's instructions. This type of structure in a university increases students' motivation to study as well as work and manage both technical and managerial works.

Tech company and hardworking, enthusiastic and devoted employees can help to accomplish matrix structure as according to this organizational structure, employees will be answerable to multiple leaders as it keeps an open communication between employee teams which will help in the creation of new products and services as well as increase target audience.

Yes, this ability will vary according to the cultural context or country where the organization is located. This is because people in different countries have different set of values. Also, resources in different countries will determine the functionality of the organization as well as target customers in different countries will determine the efforts made by a team in the journey of innovation of new products and services to launching it in the market.

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I REALLY NEED TO GET THIS DONE BY 1:00PM

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The three factors that would help to establish that a person is a good citizen would be:

The fact that they follow the set laws and regulations in the nation.They are patriotic citizens They pay their taxes.

Who is a good citizen?

A good citizen can be regarded as a person that is effectively performing the role that he or she has as a member of a society. That is as one that belongs to a particular nation.

Such a person is one that would fulfill all of the obligations that they have in the society. They would do this by voting during elections, participating in the jury process and also by paying their taxes.

A good citizen would also be patriotic to the nation and also try as much as possible to carry all of the ideals of their nation by heart at all times.

This citizen would obey all of the laws of the nation and would also be the type of citizens that would help other members of the society.

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Data collected from the economy of Royal City reveals that a 16% increase in income leads to the following changes:
• A 6% increase in the quantity of flops demanded
• A 14% decrease in the quantity of clubs demanded
• A 29% increase in the quantity of aces demanded
Compute the income elasticity of demand for each good and use the dropdown menus to complete the first column in the following table. Then, based on its income elasticity, indicate whether each good is a normal good or an inferior good. (Hint: Be careful to keep track of the direction of change. The sign of the income elasticity of demand can be positive or negative, and the sign confers important information.)
Good Income Elasticity of Demand Normal or Inferior Good
Flops
Clubs
Aces
Which of the following three goods is most likely to be classified as a luxury good ?

Aces
Clubs
Flops

Answers

Based on the data on the economy of Royal City, the income elasticity of demand for Flops, Clubs, and Aces are:

Flops = 0.375Clubs = -0.875Aces = 1.81

The types of goods that the flops, clubs, and aces are include:

Flops - Normal goods Clubs - Inferior good Aces - Normal good

The good that would most probably be a luxury good is Aces.

How to find the income elasticity?

The income elasticity of a good can be found by the formula:

= Change in quantity demanded / Change in income

The income elasticity of demand of flops is:

= 6% / 16%

= 0.375

The income elasticity of demand of clubs is:

= -14% / 16%

= -0.875

The income elasticity of demand of aces is:

= 29% / 16%

= 1.81

Normal goods would have a positive income elasticity of demand so Flops and Aces are normal goods.

Inferior goods would have negative income elasticity which means that clubs are inferior goods.

Luxury goods have a very high income elasticity of demand so aces must be luxury goods.

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