A monopolist has the following total cost function:

C = 50 + 10Q + 0.5Q²

They face the market demand:

P = 210 – 2Q

a. What is the profit-maximizing price and quantity set by this monopoly? What is this monopolist’s profit?  

b. Calculate the producer surplus, consumer surplus, and deadweight loss.  

c. If the price elasticity of demand (ԑ) faced by this monopolist at the equilibrium is –1.625, what is the Lerner Index?  

d. If the price elasticity of demand (ԑ) faced by this monopolist at the equilibrium is – 4, what is the Lerner Index?  

e. Is the price markup charged by the monopolist higher in the part c scenario or in the part d scenario? Why?  

The manufacturing cost of Mocha Industries for three months of the year are provided below: Total Cost Production April $95,966 1,460 Units May 97,184 2,040 Units June 99,116 2,960 Units (a) Using the high-low method, determine the variable cost per unit. Round your answers to two decimal places. $ per unit (b) Using the high-low method, determine total fixed costs. $

Wells Printing is considering the purchase of a new printing press. The total installed cost of the press is $2.2 million. This outlay would be partially offset by the sale of an existing press. The old press has zero book value, cost $1 million 10 years ago, and can be sold currently for $1.2 million before taxes. As a result of acquisition of the new press, sales in each of the next 5 years are expected to be $1.6 million higher than with the existing press, but product costs (excluding depreciation) will represent 50% of sales. The new press will not affect the firm’s net working capital requirements. The new press will be depreciated under MACRS, using a 5-year recovery period. The firm is subject to a 40% tax rate. Wells Printing’s cost of capital is 11%. (Note: Assume that the old and the new presses will each have a terminal value of $0 at the end of year 6.) [15 marks]
i. Determine the initial investment required by the new press. [2 marks]
ii. Determine the operating cash flows attributable to the new press. (Note: Be sure to consider the depreciation in year 6.) [6 marks]
iii. Determine the payback period. [2 marks]
iv. Determine the net present value (NPV) and the internal rate of return (IRR) related to the proposed new press. [4 marks]
v. Make a recommendation to accept or reject the new press, and justify your answer. [1 marks]

The following is total monthly budgeted cost and activity information for the four activity centers in the billing department of Oregon Power Company:

In September, actual total costs and activity were as follows:

Required
Compute the flexible-budget variances for the following two activity cost items (round unit costs to two decimal places and enter favorable variances as positive numbers and unfavorable variances as negative numbers):

  Correspondence   

  Statement inquiry   

In this make or buy problem, you should compute the total cost of making a particular part and the total costs of buying the same part. Try following the solutions steps:

Determine the parameters of the make cost function - the variable costs per unit and the fixed costs.

Determine the fixed costs that are avoidable and the fixed costs that are unavoidable.

Determine the buy price.

Determine the alternative use of the idle resources under the buy,

Note that the question does not ask for the total make costs and the total buy costs but instead asks for the difference between the two. Make sure that you submit the answer as a positive or a negative number as instructed.
______________________________________________________

BKF.com provides banks access to sophisticated financial information and analysis via the web, enabling them to instantly evaluate both personal and commercial loan applications. To better focus on its client services, BKF.com is considering outsourcing some of its internal functions. Its controller, Jenny Lee, suggests starting with the company's internal email system. She recently attended a conference and learned that GTE and NBC outsource their email function to companies such as Google and Yahoo. Lee began her analysis by identifying the total costs related to last month's in-house email operation, when there were 3,650 employee mailboxes:

Lee analyzed the computer hardware costs further and determined that:

47% were allocated costs that will continue even if the email system is abandoned.

19% were non-personnel direct costs that will be avoided if the email system is abandoned.

34% were monthly salaries for two, equally paid interns who worked only on the email system.

Mail.com, a leading provider of internet messaging outsourcing services, has offered to host BKF.com's email function for $13.20 per mailbox. BKF.com will still need to pay for the virus protection software, and it will need one of the interns to maintain the virus protection and quarantine suspicious emails. Also, a company has agreed to pay BKF.com $4,100 a month to use the computer storage space that will become available if BKF.com outsources its email function.

Finally, Lee estimates that 3,980 mailboxes will be required per month next year.

REQUIRED

By how much will BKF.com's monthly profits change if they decide to outsource its email function to Mail.com instead of managing the service internally?   (Note: if the buy costs are less than the make costs, enter the difference as a positive number; if the make costs are less than the buy costs, enter the difference as a negative number.)

You may need to use the appropriate technology to answer this question.

Consider the following sample of production volumes and total cost data for a manufacturing operation.

This data was used to develop an estimated regression equation,

ŷ = 1,342.67 + 7.52x,

relating production volume and cost for a particular manufacturing operation. Use

α = 0.05

to test whether the production volume is significantly related to the total cost. (Use the F test.)

State the null and alternative hypotheses.

H₀: β₁ ≠ 0
H_a: β₁ = 0H₀: β₁ ≥ 0
H_a: β₁ < 0    H₀: β₀ ≠ 0
H_a: β₀ = 0H₀: β₀ = 0
H_a: β₀ ≠ 0H₀: β₁ = 0
H_a: β₁ ≠ 0

Set up the ANOVA table. (Round your p-value to three decimal places and all other values to two decimal places.)

Find the value of the test statistic. (Round your answer to two decimal places.)

Find the p-value. (Round your answer to three decimal places.)

p-value =

What is your conclusion?

Do not reject H₀. We cannot conclude that the relationship between production volume and total cost is significant.

Reject H₀. We cannot conclude that the relationship between production volume and total cost is significant.     

Reject H₀. We conclude that the relationship between production volume and total cost is significant.

Do not reject H₀. We conclude that the relationship between production volume and total cost is significant.

Explain what is meant by the total cost approach to logistics. Illustrate your answer with a diagram

Explain what is meant by the total cost approach to logistics. Illustrate your answer with a diagram

Irwin, Inc., constructed a machine at a total cost of $58 million. Construction was completed at the end of 2014 and the machine was placed in service at the beginning of 2015. The machine was being depreciated over a 10-year life using the sum-of-the-years’-digits method. The residual value is expected to be $3 million. At the beginning of 2018, Irwin decided to change to the straight-line method. Ignoring income taxes, prepare the journal entry relating to the machine for 2018. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5).)

Journal entry worksheet

Record the entry relating to the machine for 2018.

Note: Enter debits before credits.

In a slow year, Deutsche Burgers will produce 3.200 million hamburgers at a total cost of $4.600 million. In a good year, it can produce 6.200 million hamburgers at a total cost of $6.400 million. a. What are the fixed costs of hamburger production? (Do not round intermediate calculations. Enter your answer in millions rounded to 1 decimal place.) b. What is the variable cost per hamburger? (Do not round intermediate calculations. Round your answer to 2 decimal places.) c. What is the average cost per burger when the firm produces 3 million hamburgers? (Do not round intermediate calculations. Round your answer to 2 decimal places.) d. What is the average cost per burger when the firm produces 4 million hamburgers? (Do not round intermediate calculations. Round your answer to 2 decimal places.) e. Why is the average cost lower when more burgers are produced? The fixed costs are spread across more burgers. Variable costs are lower per burger. Fixed costs are constant per burger. rev: 09_25_2017_QC_CS-101934 Next Visit question mapQuestion 1 of 6 Total 1