Answer:
e
Explanation:
Saturn Corporation issued $300,000 par value 10-year bonds at 107 on January 1, 20X3, which Star Corporation purchased. Pluto Corporation owns 65% of Saturn's voting shares. On Jan 1, 20X7, Pluto Corporation purchased $120,000 face value of Saturn bonds from Star for $118,020. On the date Pluto purchased the bonds, the bonds' carrying value on Saturn's book was $126,019. The bonds pay 12 percent interest annually on December 31. The preparation of consolidated financial statements for Saturn and Pluto at December 31, 20X9, required the following consolidating entry:
Based on the information given above, what amount of gain or loss on bond retirement is included in the 20X7 consolidated income statement?
a. $8,000 gain
b. $5,200 gain
c. $8,000 loss
d. $5,200 loss
Answer:
a. $8,000 gain
Explanation:
The face value of the bonds purchased by Pluto Corporation are $120,000. The bonds are purchased at discount of $1,980. The bonds have carrying value of $126,019 at the time of purchase. The net gain or loss is calculated by the difference between two values.
$120,000 - $126,019 - $6,019
The discount amount of the bond was $1,980.
Total gain on the bonds approximately ($6,019 + $1,980) = $8,000
Direct materials $10 Direct labor $6 Variable manufacturing overhead $4 Fixed manufacturing overhead per year $220,000 Selling and administrative expenses: Variable selling and administrative expense per unit sold $6 Fixed selling and administrative expense per year $61,000 Year 1 Year 2 Units in beginning inventory 0 1,000 Units produced during the year 11,000 10,000 Units sold during the year 10,000 7,000 Units in ending inventory 1,000 4,000 The net operating income (loss) under variable costing in Year 1 is closest to:
Answer:
Results are below.
Explanation:
I will assume a selling price per unit of $60.
First, we need to calculate the total unitary variable cost:
Total unitary variable cost= direct material + direct labor + varaiboe overhead + variable selling and administrative expense
Total unitary variable cost= 10 + 6 + 4 + 6
Total unitary variable cost= $26
Now, we can structure the income statement:
Sales= 10,000*60= 600,000
Total variable cost= 10,000*26= ( 260,000)
Contribution margin= 340,000
Fixed manufacturing overhead per year= (220,000)
Fixed selling and administrative expense per year= (61,000)
Net operating income= 59,000
Bruce is a nonexempt employee at Grissom Industries, where he works in both the manufacturing and design departments. He is married with three withholding allowances and is paid biweekly. He earns $25 per hour in the manufacturing department and $31.50 per hour in the design department. During the most recent biweekly pay period, he worked a total of 92 hours, 20 of which were in the design department. All overtime was in the manufacturing department. What is his gross pay?
A) $2,580.00.
B) $2,638.50.
C) $2,697.00.
D) $3,147.00.
Answer:
A) $2,580.00.
Explanation:
The computation of the gross pay is shown below:
Here Bruce is paid every two weeks = 80 hours
Here 92 hours worked represents that 12 were overtime.
For Manufacturing Department:
Regular Pay:
= $25 × 60
= $1500
Overtime Pay:
= ($25 × 1.5) × 12
= $450
For Design Department:
Regular Pay:
= $31.50 × 20
= $630
Now
= Total Design + Manufacturing Departments:
= $1500 + $450 + $630
= $2,580
Predetermined Overhead Rate, Application of Overhead to Jobs, Job Cost
On April 1, Sangvikar Company had the following balances in its inventory accounts:
Materials Inventory $12,750
Work-in-Process Inventory 21,060
Finished Goods Inventory 8,500
Work-in-process inventory is made up of three jobs with the following costs:
Job 114 Job 115 Job 116
Direct materials $2,384 $2,603 $3,085
Direct labor 1,800 1,420 4,420
Applied overhead 1,260 994 3,094
During April, Sangvikar experienced the transactions listed below.
Materials purchased on account, $28,920.
Materials requisitioned: Job 114, $16,800; Job 115, $12,460; and Job 116, $5,410.
Job tickets were collected and summarized: Job 114, 170 hours at $11 per hour; Job 115, 200 hours at $14 per hour; and Job 116, 100 hours at $19 per hour.
Overhead is applied on the basis of direct labor cost.
Actual overhead was $4,535.
Job 115 was completed and transferred to the finished goods warehouse.
Job 115 was shipped, and the customer was billed for 125 percent of the cost.
Required:
1. Calculate the predetermined overhead rate based on direct labor cost.
% of direct labor cost
2. Calculate the ending balance for each job as of April 30. When required, round your answers to the nearest dollar. Use your rounded answers in subsequent computations, if necessary.
Ending Balance
Job 114 $
Job 115 $
Job 116 $
3. Calculate the ending balance of Work in Process as of April 30. When required, round your answer to the nearest dollar.
$
4. Calculate the cost of goods sold for April. When required, round your answer to the nearest dollar.
$
5. Assuming that Sangvikar prices its jobs at cost plus -25 percent, calculate the price of the one job that was sold during April. Round to the nearest dollar.
$
Answer:
See below
Explanation:
1. Predetermined overhead rates
= Applied overhead / Direct labor
Job 114
Applied overhead / direct labor
= $1,260/1,800
= 70%
Job 115
Applied overhead / direct labor
= $994/1,420
= 70%
Job 116
Applied overhead / direct labor
= $3,094/4,420
= 70%
2 and 3 Ending balance of each job and work in process as of April 30th.
Job 114. Job116
Opening. $2,384. $3,085
Materials
Purchases $16,800. $5,410
Direct labor
($1,800+$1,800) $3,600. $5,740
Actual $2,520 $4,018
Overhead
at 59.36%
Balance $25,304. $18,253
• Note
The whole of job 115 has been sold out.
• Actual overhead = Actual overhead / direct labor
= $4,535/7,640
= 59.36%
4 Cost of goods sold in April
Job 115
Opening materials. $2,603
Purchases. $12,460
Direct labor
($1,420 + $3,080). $4,500
Actual overhead. $3,150
at 59.36%
Cost of goods sold $22,713
5. Selling price of job
Cost of job 115 = $22,713
Selling price = 1.25% × $22,713 = $28,391
The aggregate demand aggregate supply mode is quite useful tool for us to understand the economy. So far, we saw only one change at a time, however, in reality, there can be multiple shocks at the same time. The economy was in long run equilibrium. Assuming all else equal, world scientists collaborated to invent a vaccine for everyone to be safe from deadly virus, raising productivity. This makes consumers and businesses optimist about the economy. At the same time, commodity market, namely oil market is calm, maintaining a stable supply.
1. Given above scenario, what do you think will happen to the LRAS, SRAS and AD curves in each in short run?
2. And what would happen to price level and output in the economy?
3. What about in long run?
Answer:
Explained below
Explanation:
1) From the question, we can deduce that in the short run, there will likely be news of the discovery/invention of a super vaccine which will make the consumers and the businesses to be optimistic about the future of the economy. Therefore, this will in turn lead to an increase in consumption by consumers and thus also lead to an producers making an increase in investment.
2) From answer 1 above, since there is an increase in consumption as well as investment, this will in turn also lead to an increase in the aggregate demand of the economy. Whereas, we are told that the oil market is calm and therefore we can say it does not have an effect on the supply curve.
From the first image attached, increase in the aggregate demand led to an increase in price level from point P to P1 on the y-axis while output output level increased from point Y to point Y1 on the x-axis.
3) In the long run, due to the increase in demand in the short run that makes the supply curve shift to its right, it means the producers will have more of the goods produced. This will in turn reduce the price to its initial level and also increase the output level. From the second diagram, this will lead to a shift long run aggregate supply from LRAS to LRAS1 on the x-axis.
Levi is replying to an email a customer sent seeking information about his company’s products. Which greeting should he avoid using in a business email?
A.
Hi
B.
Hey
C.
Hello
D.
Dear
Select the correct answer.
Which statement is true in the context of business etiquette for sending digital messages?
A.
Digital messages should use abbreviations.
B.
Digital messages should be informal.
C.
Digital messages should be courteous.
D.
Digital messages should use a colorful font.
Select the correct answer.
Which of these messages would be considered inappropriate for business communication?
A.
Good night
B.
Goodbye
C.
OK, bye
D.
See you tomorrow
Martinez Corporation engaged in the following cash transactions during 2017
Sale of land and building $191,000
Purchase of treasury stock 40,000
Purchase of land 37,000
Payment of cash dividend 95,000
Purchase of equipment 53,000
Issuance of common stock 147,000
Retirement of bonds 100,000
Compute the net cash provided (used) by investing activities
Answer:
$101,000
Explanation:
Computation of the net cash provided by investing activities
Sale of land and building
$191,000
Purchase of land
($37,000)
Purchase of equipment
($53,000)
Net cash flow from investing activities
$101,000
Celestin Manufacturing Company incurred $22,000 of depreciation on its manufacturing equipment during its first year of operation. During this year the company made 11,000 units of product and sold 3,700 units of product. Based on this information alone the company would show Multiple Choice $22,000 of depreciation expense on its income statement. $7,400 of cost of goods sold expense on its income statement. $22,000 of inventory on its balance sheet. $7,400 of inventory on its balance sheet.
Answer:
$7400 of cost of goods sold expense on its income statement.
Explanation:
Calculation to determine the cost of goods sold
Cost of goods sold expense=($22000 / 11000 units)x 3,700 units sold
Cost of goods sold expense= $2 per unit x 3,700 units sold
Cost of goods sold expense=$7400
Therefore Based on this information alone the company would show: $7400 of cost of goods sold expense on its income statement.
you recently increased you're spending on marketing by 10%. you now spend 5500 per month. revenue increase by 1000 per month and you're gross margin percentage is 70%. All other expenses stayed consant. Did the increase pay off?
Answer:
Answer is yes
Explanation:
Lucas Corporation uses the weighted-average method in its process costing system. Data concerning the first processing department for the most recent month are listed below: Beginning work in process inventory: Units in beginning work in process inventory 900 Materials costs $ 9,600 Conversion costs $ 7,700 Percent complete with respect to materials 60 % Percent complete with respect to conversion 45 % Units started into production during the month 8,100 Units transferred to the next department during the month 6,900 Materials costs added during the month $ 115,800 Conversion costs added during the month $ 120,500 Ending work in process inventory: Units in ending work in process inventory 2,100 Percent complete with respect to materials 75 % Percent complete with respect to conversion 20 % The cost per equivalent unit for conversion costs for the first department for the month is closest to:
Answer:
$17.51
Explanation:
Note that Lucas Corporation uses the weighted-average method
Equivalent units
Conversion costs = 6,900 x 100 % + 2,100 x 20 %
= 7,320
Total Cost
Conversion costs = $ 7,700 + $ 120,500
= $128,200
Cost per equivalent unit
Cost per equivalent unit = $128,200 / 7,320 = $17.51
Conclusion
The cost per equivalent unit for conversion costs for the first department for the month is closest to $17.51.
Edward and Tony are fraternity brothers. Edward has a dinner party to celebrate getting a new job. Tony helps Edward out with the dinner party, coming 3 hours before, helping with cooking, buying the ingredients for the dinner, and party set up, and staying after, to help with clean up after. The next day, Edward promises Tony that Edward will pay Tony $100 because of all the help Tony provided the day before at the dinner party. Is Edward's promise enforceable? Why or why not?
Answer:
Edward's promise is not enforceable. Tony had already performed the act. He did not perform based on Edward's promise. He performed because of their fraternal brotherhood.
Explanation:
This situation looks like a unilateral contract whereby Edward makes a promise to Tony to pay him $100. However, we observe that Tony did not perform his actions in consideration of this reward. He performed because they were fraternity brothers. Therefore, Tony cannot enforce Edward's promise in any court. It is only left for Edward to fulfill his promise as a gentleman, not because he is legally obliged to.
Kenwood Homes, Inc., allows employees to purchase, at cost, manufacturing materials, such as metal and lumber, for personal use. To purchase materials for personal use, an employee must complete a materials requisition form, which must then be approved by the employee's immediate supervisor. Cheryl Long, an assistant cost accountant, charges the employee an amount based on Kenwood's net purchase cost. Cheryl Long is in the process of replacing a deck on her home and has requisitioned lumber for personal use, which has been approved in accordance with company policy. In computing the cost of the lumber, Long reviewed all the purchase invoices for the past year. She then used the lowest price to compute the amount due the company for the lumber. Discuss whether Long behaved in an appropriate manner.
Answer:
Cheryl did not act ethically because she used the lowest possible cost in order to calculate her own purchase cost. She should probably use an average cost or any other inventory management system (e.g. FIFO or LIFO). instead, she used the lowest possible price for her own personal benefit.
Explanation:
The Sisyphean Company's common stock is currently trading for $25.50 per share. The stock is expected to pay a $2.80 dividend at the end of the year and the Sisyphean Company's equity cost of capital is 10%. If the dividend payout rate is expected to remain constant, then the expected growth rate in the Sisyphean Company's earnings is closest to
Answer:
0.98%
Explanation:
according to the constant dividend growth model
price = d1 / (r - g)
d1 = next dividend to be paid
r = cost of equity
g = growth rate
the growth rate can be determined from the above equation
$25.50 = $2.8 / ( 0.1 -g)
Multiply both sides of the equation by 0.1 - g
$25.50( 0.1 -g) = $2.8
Divide both sides by $25.50
0.1 - g = 0.1098
g = 0.1 - 0.1098
g = - 0.0098
g = -0.98%
In the business world, people are often measured by their:
Answer:
Technical Skills
Explanation:
define securitization.
Consider an economy with two types of firms, S and I. S firms always move together, but I firms move independently of each other. For both types of firms there is a 70% probability that the firm will have a 20% return and a 30% probability that the firm will have a -30% return. The standard deviation for the return on an portfolio of 20 type S firms is closest to ________.
Answer: 23%
Explanation:
First calculate the expected return:
= (70% * 20%) + (30% * (-30%))
= 5%
Then use that to calculate variance:
Variance:
= (70% * (20% - 5%)²) + (30% * (-30% - 5%)²)
= 5.25%
Standard Deviation:
= √5.25%
= 23%
Why are the incentives of a supplier the opposite of the incentives of a demander
Answer:
The incentives of a supplier are the opposite of the incentives of a demander because it is a relationship whose nature makes supply and demand inversely proportional to each other: the higher the supply, the lower the demand for each product and the lower its price; While the lower the supply, the greater the demand for each product and the higher its price. Thus, in many cases, suppliers seek to restrict supply to maximize profits, while demanders seek to lower prices through a greater quantity of goods offered.
Economically, the government divides its earning marks into ______, each of which lasts three months.
Answer:
quarters
Explanation:
Jan is a music teacher at an elementary school. She writes a play for her students to perform.
The next year, she learns that another elementary school copied and is performing the same
play. Jan never registered or published the play. Which of the following is true?
O A. Jan can sue for copyright infringement.
B
None of the above
O c.
Jan can sue for an injunction to stop the other school from performing her play
OD
Jan can't do anything since she didn't publish the play
O E.
Jan can't do anything since she didn't register her copyright
Answer:
E.
Explanation:
E. because if she report it people will say she listen to the play and copied it to make it look like her's.
Adams Manufacturing allocates overhead to production on the basis of direct labor costs. At the beginning of the year, Adams estimated total overhead of $433,200; materials of $418,000 and direct labor of $228,000. During the year Adams incurred $457,200 in materials costs, $451,600 in overhead costs and $232,000 in direct labor costs. Compute the amount of under- or overapplied overhead for the year.
a. $10,800 overapplied.
b. $18,400 overapplied.
c. $10,800 underapplied.
d. $18,400 underapplied.
Answer:
see below
Explanation:
Given that cost incurred = $457,200
Overhead
= $457,200 - $433,200
Keyser Corporation, which has only one product, has provided the following data concerning its most recent month of operations: Selling price $133 Units in beginning inventory 950 Units produced 8,850 Units sold 8,950 Units in ending inventory 850 Variable costs per unit: Direct materials $ 29 Direct labor $ 46 Variable manufacturing overhead $ 10 Variable selling and administrative expense $ 20 Fixed costs: Fixed manufacturing overhead $ 70,800 Fixed selling and administrative expense $164,200 The company produces the same number of units every month, although the sales in units vary from month to month. The company's variable costs per unit and total fixed costs have been constant from month to month. What is the net operating income for the month under absorption costing
Answer:
$93
Explanation:
Product cost under absorption costing = all manufacturing overheads
= $93
This is the Cost per unit manufactured
The following transactions were completed by the company. The company completed consulting work for a client and immediately collected $6,700 cash earned. The company completed commission work for a client and sent a bill for $5,200 to be received within 30 days. The company paid an assistant $2,000 cash as wages for the period. The company collected $2,600 cash as a partial payment for the amount owed by the client in transaction b. The company paid $940 cash for this period's cleaning services. Required: Enter the impact of each transaction on individual items of the accounting equation. (Enter decreases to account balances with a minus sign.)
Answer:
The impact of each transaction on individual items of the accounting equation is as follows:
1. Cash $6,700 Consulting Revenue $6,700:
Assets (Cash +$6,700) = Liabilities + Equity (Retained Earnings $6,700)
2. Accounts Receivable $5,200 Commission Revenue $5,200:
Assets (Accounts Receivable +$5,200) = Liabilities + Equity (Retained Earnings $5,200)
3. Wages Expense $2,000 Cash $2,000:
Assets (Cash -$2,000) = Liabilities + Equity (Retained Earnings -$2,000)
4. Cash $2,600 Accounts Receivable $2,600:
Assets (Cash +$2,600 Accounts Receivable -$2,600) = Liabilities + Equity
5. Cleaning Expense $940 Cash $940:
Assets (Cash -$940) = Liabilities + Equity (Retained Earnings -$940)
Explanation:
a) Data and Calculations:
Accounts affected by each transaction:
1. Cash $6,700 Consulting Revenue $6,700
2. Accounts Receivable $5,200 Commission Revenue $5,200
3. Wages Expense $2,000 Cash $2,000
4. Cash $2,600 Accounts Receivable $2,600
5. Cleaning Expense $940 Cash $940
b) The accounting equation is Assets = Liabilities + Equity. It is the basis of accounting, debit and credit sides of accounts or the double-entry system of accounting. It is always in balance with each business transaction when they are properly recorded in the journals and correctly posted to the general ledger.
When crafting a business message with strong reasoning, it is important to back claims with Multiple choice question. broad generalizations. your own beliefs.. supporting facts. colorful diagrams.
Answer:
supporting facts
Explanation:
A business message with strong reasoning has as main objectives to convince a consumer to close a deal or an employee to perform certain tasks for example, the objective is always to support an idea and positively impact and convince the public of something.
Therefore, the most suitable option for a business message with strong reasoning is to use supporting facts, as the recipient of the message will feel much more transparency and security when believing in your message if it is supported by concrete facts that support it, and this can be a strong argument to strengthen and reaffirm your idea so that it is more convincing and supported.
define subprime mortgages.
Subprime mortgage, a type of home loan extended to individuals with poor, incomplete, or nonexistent credit histories. Because the borrowers in that case present a higher risk for lenders, subprime mortgages typically charge higher interest rates than standard (prime) mortgages
economics is the study of a society's financial institutions. true or false
Answer:
False
Explanation:
Economics is the study of a society's financial institutions. This statement is False.
What is Economics?Economics is a social science that examines how products and services are produced, distributed, and consumed as well as the decisions that people, corporations, governments, and nations make when allocating resources.
While macroeconomics focuses on the behavior of the economy as a whole on an aggregate level, microeconomics focuses on the decisions made by individuals and enterprises.
Hesiod, a Greek farmer, and poet who lived in the eighth century B.C. is one of the oldest economists known to have written about the necessity for efficient allocation of labor, resources, and time to combat scarcity. The first modern Western economic ideas emerged with the publication of Adam Smith's book An Inquiry Into the Nature and Causes of the Wealth of Nations in 1776.
To learn more about Economics follow the link.
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Capital assets used by an enterprise fund should be accounted for in the:_________.
a. Business-type activities journal but no depreciation on the capital assets should be recorded.
b. Enterprise fund and depreciation on the capital assets should be recorded
c. Governmental activities journal and depreciation on the capital assets should be recorded
d. Enterprise fund but no depreciation on the capital assets should be recorded
Answer:
b. Enterprise fund and depreciation on the capital assets should be recorded
Explanation:
The capital assets used by the enterprise fund should be included in the enterprise fund and the depreciation on the capital assets should be recorded.Depreciation on capital assets should be recorded based on the useful life of the asset appraisal.so correct answer b. Enterprise fund and depreciation on the capital assets should be recordedAssume that the CBL is not marketable at split-off but must be planed and sized at a cost of $300,000 per production run. During this process, 10,000 units are unavoidably lost and have no value. The remaining units of CBL are salable at $14 per unit. The RBL, although salable immediately at the split-off point, is coated with a tarlike preservative that costs $200,000 per production run. The RBL is then sold for $12 each. Using the net realizable value basis, how much of the completion costs should be assigned to each unit of CBL
Question
Northwest Building Products (NBP) manufactures two lumber products from a joint milling process: residential building lumber (RBL) and commercial building lumber (CBL). A standard production run incurs joint costs of $350,000 and results in 100,000 units of RBL and 90,000 units of CBL. Each RBL sells for $13 per unit and each CBL sells for $13 per unit.
Assume that the CBL is not marketable at split-off but must be planed and sized at a cost of $300,000 per production run. During this process, 10,000 units are unavoidably lost and have no value. The remaining units of CBL are salable at $14 per unit. The RBL, although salable immediately at the split-off point, is coated with a tarlike preservative that costs $200,000 per production run. The RBL is then sold for $12 each. Using the net realizable value basis, how much of the completion costs should be assigned to each unit of CBL
Answer:
Completion cost per unit of CBL=$5.82
Explanation:
Joint cost is the total cost incurred from the start of start of production process up until the split off point where two or more products result from the same process. The joint products in this case are CBL and RBL
The completion cost of CBL is the sum of the apportioned joint cost at the split-off point plus the further processing cost
Completion cost = apportioned joint cost + further processing cost
Joint cost can be apportioned using the net realizable value as follows
Total net realizable value at the split of point for the two product=
RBL =$13 × 100,000=1,300,000
CBL =$13 × 90,000=1,170,000
Total 2,470,000
Apportioned joint cost to CBL = sales value of CBL/Total sales of product× joint cost
= (1,170,000/2,470,000)*$350,000= 165,789.47
Completion cost = 165,789.47 + 300,000 = $465,789.47
Completion cost per unit of CBL = Completion cost/Expected unit
=$465,789.47/(90,000-10,000) units
=$5.82
Note that the expected units is that available for sale after normal loss as be accounted for. So, we deduct the loss units
Completion cost per unit of CBL=$5.82
Riverbed Corporation has the following accounts included in its December 31, 2020, trial balance: Accounts Receivable $111,900, Inventory $295,000, Allowance for Doubtful Accounts $9,080, Patents $80,900, Prepaid Insurance $9,790, Accounts Payable $79,100, and Cash $32,000. Prepare the current assets section of the balance sheet. (List Current Assets in order of liquidity.)
Answer:
$439,610
Explanation:
Preparation for the current assets section of the balance sheet
Current assets
Cash $32,000
Accounts Receivable$111,900
Allowance for Doubtful Accounts($9,080)$102,820
($111,900-$9,080)
Inventory $295,000
Prepaid Insurance $9,790
Total current assets $439,610
($32,000+$102,820+$295,000+$9,790)
Therefore the current assets section of the balance sheet is $439,610
The Pan American Bottling Co. is considering the purchase of a new machine that would increase the speed of bottling and save money. The net cost of this machine is $48,000. The annual cash flows have the following projections. Use Appendix B and Appendix D for an approximate answer but calculate your final answer using the formula and financial calculator methods. Year Cash Flow 1 $ 18,000 2 22,000 3 25,000 4 12,000 5 7,000 a. If the cost of capital is 9 percent, what is the net present value of selecting a new machine
Answer:
$19,385.93
Explanation:
Net present value is the present value of after-tax cash flows from an investment less the amount invested.
NPV can be calculated using a financial calculator
Cash flow in year 0 = $-48,000.
Cash flow in year 1 = $18,000.
Cash flow in year 2 = $22,000.
Cash flow in year 3 = $25,000.
Cash flow in year 4 = $12,000.
Cash flow in year 5 = $7,000.
I = 9%
NPV = $19,385.93
To find the NPV using a financial calculator:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. after inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.
3. Press compute
Suppose the price of gasoline increases and that sport utility vehicles get poor gas mileage compared to other available cars. One would expect: Select one: a. the demand for gasoline to decrease. b. the demand for sport utility vehicles to decrease. c. the demand for sport utility vehicles to increase. d. the quantity of sport utility vehicles demanded to decrease.
Answer:
b
Explanation:
If the sport utility vehicle has a bad mileage, it means that it burns fuel quickly, so you would have to buy gasoline more frequently.
sport utility vehicle is a complement for gasoline
Complementary goods are goods that are consumed together
If the price of gasoline increases, it would become more expensive to maintain sport utility vehicle. As a result, the demand for sport utility vehicle would decrease. this would shift the demand curve for sport utility vehicle inward.
A increase in the price of gasoline would result in a decrease in the quantity demanded of gasoline and not a reduction in demand.