Question
In: Economics
In mid-December 2018, the manager of Beau Apparel was preparing the firm’s production plan for the...
In mid-December 2018, the manager of Beau Apparel was preparing the firm’s production plan for the first quarter of 2019. The fore cast of the wholesale price of shirts would be used in making the production decision. The marketing researchers provided the manager with three price forecasts based on three different assumptions about economic conditions in the first quarter of 2019.
High: $20 Medium: $15 Low: $10
The total fixed costs of the production is $30,000. Beau Apparel also estimated an average variable cost function as followed:
AVC=20-0.003Q+0.00000025Q2
Under the high-price forecast, middle-price forecast and
low-price forecast, answer the following questions
respectively:
(a) Should the firm produce or shut down?
(b) If production is warranted, how much should the firm
produce?
(c) Calculate the estimated profit or loss under the three forecasted price levels.
Solutions
Rahul Sunny answered 7 months agoRelated Solutions
You are auditing a retail apparel company as of December 2018. The inventory for black down...
You are auditing a retail apparel company as of December 2018.
The inventory for black down jackets show 1,263 jackets. When you
look at the invoices for the jackets from the wholesaler from which
the company purchases those jackets, you see the following:
Inventory #
Date
Quantity
Unit Price
Total
12732
10/22/17
1,000
$282
282,000
12844
12/03/18
800
$277
221,600
12905
01/28/18
600
$275
165,000
1.Assuming the company uses LIFO as the inventory valuation
method, determine the cost of inventory...
Cone Corporation is in the process of preparing its December 31, 2018, balance sheet. There are...
Cone Corporation is in the process of preparing its December 31,
2018, balance sheet. There are some questions as to the proper
classification of the following items:
$56,000 in cash restricted in a savings account to pay bonds
payable. The bonds mature in 2022.
Prepaid rent of $30,000, covering the period January 1, 2019,
through December 31, 2020.
Note payable of $212,000. The note is payable in annual
installments of $26,000 each, with the first installment payable on
March 1,...
A manager at a furniture production plant created an incentive plan for her carpenters in order...
A manager at a furniture production plant created an incentive
plan for her carpenters in order to decrease the number of defects
in the furniture production. She wants to check if the incentive
plan worked. The manager selected 9 carpenters at random, recorded
their annual defects before and after the incentive and came up
with the following:
Salesperson
Before
After
Adrian Gilbert
29
17
Nikki Edwards
33
23
Abigail Gage
38
19
Marc Phillips
25
15
Orla Dille
26
32...
Colander Co is preparing its financial statements for the year ended 31 December 2018 and has...
Colander Co is preparing its financial statements for the year
ended 31 December 2018 and has a number of issues to deal with
regarding non-current assets.
(1) Colander has suffered an impairment loss of €90,000 to one
of its cash-generating units. The carrying amounts of the assets in
the cash-generating unit prior to adjusting for impairment are:
€'000
Goodwill
60
Land and buildings
100
Plant and machinery
50
Net current assets
10
(2) During the year to 31 December 2018...
I am preparing the working papers for the December 31, 2018 year-end audit to present to...
I am preparing the working papers for the December 31, 2018
year-end audit to present to the company’s auditors when they
arrive late next week. In reviewing the draft financial statements
and other information, I have identified a number of issues that
need to be addressed:
Inventory Errors: in reviewing the documentation obtained
during the December 31, 2018 inventory count for the heavy
equipment division, I discovered a number of errors. The details
are provided below.
We received an invoice...
MAJOR LEAGUE APPAREL Balance Sheet (Stockholders' Equity Section) December 31, 2018 Stockholders' equity: Preferred stock $570,000...
MAJOR LEAGUE APPAREL
Balance Sheet
(Stockholders' Equity Section)
December 31, 2018
Stockholders' equity:
Preferred
stock
$570,000
Common
stock
110,000
Additional
paid in capital
7,401,500
Total
paid-in capital
8,081,500
Retained
earnings
Treasury
stock
Total stockholders'
equity
$8,081,500
Date
General Journal
Debit
Credit
December
01, 2018
Dividends
Dividends
payable
Major League Apparel has two classes of stock authorized: 6%,
$10 par preferred, and $1 par value common. The following
transactions affect stockholders’ equity during 2018, its first
year of operations: January 2...
Port Inc. is preparing its annual budgets for the year ending December 31, 2018. Accounting assistants...
Port Inc. is preparing its annual budgets for the year ending
December 31, 2018. Accounting assistants furnish the data shown
below.
Product A
Product B
Sales budget:
Anticipated volume in units
300,000
400,000
Unit selling price
$10
$15
Production budget:
Desired ending finished goods units
20,000
10,000
Beginning finished goods units
15,000
5,000
Direct materials budget:
Direct materials per unit (pounds)
4
2
Desired ending direct materials pounds
20,000
15,000
Beginning direct materials pounds
30,000
10,000
Cost per pound
$2...
Beale Management has a noncontributory, defined benefit pension plan. On December 31, 2018 (the end of...
Beale Management has a noncontributory, defined benefit pension
plan. On December 31, 2018 (the end of Beale's fiscal year), the
following pension-related data were available:
Projected Benefit Obligation
($ in millions)
Balance, January 1, 2018
$
620
Service cost
64
Interest cost, discount rate, 5%
31
Gain due to changes in actuarial assumptions in 2018
(15
)
Pension benefits paid
(31
)
Balance, December 31, 2018
$
669
Plan Assets
($ in millions)
Balance, January 1, 2018
$
640
Actual...
Beale Management has a noncontributory, defined benefit pension plan. On December 31, 2018 (the end of...
Beale Management has a noncontributory, defined benefit pension
plan. On December 31, 2018 (the end of Beale's fiscal year), the
following pension-related data were available:
Projected Benefit
Obligation
($
in millions)
Balance, January 1, 2018
$
400
Service cost
42
Interest cost, discount rate,
5%
20
Gain due to changes in actuarial
assumptions in 2018
(11
)
Pension benefits paid
(20
)
Balance, December 31, 2018
$
431
Plan Assets
($
in millions)
Balance, January 1, 2018
$
420
Actual...
Abbott and Abbott has a noncontributory, defined benefit pension plan. At December 31, 2018, Abbott and...
Abbott and Abbott has a noncontributory, defined benefit pension
plan. At December 31, 2018, Abbott and Abbott received the
following information:
Projected Benefit
Obligation
($
in millions)
Balance, January 1
$
160
Service cost
24
Interest cost
16
Benefits paid
(11
)
Balance, December 31
$
189
Plan Assets
Balance, January 1
$
80
Actual return on plan
assets
11
Contributions 2018
24
Benefits paid
(11
)
Balance, December 31
$
104
The expected long-term rate of return on plan...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- "Ethical Considerations" Please respond to the following: Reflect upon the responsibilities placed on auditors by the...
- A Japanese company has a bond outstanding that sells for 93 percent of its ¥100,000 par...
- What is the difference among the principles of modularization, abstraction, encapsulation, and separation of interface and...
- An investment project costs $20,100 and has annual cash flows of $4,400 for six years. ...
- PUT IN JAVA PROGRAMMING The StockB class: Design a class named StockB that contains the following...
- Draw a DFA for the following ( ∑ = {0,1}): Set of all strings with.
- In the article from Forbes notes that the goal of a leader is not to clone...
ADVERTISEMENT