P = 100 – 0.01Q
Where Q is weekly production and P is price, measured in cents per unit. The firm’s cost function is given by C = 50Q + 30,000. Assume that the firm maximizes profits.
In: Economics
Question 1
Revenues
Revenue from sales of goods and services .......................... $100,000,000
Operating costs and expenses:
Cost of products and services sold ....................................... $30,000,000
Selling expenses ................................................................... $3,000,000
Administrative expense ........................................................ $4,000,000
Total operating costs and expenses ............................... $37,000,000
Income from operations.............................................................. $63,000,000
Interest expense (corporate bonds & loans) ............................... $500,000
Non-recurring expense (Legal expenses/fines in
settling a federal antitrust suit .............................................. $100,000
Income taxes ............................................................................... $740,000
Net income
.................................................................................
$61,660,000
During this year of operation, Bonus Realty owned and occupied an
office building in downtown Cleveland. For this year, the building
could have been leased to other businesses for $3,000,000 in lease
income. Bonus Realty also owned undeveloped land valued at
$10,000,000. Owners of Bonus Realty can earn a 4% rate of return
annually on funds invested elsewhere.
a. Total explicit costs of using market-supplied resources for
Bonus Realty for this year are….
b. Total implicit costs of using owner-supplied resources for Bonus
Realty for this year are….
c. Total economic cost is….
d. Bonus Realty’s accounting profit is….
e. Economic profit for Bonus Realty is….
Please solve the questions with
calculations.
In: Economics
Marshmallow fluff is a local monopoly firm. We have its marginal cost and marginal revenue as follows: MC=80+2Q and MR=200-Q. (
a) Calculate consumer surplus (CS) and deadweight loss (DWL)
b) Graphically illustrate your answers.
In: Economics
Define
What is the difference between Inelastic and Elastic?
What determines whether the demand curve is Inelastic or Elastic?
In: Economics
When does the new revenue recognition standard go into effect for private companies and what steps can these private companies take to make sure they are able to make an effective transition to the new standard?
In: Accounting
EX 12-3 Minor differences in the terms of a contribution may justify major differences in revenue recognition.
Upon meeting with the executive director of the Crime Victims Advocacy Group, the president of a private foundation agreed to contribute in the following year $100,000 in support of the group’s proposed program to provide legal assistance to victims of violent crimes.
Suppose that the foundation’s formal letter describing its pledge was worded in three different ways:
1. “We are pleased to pledge $100,000 in support of your group’s efforts to assist victims of violent crimes.”
2. “We are pleased to pledge $100,000 in support of your group’s efforts to develop a new program to provide legal assistance to victims of violent crimes.”
3. “We are pleased to pledge $100,000 upon your developing a new program to provide legal assistance to victims of violent crimes.” For each of the three options:
a. Prepare the journal entries that should be made on receipt of the letter from the foundation. Assume that it was unlikely that the pledge would be fulfilled in the same period as it was made.
b. Prepare the journal entries that should be made to record the expenditure of $100,000 on activities related to the legal assistance program.
c. Prepare the journal entries that should be made on receipt of the $100,000 check, assuming that it was received shortly after the legal assistance program was established and the group spent the $100,000 on program related activities.
d. Comment on why minor differences in wording might justify major differences in accounting. Be sure to indicate the type of fund in which your entries would be made.
In: Accounting
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Practicality Partnership provides budgeting and financial investment counseling. The firm earned $500,000 in revenue and incurred $100,000 in variable costs last month. If the firm has $250,000 in fixed costs each month, Last month, what was the firm's margin of safety (in revenue dollars) and degree of operating leverage? |
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In: Accounting
Good Morning Sunshine is a wholesaler of coffee makers. In 2012, actual June sales revenue totaled $200,000. July's sales are expected to increase 10% over June's sales. August's sales are expected to increase 15% over July's sales. Prices are set to achieve a 60% gross profit. The company wants to maintain an ending merchandise inventory equal to 15% of the next month’s cost of goods sold. This requirement was met on July 1st.
The company’s budgeted purchases for the month of July are $ _____. (round to the nearest dollar)
In: Accounting
41. Apartment building manager reports revenue of $1,350 per month. He was 100% occupied for the year. He pays $70 per month for water & trash for the complex. His insurance was $1,050 for the year. His payment on the building were $8,400 for the year. $4,815 of it was interest. He was $50 in advertising expense for the year. Maintenance totaled for year totaled $925. He will be depreciating the property $2,320 for the year. He is also depreciating a Heat & Air unit at $815 for the year, which he bought and installed this year for the cost of $5,000. He has $5,300 in his business bank account and is holding deposits of $1,300 in escrow. The land is valued at $20,000. The building is valued at 116,000 with the land. Total depreciation on the building has been $25,000. He owns the local printer $65; the plumber, $420 and the local paper $50. He owes $73,500 on the property. Property taxes for the year are $1,725. The owner paid income tax of $12,500 this year.
The bottom line Annual Profit or Loss is
(A) Profit of $1,350.00 (B) Loss of $1,350.00 (C)Profit of $3,660.00 (D) None of the above
In: Accounting
The Dirk Company fails to record these journal entries:
| Accrued revenue | $65 |
| Payment of previously declared dividend | $35 |
| Expiration of prepaid rent | $28 |
Determine the net effect of these errors on the following items. Indicate the dollar amount of the error and the direction of the error. (Example: $17 overstated, or $12 understated, or No Error.)
Please show work or any equations used to get the answer.
In: Accounting