Identify basic cost behavior patterns and explain how changes in activity level affect total cost and unit cost?

2.) Fill in the following table: Show work if possible

b.) Now suppose this firm is in a perfectly competitive industry. The market price of the output is $25. How many units of output will this firm choose to produce in the short run? What is the profit at that level of output?

14.
Consider a monopoly facing the following demand, marginal revenue, total cost, and marginal cost curves:

Demand curve: P = 12 – 0.002 Q

Marginal revenue curve: MR = 12 – 0.004 Q

• Total cost curve: TC = 3Q +0.0005Q²

Marginal cost curve: MC = 3 + 0.001 Q

a. Calculate the profit maximizing output of this monopoly. Briefly explain your answer.

b. What is the socially efficient output level? Briefly explain your answer.

c. Suppose the government wants to adopt a price ceiling to induce this monopoly to produce at the socially efficient output level. Briefly explain what the level of this price ceiling should be and what will be the economic profit of this monopoly under this price ceiling.

The following equations describe a firm’s demand, marginal revenue, total cost, & marginal cost:

Demand: P = 1,000 – 10Q

Total Cost: TC = 500 + 10Q + Q^2

Marginal Revenue: MR = 1,000 – 20Q

Marginal Cost: MC = 10 + 2Q

a. What level of output should be produced to maximize profits?

b. What is the market price?

c. How much profit will be earned?

d. The firm sells cereal and competes with other firms selling slightly differentiated cereal products. What type of market is this firm operating in?

The following equations describe a firm’s total cost and marginal cost:

Total Cost: TC = 500 + 10Q + Q^2

Marginal Cost: MC = 10 + 2Q

e. If the firm is a price taker and other firms in the industry sell output at a price of $100, what price should the manager of this firm put on the product?

f. What level of output should be produced to maximize profits?

g. How much profit will be earned?

h. The firm sells orange juice, which is a perfect substitute, at a farmers market. What type of market is this firm operating in?

The above data is the cost and price of the event of Annual Dinner . As a cost controller, using the data above briefly explain and analyze how the company can maximize the profit and minimize the cost using the below method?

a. Job Costing

b. Hybrid Costing

c. Process costing

d. Historical costing

e. Operating Costing

1. Toby is considering two hotel projects. Project A will be in Jamaica with an initial investment of $865,000 and Project B will be in Canada with an initial investment of $750,000.

The cost of capital for Project A is 13% and the cost of capital for project B is 15%.
Calculate the following;

1. Calculate the discounted payback period of Project A.                                    
   
2. Calculate the discounted payback period of Project B.                                       
   
3. Calculate the net present value for Project A.                                                   
   
   
4. Calculate the net present value for Project B.   

Managemet can only accept one project. Which project should management accept? Explain your answer.                        

John Hanning owns a small hotel. The following balances were taken from his books on 31 December 2016

Takings (Sales)
Premises, at Cost
Fixtures and Fittings at cost

Minibus
Provision for depreciation, 1 January 2016: Fixtures and fittings

Minibus
Stock of wine, 1 January 2016 Debtors
Creditors
Bank overdraft
Cash in hand
Wages
Cleaning
Purchase of food and wine Running expenses of minibus Bank interest (Dr Balance) Advertising
General expenses
Capital

Drawings

$

283,670.00 396,000.00 100,000.00

10,000.00

45,600.00 3,600.00 1,200.00 6,500.00 3,970.00

16,450.00 700.00 61,020.00 27,830.00 121,700.00 4,800.00 1,520.00 5,880.00 13,140.00 427,000.00 30,000.00

Page 2 of 6

Additional information:

1. Depreciation policies:

   The fixtures and fittings should be depreciated at 15% on cost. The minibus should be depreciated at 20% of the written down value.

2. $3,000 of the total for the purchase of food and wine was in respect of food used by Larsen and his family.

3. Stock of wine at 31 December 2016 was $1,340.

4. Bank interest of $280 had accrued at 31 December 2016.

5. Advertising, costing $900, had been paid in December 2016. This was for advertising leaflets to be published in 2017.

6. Bad debts, $1,190, were to be written off.

REQUIRED

1. (a) Prepare the Income Statement for the year ended 31 December 2016.

   [20 Marks]

2. (b) Prepare the Statement of Financial Position as at 31 December 2016.

   [20 Marks]

•South Park Energy is considering replacing the company's Methane Plant with a Nuclear Plant.

•The Methane Plant was built two years ago at a cost of $120M with an expected useful life of 5 years. This plant is being depreciated to zero using 5-year straight-line depreciation. The Methane Plant can be sold today for $70M. If this plant had been kept, it would have had no salvage value at the end of its expected useful life three years from today.

•The Nuclear Plant would cost $500M to build today. Since the Nuclear plant will just be a working prototype, its expected useful life is only 3 years and it falls in the 3-year MACRS depreciation class (yr 1: 33%, yr 2: 45%, yr 3: 15%, yr 4: 7%). The Nuclear Plant is expected to have a salvage value of $40M at the end of the plant's 3-year life. The Nuclear Plant is expected to reduce operating expenses by $150M each year during the plant's 3-year expected life and increase revenues by $40 million each year. The company's marginal tax rate is 40%, and this project has a weighted average cost of capital of 13%.

(Q1) What is the total cash flows during year 3 for this replacement analysis?

(Q2) What is the initial cash flow for this replacement analysis?

You are given the sample mean and the population standard deviation. Use this information to construct the​ 90% and​ 95% confidence intervals for the population mean. Interpret the results and compare the widths of the confidence intervals. If​ convenient, use technology to construct the confidence intervals. A random sample of 60 home theater systems has a mean price of ​$120.00. Assume the population standard deviation is ​$15.40. Construct a​ 90% confidence interval for the population mean.

"Mike Dreskin manages a large Los Angeles movie theater complex called Cinema I, II, III, and IV. Each of the four auditoriums plays a different film; the schedule is set so that starting times are staggered to avoid the large crowds that would occur if all four movies started at the same time. The theater has a single ticket booth and a cashier who can maintain an average service rate of 280 movie patrons per hour. Service times are assumed to follow an exponential distribution. Arrivals on a typically active day are Poisson distributed and average 210 per hour. To determine the efficiency of the current ticket operation, Mike wishes to examine several queue operating characteristics.

(a) Find the average number of moviegoers waiting in line to purchase a ticket.

(b) What percentage of the time is the cashier busy?

(c) What is the average time that a customer spends in the system?

(d) What is the average time spent waiting in line to get to the ticket window? (e) What is the probability that there are more than two people in the system? More than three people? More than four?"

Please use an Excel Model. (MD1?)