A Manufacturing Company Whose Total Factory Overhead Cost Fluctuate Considerably From Year ... Question: A manufacturing company whose total factory overhead cost fluctuate considerably from year to yea... A manufacturing company whose total factory overhead cost fluctuate considerably from year to year according to increases and decreases in the number of direct labor-hours worked in the factory. Total factory overhead costs at high and low levels of activity for recent years are Low: 52800, High: 70,400, Total factory overhead cost $279,380 Low, and $316,340 High. The factory overhead costs above consist of indirect materials, rent, and maintenance. The company has analyzed these costs at the 52,800-hour level of activity as: indirect materials (variable) $89,760, rent (fixed) 138,000, maintenance (mixed) 51,620, total factory overhead cost: $279,380. Estimate how much of the $316,340 factory overhead cost at the high level of activity consist of maintenance cost. First determine how much of $316,340 consist of indirect materials and rent. Maintenance cost at high level of activity is Using the high-low method estimate a cost formula for maintenance (round the variable cost per DLH to 2 decimal places) High level of activity, low level of activity, change, variable cost element fixed cost element Y=------+--------x What total factory overhead cost would you expect the company to incur at an operating level of 58,080 direct labor-hours?

Below is the total Standard Cost for Producing one dozen chocolate chip cookies:

Student 1:

Student 2

Step 1

Direct Material Cost for 1 dozen cookies:

Ingredients Total Standard Cost

1 egg 0.30

1/4 cup milk 0.25

3 cups flour 1.00

1 cup chocolate chips 0.75

Other Ingredients 1.25

Total Direct Material Cost 3.55

Direct Labour Cost (1 hour) 0.5

Total Standard Cost= 0.5 + 3.55= $4.05

A) Each group should compare the estimates of its members. Where estimates differ, determine why there were differences. Did assumptions differ? Did some members have more knowledge about the product than others? Form a group estimate of the standard cost of the product.

Nova Company’s total overhead cost at various levels of activity are presented below:

Assume that the total overhead cost above consists of utilities, supervisory salaries, and maintenance. The breakdown of these costs at the 40,000 machine-hour level of activity is:

Nova Company’s management wants to break down the maintenance cost into its variable and fixed cost elements.

Required:

1. Estimate how much of the $243,900 of overhead cost in July was maintenance cost. (Hint: to do this, it may be helpful to first determine how much of the $243,900 consisted of utilities and supervisory salaries. Think about the behavior of variable and fixed costs.)

2. Using the high-low method, estimate a cost formula for maintenance in the form Y = a + bX.

3. Express the company’s total overhead cost in the form Y = a + bX.

4. What total overhead cost would you expect to be incurred at an activity level of 45,000 machine-hours?

1. A representative firm in a perfectly competitive market has a total cost function:

ATC(q) = 72/q + 4 + 2q and MC(q) = 4 + 4q.

1. What is the firms fixed cost (FC) and variable cost (VC)?
2. Calculate the market price at which profits would be zero.
3. Calculate the profits or losses of the firms when price is $16.
4. The market demand is given by Qd = 2000 – 20p. In the long run, what will the market demand be? How many firms will there be?
5. Accurately draw the profit maximizing quantity, price, and any other related curves.

The total cost function of a perfectly competitive firm is TC= 12+2q^2+4q. What is the firm's optimal quantity at a market price of $12? If over time, the firm could exit and not pay its fixed cost, what would the optimal quantity be?

Production quantity: 4200 units
Total labor fee: $ 12600
Ingredients: $ 21,000
Fixed cost: $ 7000
Total: $ 42,700
Unit selling price: $ 15.

This business:
a) Calculate the marginal cost?
b) Calculate your marginal income?
c) According to the marginal cost method, the price is $ but if it does not, calculate the total income?
This business wants to open up to X market abroad. Information about the X market is as follows.

Production quantity for X market: 800 units
Unit sales price for market X: $ 10
25 cent shipping cost per unit for market X
For the X market, the additional fixed cost that should be covered is $ 0.
In line with this information;
d) Calculate the marginal cost for market X?
e) Calculate marginal revenue for market X?
f) Calculate the total income in the case of no pricing for the market X according to the marginal cost method?
g) Should this business be opened to this X market abroad, based on your findings? Why is that?

Green Acres Farms just purchased a tractor on January 1, 2020.

The total purchase price (cost) was $600,000.

They expect to use the tractor for 5 years and sell for $100,000.

Assume according to MACRS, they can depreciate tractors for 3 years using 150% declining balance.

Complete the following depreciation questions.

PART A

Fill in the economic depreciation table using the straight-line method.

Universal widget produces high-quality widgets. Its total cost function is given by ?? = 0.25? 2 . Widgets are demanded in Australia (where the demand curve is given by qA = 100 – 2PA) and in Lapland (where the demand is given by qL = 100 – 4PL). Total demand is equal to the combined demand from both locations. Suppose Universal widget can control the quantities supplied to each market.

(a) How many should it sell in each location to maximize its profit?

(b) What price will be charge in each location?

1. Suppose a firm has the total cost function T C = 3/8Q^2 + 400 (a) Is this firm in the short run or long run?

(b) Suppose this firm is facing a perfectly competitive market where the price is P = 24. What is the firm’s marginal revenue?

(c) Write the firm’s profit function and solve for the profit-maximizing quantity of production Q∗ . (3 points) (d) How much profit does the firm make at the profit-maximizing level of output? (1 point) (e) Write an equation for the firm’s short run average variable costs (AV C). (1 point) (f) Write the condition for whether a firm should continue to operate or shut down. Should this firm shut down? If not, when should it shut down? (2 points)

2. Suppose a firm faces an inverse demand curve P = 6 − 1/2Q and has a total cost function T C = 1/4Q^2 − Q. (a) Is this firm a price-taker or does it have market power? Explain. (2 points) (b) Write an equation for the firm’s profit function. (1 point) (c) Solve for the firm’s profit-maximizing level of output, Q∗ . (2 points) (d) What price does the firm sell its product at? (1 point)