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Economics, Accounting & Business: Post your doubts here!

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Selling goods at less than the cost of production in order for an economy to maintain its international market share! I hope im right :O :confused:

Ok some people are saying that they sell it at a lower price coz in the home country they sell it at a higher price but some people say that its wrong
AND also some say that the government he;ps them by giving export subsidies while some say that dumping is done illeagally and the gvrmnt dsnt help
Really confused
 
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Can anyone explain me wat exactly dumping is
Rele confused different people give different answers . My heads spiining. Quickly :( :(
Dumping is actually an illegal practice. It means that the firms exporting its product lowers the price level to an extent that it does not even cover it's cost of production in the short run. This is so eliminate competition from local domestic product manufactured in the country where firm is exporting. When the domestic firms are out of market, the firm then again raises the price level. This is usually done by the help of government of the exporting firm as the government provides subsidy to the firm which is incurring loss by lowering the price below the cost of production.
 
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Ok some people are saying that they sell it at a lower price coz in the home country they sell it at a higher price but some people say that its wrong
AND also some say that the government he;ps them by giving export subsidies while some say that dumping is done illeagally and the gvrmnt dsnt help
Really confused

Ok so wat abt these two facts abt dumpong?
 
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the thing here is that they have different profit margins in 2006 and 2007
when you prepare the manufacturing account, you should get 822000
they have said Helen has transferred at a total price of 1126140, which means the difference is the factory profit, ie 304140

now in the trading account, remember stocks should be valued at transfer price, that is with the factory profit included
in 2006, it looks like this:
cost price 100
gross profit 29
selling price 129
stocks should be valued at 129

but dont use this cost structure, because they are using a different proft margin in 2007? how do you know that? simple
look at the manufacturing account
822000*X%=304140
304140/822000 *100= 37
the new cost structure is
CP 100
GP 37
SP 137

opening stock is 12300, notice it says at "cost" which means without the profit, so find it with the profit using the OLD cost structure, because this years opn stock was last yrs closing stock which means they used the old structure
so it would be
(12300*129)/100=15867

ill stop here, let me know if you understand upto this point, hope i havent confused u even more :/
 
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the thing here is that they have different profit margins in 2006 and 2007
when you prepare the manufacturing account, you should get 822000
they have said Helen has transferred at a total price of 1126140, which means the difference is the factory profit, ie 304140

now in the trading account, remember stocks should be valued at transfer price, that is with the factory profit included
in 2006, it looks like this:
cost price 100
gross profit 29
selling price 129
stocks should be valued at 129

but dont use this cost structure, because they are using a different proft margin in 2007? how do you know that? simple
look at the manufacturing account
822000*X%=304140
304140/822000 *100= 37
the new cost structure is
CP 100
GP 37
SP 137

opening stock is 12300, notice it says at "cost" which means without the profit, so find it with the profit using the OLD cost structure, because this years opn stock was last yrs closing stock which means they used the old structure
so it would be
(12300*129)/100=15867

ill stop here, let me know if you understand upto this point, hope i havent confused u even more :/
Jazakallah bro! Explanation was good Masha Allah! But i managed with the sum... Thanks again :)
 
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View attachment 40123
may/june 2009 paper 3 > how to do this :( :/ o_O
And this ??? please help .... o_O
View attachment 40124
27)
it says product requires 1 kg of material
ignore the 8$, because its an old value
the product requires only 1 kg but worker starts with 1.5kg, which means 0.5 is wastage
cost of materials is 10*1.5=15$
scrap is 2*0.5=1$
therefore 15-1=14$
ans is c
 
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Q12 - ive done that and i get C. I know how to but kinda finding it difficult to type.. give me a while on that..

Q27 - Heres how it goes -
The trick here is this, the worker starts with 1.5kg of material, whereas 1 unit uses only 1kg. which means 0.5 kg is scrap.
So $10*1.5 is the standard cost = $15
Cost recovery is 0.5kg * 2 = $1
Therefore net amount = 15-1 = $14 = C
View attachment 40123
may/june 2009 paper 3 > how to do this :( :/ o_O
And this ??? please help .... o_O
View attachment 40124
 
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