1.

Using the high-low method, the variable rate for maintenance is:

Multiple Choice

• $0.40.

• $0.75.

• $1.50.

• $2.00.

2. The current cost structure for the production department of Performance, Inc., has fixed expenses of $500,000 and variable expenses of $200 per unit. Unit sales volume is 6,000 units. Performance, Inc., can reduce variable expenses to $100 per unit with automated manufacturing technology. What is the new fixed expense amount after automation that will produce the same current operating income on sales volume of 6,000 units?

Multiple Choice

• $500,000.

• $1,100,000.

• $1,200,000.

• $1,700,000.

Ruby Company follows activity-based budgeting. From the information given below, calculate the total activity cost of the company. Activity description Activity driver Cost per unit of driver Amount of driver Processing mail Number of clients $120 $75 Paying bills Number of bills $ 2.5 $10,000 Investigating Number of new hires $110 $75 Writing reports Number of clients $150 $75 a. $52,500 b. $52,800 c. $53,500 d. $53,200

Assume a monopolist who sells a product with a total cost function C=-100Q+1.5Q^2. The market demand is given by the equation P=300-Q. (a) What is the unregulated monopoly quantity and price? (b) Is the monopolist making a profit or loss? How much is the profit or loss? (c) Suppose the monopolist is regulated to charge a rate which covers all unit cost and total cost, what is this rate and how many units will the monopolist produce? (d) If the regulatory agency desires for the monopolist to produce the socially optimal quantity and rate(price), what would they respectively be? (e) Which form of monopoly regulation most commonly used and why?

A monopolistic market structure is facing the following demand curve, Q=1800-25P. It's STC total cost is given by 100+7Q+0.025Q square. Find the following.

A. His profit maximizing quantity, price and TR.

B. If the firm wants to incur an average selling cost of Rs. 33 per unit., will the firm face below, above or just normal profits.. support ans with calculation

a company provides the following abc costing information: activities total costs activity cost drivers labor 384000 8000 hours gas 36000 6000 gallons invoices 180000 total costs 600000 the above activities used by their three departments are : department 1 department 2 department 3 labor 2500 hours 1400 hours 4100 hours gas 1800 gallons 1000 gallons 3200 gallons invoices 1300 invoices 300 invoices 5900 invoices how much of invoice cost will be assigned to department 2?

Assume that a competitive firm has the total cost function: TC=1q3−40q2+890q+1800 Suppose the price of the firm's output (sold in integer units) is $600 per unit. Using tables (but not calculus) to find a solution, what is the total profit at the optimal output level? Please specify your answer as an integer. STUDENT NOTE: I already know the answer, but can you help me with how to calculate the numbers under Total Cost. I know where 2651 comes from but I dont understand how to get the rest under this column.

High–Low Method; Predicting Cost
Prince Company’s total overhead costs at various levels of activity are presented below:
   labour    overhead
Month    Hours    Cost
September . . . . . . . . . . . . . . . . . . 100,000 $388,000
October . . . . . . . . . . . . . . . . . . . . . 80,000    $340,400
November . . . . . . . . . . . . . . . . . . . 135,000 $485,600
December . . . . . . . . . . . . . . . . . . . 140,000 $483,200
Assume that the overhead cost above consists of utilities, supervisory salaries, depreciation,
and maintenance. The breakdown of these costs at the 80,000-machine-hour level of activity in
October is as follows:
Utilities (variable) . . . . . . . . . . . . . . . . . . . . . . . . . . . $104,000
Supervisory salaries
and depreciation (fixed). . . . . . . . . . . . . . . . . . 120,000
Maintenance (mixed) . . . . . . . . . . . . . . . . . . . . . . . 116,400
Total overhead cost . . . . . . . . . . . . . . . . . . . . . . . . . $340,400
The company wants to break down the maintenance cost into its variable and fixed cost elements.
Required:
1. Estimate how much of the $483,200 of overhead cost in December was maintenance cost.
( Hint : To do this, first determine how much of the $483,200 consisted of utilities and supervisory
salaries. Think about the behaviour of variable and fixed costs within the relevant
range.)
2. Using the high–low method, estimate a cost formula for maintenance.
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 90,000
machine-hours?

Using a marginal cost (MC), average variable costs (AVC), and average total costs (ATC) curves, graph the break-even point and shutdown point for a firm. Explain why these two points are key in an entrepreneur’s decision making in the short-run or long-run.

A perfectly competitive firm has the following (short-run) total cost function: ??(?)=?²+200

and the market demand for the firm’s output is given by ??(?)=300−6?.

What is the equilibrium price and how much output will be produced by each firm in the long run?

Suppose that the market demand curve now becomes ??(?)=150−6?

. In the long run, with this reduced demand, what will be the equilibrium market price and quantity and how many firms will be serving the market and graph the long-run market adjustment process.?

(In the long run, there is free entry into this market by firms with the same cost structure. (Again, for simplicity, assume all firms’ cost curves are the same in short run and long run)

Q) Monopoly

Demand: P = 32 - Q

Marginal revenue: 32-2Q

Average total cost = ATC = 2/Q + Q

Marginal Cost: MC = 2Q

Draw a graph showing MC, MR, demand, and ATC. Illustrate this firm's revenue, cost, and profit in your graph. Then explain why the marginal revenue lies below the demand curve in a monopoly.