Thinnews Co., uses machine hours to allocate manufacturing overhead cost to outputs:

1.What is fixed overhead spending variance?

Group of answer choices

$3,000 favorable

$3,000 unfavorable

$1,000 favorable

$1,000 unfavorable

2.

What is production volume variance?

Group of answer choices

$1,500 unfavorable

$1,000 unfavorable

$1,400 unfavorable

$2,400 favorable

(Deriving SR Cost Curves) In this problem, we’ll work through deriving short-run total cost and marginal cost functions from a production function. Such cost functions show how costs vary when quantity changes (you’re typical cost curves from intro to micro!). A firm has a production function ?? = 0.25????^0.5, the rental rate of capital is $100, and the wage rate is $25. In the short-run, capital is fixed at 100 units.

a. What is the firm’s short-run production function, q(L)? In one sentence, explain what this tells you.

b. What is the short-run demand for labor as a function of quantity, q(L) ? In one sentence, explain what this tells you.

c. Write the firm’s cost as a function of labor, ??(L) ? In one sentence, explain what this tells you.

d. Use what you found in (b) and (c) to derive the firm’s short-run cost function, ??(q) . In one sentence, explain what this tells you.

e. What is the firm’s short-run marginal cost function, ????(q) . In one sentence, explain what this tells you.

f. If the firm produces 125 units, what will be its total cost and marginal cost?

     
Additional data for each of the product lines follow:     

    
Required

Determine the total cost and cost per unit for each product line, assuming that an ABC system is used to allocate overhead costs. Determine the combined cost of all three product lines.

Total Manufacturing Cost, Income Statement, Unit Cost, and Selling Price Two inventors, recently

organized as Innovation, Inc., consult you regarding a planned new product. They have estimates of the

costs of materials, labor, overhead, and other expenses for 2016 but need to know how much to charge for

each unit to earn a profit in 2016 equal to 15% of their estimated total long-term investment of $400,000

(ignore income taxes). Their plans indicate that each unit of the new product requires the following:

Direct material

4 lb. of a material costing $5/lb.

Direct labor

2 hrs. of a metal former’s time at $11/hr.

0.6 hr. of an assembler’s time at $8/hr.

Major items of production overhead would be annual rent of $46,460 for a factory building, $28,660

rent for machinery, and $21,700 of indirect material. Other production overhead is estimated to be

$233,280. Selling expenses are an estimated 30% of total sales, and non-factory administrative expenses

are 20% of total sales.

The consensus at Innovation is that during 2016 10,000 units of product should be produced for

selling and another 2,000 units should be produced for the next year’s beginning inventory. Also, an

extra 3,000 pounds of material will be purchased as beginning inventory for the next year. Because

of the nature of the manufacturing process, all units started must be completed, so work in process

inventories are negligible.

Required

a. Incorporate the above data into a schedule of estimated total manufacturing costs and compute

the unit production cost for 2016.

b. Prepare an estimated income statement that would provide the target amount of profit for 2016.

c. What unit sales price should Innovation charge for the new product?

Use the following data of Makrel ​Sales, Inc.:

MakrelMakrel

​Sales' LIFO cost of ending inventory would be

A.$186.

B.$129.

C.$154.

D.$450.

Gluth Company makes three paint products in a single facility. These products are produced and sold in 5 gallon units. Each has the following unit product costs: Products A B C Direct materials ......................................... $22.50 $22.40 $29.20 Direct labor ................................................ 13.60 11.40 12.50 Variable manufacturing overhead ............. 3.00 3.40 4.50 Total variable unit product cost ................. $39.10 $37.20 $46.20 Additional data concerning these products are listed below. Products A B C Mixing minutes per unit.............................. 3.30 1.70 1.80 Selling price per unit ................................... $84.70 $76.10 $87.50 Variable selling cost per unit ...................... $1.80 $2.40 $2.90 Monthly demand in units ............................ 4,000 2,000 4,000 Mixing machine time is limited in the production facility. A total of 21,000 minutes are available per month on these machines. Direct labor is a variable cost in this company. Fixed manufacturing overhead is $155,000 and fixed selling & administrative expenses are $62,000 per month. Question: A local company has additional mixing machine time available and is willing to rent time on one of its machines so that Gluth can satisfy customer demand for all products. The rental charge will cover all product related costs except direct materials; which must be provided by Gluth. Assuming Gluth has used its mixing machines in the most optimal fashion, what is the maximum amount they should be willing to pay the outside company for one additional hour of mixing machine time so as to not sell product at a loss? Round to the near

"Vehicles are prohibited on the paths in the park" is used as an example of a law that might require clarification.

Decide whether the law should be interpreted to forbid motorcycles, bicycles, children's pedal cars, and battery-powered remote-control cars. On what grounds are you deciding each of these cases?

avage Rapide is a Canadian company that owns and operates a large automatic carwash facility near Montreal. The following table provides data concerning the company’s costs:

For example, electricity costs are $1,300 per month plus $0.09 per car washed. The company expected to wash 8,400 cars in August and to collect an average of $6.10 per car washed.

The actual operating results for August appear below.

Required:

Compute the company's revenue and spending variances for August. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)