QUESTION 20 The South Division reported income from operations of $400,000 and total service department charges of $200,000. As a result, a. the gross profit margin was $200,000 b. income from operations before service department charges was $600,000 c. net income was $200,000 d. consolidated net income was $200,000

Option (b) is correct.

Explanation:

Given that,

Income from operations = $400,000

Total service department charges = $200,000

The income from operations already takes into account the service department charges which means that it is already deducted. Hence, if we add the total service department charges to the income from operations then we can get the income from operations before service department charges.

So, the income from operations before service department charges is as follows:

= Income from operations + Total service department charges

= $400,000 + $200,000

= $600,000

answer: in the short-run firms will respond by raising the price of turkey.

explanation: initially the long-run equilibrium is at a price of $5 per pound of turkey and a quantity of 50 million pounds per year. now, when webmd claims that a protein found in turkey will increase your expected lifespan by 4 years. the consumers demand for turkey will increase at every price shifting the demand curve to the right from d1 to d2. while, there will be no change in the supply curve in the short-run as it is not possible for producers to adjust supply so quickly. as a result the new equilibrium will occur at a higher price and a higher quantity of turkey.

thus, in the short run firms will respond by increasing the price of turkey, selling more quantity at a higher price and earning economic profits.