The accountants hired by the Brookside Racquet Club have determined total fixed cost to be $75,000, total variable cost to be $130,000, and total revenue to be $145,000. Because of this information, in the short run, the Brookside Racquet Club should

11- Assume the total cost of a college education will be $303,000 when your child enters college in 18 years. You presently have $54,000 to invest. What annual rate of interest must you earn on your investment to cover the cost of your child's college education? (Enter answer on percent with two decimals, i.e. 32.16)

12- You have $24,000 you want to invest for the next 40 years. You are offered an investment plan that will pay you 7 percent per year for the next 20 years and 9 percent per year for the last 20 years. How much will you have at the end of the 40 years?

(Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

# Years:

13-

Year

Cash Flow

1

1083

2

816

3

1267

4

616

Eulis Co. has identified an investment project with the cash flows shown in the table above. If the discount rate is 11 percent, what is the present value of these cash flows? (Do not round intermediate calculations and round your answer to two decimals, i.e. 32.16)

14-

Year

Cash Flow

1

1730

2

1017

3

784

4

1488

Vegetable Corp.. has identified an investment project with the cash flows shown in the table above. If the discount rate is 12 percent, what is the future value of these cash flows in year 4? (Do not round intermediate calculations and round your answer to two decimals, i.e. 32.16)

Kaelker Corporation reports that at an activity level of 9,000 units, its total variable cost is $645,300 and its total fixed cost is $93,650. What would be the total cost, both fixed and variable, at an activity level of 9,200 units? Assume that this level of activity is within the relevant range.

$747,161

$753,290

$738,950

$756,240

Sultan Company uses an activity-based costing system.

At the beginning of the year, the company made the following estimates of cost and activity for its five activity cost pools:

The expected activity for the year was distributed among the company’s four products as follows:

Using the ABC data, determine the total amount of overhead cost assigned to each product.

For the year just ended, Royal Corporation reported total manufacturing costs of 3,600,000 and cost of goods sold of 3,750,000. For the past periods, the factory overhead had been about 1/2 of materials cost and 2/5 of the conversion costs. Raw materials on January 1 of 240,000 was 6/5 of the December 31 inventory, while work in process of 160,000 on January 1 increased by 1/4 at the year-end. The finished goods inventory decreased by 1/3.

Required: Prepare statement of cost of goods sold for the year just ended, giving as much details as can be determined from the information given.

The market demand curve is P = 90 − 2Q, and each firm’s total cost function is C = 100 + 2q2.

1. Suppose there is only one firm in the market. Find the market price, quantity, and the firm’s profit.

2.Show the equilibrium on a diagram, depicting the demand function D (with the vertical and horizontal intercepts), the marginal revenue function MR, and the marginal cost function MC. On the same diagram, mark the optimal price P, the quantity Q, and the average total cost ATC. Illustrate the firm’s profit. Hint: You don’t need to draw the AT C curve.

3.Using the demand function, find the elasticity of demand at the monopoly price and quantity.

4.Verify that the monopoly price and quantity satisfy the monopo- list’s rule of thumb for pricing.

5.What is the monopolist’s factor markup of price over marginal cost?

6.How does the monopolist’s factor markup of price over marginal cost compare to that of a perfectly competitive firm?

A firm faces the following costs: total cost of capital = $2,000; price paid for labor = $12 per labor unit; and price paid for raw materials = $4 per raw-material unit.

Instructions: In parts a and b, round your answers to 2 decimal places. In part c, enter your answer as a whole number.

a. Suppose the firm can produce 6,000 units of output this year by combining its fixed capital with 100 units of labor and 450 units of raw materials. What are the total cost and average total cost of producing the 6,000 units of output?

b. Now assume the firm improves its production process so that it can produce 7,000 units of output this year by combining its fixed capital with 100 units of labor and 450 units of raw materials. What are the total cost and average total cost of producing the 7,000 units of output?

c. If units of output can always be sold for $1 each, then by how much does the firm’s profit increase after it improves its production process?

d. Suppose that implementing the improved production process would require a one-time-only cost of $1,100. If the firm only considers this year’s profit, would the firm implement the improved production process?

      (Click to select)  Yes  No

   What if the firm considers its profit not just this year but in future years as well?

      (Click to select)  No  Yes

In a competitive market, a leather good company has the following total cost function of making leather bags: C(q) = 75+q2. What is function of the firm’s supply curve? Group of answer choices S(p)=2p S(p)=5p S(p)=25p S(p)=p S(p)=0.5p

2. Consider the following hourly demand and cost schedule for a monopoly firm; (Tπ, is Total Profit).

  Q    P             TR          MR          TC          TVC         MC           ATC          AVC         Tπ

  0     19                                          $4.00

  1      18                                                                            4

  2      17                                                                            2

  3      16                                                                            1

  4      15                                                                           2

  5      14                                                                           3

  6      13                                                                            4

  7      12                                                                           5

  8       11                                                                           6

  9        10                                                                          7                                                                                                                      ___________________________