If demand for the price searching-firm (e.g. monopoly) is q=20-p
and total cost is 2+4q^2.
A)Compute the marginal revenue function. To check it what is
marginal revenue from selling 4 units of output?
B)What is the profit for this price searching firm?
In: Economics
An industry consists of two firms. Firm 1 has a total cost
function given by
??1(?1)=?1+?12 ,
while firm 2 has a total cost function given by
??2(?2)=3?2+12?22
for ?>0.
(a) Let ? denote the (exogenous) price at which each firm can sell
its output. Write down each firm’s profit-maximization problem and
the associated first-order conditions (FOCs).
(b) Derive the firms’ supply functions ?1∗(?) and
?2∗(?) and verify that these functions are linearly
increasing in ?.
(c) Derive the industry supply curve ?(?). [Hint: Draw a picture
and remember the notion of horizontal summation.
(d) Again assuming that the firms act as price takers, find the industry equilibrium when the industry demand curve is given by ??(?)=9/2−1/2? .
In: Economics
Calculate the total effective hourly cost for a contractor who purchased a 115,000-lb, 385-hp gasoline-engine Power Shovel for $412,500. The machine has a set of tires that costs $12,000 and lasts for 5,000 hours. Salvage value is expected to be $44,000 at the end of its 7 years useful life. Major maintenance and repairs would accumulate annually at 70% of annual equipment depreciation cost. Tire repairs are 30% of tire depreciation. Annual percentage rate for Interest is 9%, while Insurance and Taxes is 6%. Equipment usage will average 2,400 hours per year. The cost of fuel is $3.25/gal and oil costs $9.30/gallon. Fuel consumption rate is 0.06 gallons per HP-hour, while oil consumption rate is 0.006 LB/HP-hour. Operating factor is 0.85; crankcase capacity is 8 gallons; and the number of hours between oil changes is 96 hours. Operators wage is $45/hr.
In: Accounting
Suppose a competitive firm's total cost function is TC = 3Q3−30Q2+275Q+400
1. (1 pt) Find the Average Total Cost (ATC), Average Variable Cost (AVC), and Marginal Cost (MC) functions.
2. (2 pts) Determine the shut-down price? Show your work.
3. (1 pt) If the price of output is $150, how much will the firm produce? Explain your reasoning.
4. (1 pt) If the price of output is $275, how much will the firm produce? Explain your reasoning.
In: Economics
Q3. 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.
In: Economics
Number of units produced 1,000,000
Total fixed cost $250,000
Per unit variable cost $0.32
Interest on outstanding debt $400,000
Per unit selling price $3.80
Tax rate = 46%
To raise the additional $2,400,000, the firm is considering two alternatives: (6)
What level of EBIT would yield the same EPS for the above alternatives? What EPS corresponds to this level of EBIT?
In: Finance
Number of units produced 1,000,000
Total fixed cost $250,000
Per unit variable cost $0.32
Interest on outstanding debt $400,000
Per unit selling price $3.80
To raise the additional $2,400,000, the firm is considering two alternatives: (6)
What level of EBIT would yield the same EPS for the above alternatives? What EPS corresponds to this level of EBIT?
In: Finance
Trade-Offs Among Quality Cost Categories, Total Quality Control, Gainsharing
Javier Company has sales of $9,700,000 and quality costs of $1,610,000. The company is embarking on a major quality improvement program. During the next three years, Javier intends to attack failure costs by increasing its appraisal and prevention costs. The "right" prevention activities will be selected, and appraisal costs will be reduced according to the results achieved. For the coming year, management is considering six specific activities: quality training, process control, product inspection, supplier evaluation, prototype testing, and redesign of two major products. To encourage managers to focus on reducing non-value-added quality costs and select the right activities, a bonus pool is established relating to reduction of quality costs. The bonus pool is equal to 10 percent of the total reduction in quality costs.
Current quality costs and the costs of these six activities are given in the following table. Each activity is added sequentially so that its effect on the cost categories can be assessed. For example, after quality training is added, the control costs increase to $340,000, and the failure costs drop to $1,050,000. Even though the activities are presented sequentially, they are totally independent of each other. Thus, only beneficial activities need be selected.
| Control Costs | Failure Costs | |
| Current quality costs | $156,000 | $1,454,000 |
| Quality training | 340,000 | 1,050,000 |
| Process control | 535,000 | 709,000 |
| Product inspection | 583,000 | 676,000 |
| Supplier evaluation | 716,000 | 206,000 |
| Prototype testing | 970,000 | 137,000 |
| Engineering redesign | 991,000 | 55,000 |
1. Calculate the total quality costs associated with this selection. Assume that an activity is selected only if it increases the bonus pool.
2. Given the activities selected in Requirement 1, calculate the following:
a. The reduction in total quality costs.
b. The percentage distribution for control and failure costs. Round
your answers to the nearest whole percentage value (for example,
16% would be entered as "16").
| Control costs | % | |
| Failure costs | % |
c. The amount for this year's bonus pool.
$
In: Accounting
In December 2016,
Learer Company’s manager estimated next year’s total direct labor
cost assuming 45 persons working an average of 2,000 hours each at
an average wage rate of $25 per hour. The manager also estimated
the following manufacturing overhead costs for 2017.
| Indirect labor | $ | 325,200 | |
| Factory supervision | 233,000 | ||
| Rent on factory building | 146,000 | ||
| Factory utilities | 94,000 | ||
| Factory insurance expired | 74,000 | ||
| Depreciation—Factory equipment | 520,000 | ||
| Repairs expense—Factory equipment | 66,000 | ||
| Factory supplies used | 74,800 | ||
| Miscellaneous production costs | 42,000 | ||
| Total estimated overhead costs | $ | 1,575,000 | |
At the end of 2017, records show the company incurred $1,820,000 of
actual overhead costs. It completed and sold five jobs with the
following direct labor costs: Job 201, $610,000; Job 202, $569,000;
Job 203, $304,000; Job 204, $722,000; and Job 205, $320,000. In
addition, Job 206 is in process at the end of 2017 and had been
charged $23,000 for direct labor. No jobs were in process at the
end of 2016. The company’s predetermined overhead rate is based on
direct labor cost.
Required
1-a. Determine the predetermined overhead rate for
2017.
1-b. Determine the total overhead cost applied to
each of the six jobs during 2017.
1-c. Determine the over- or underapplied overhead
at year-end 2017.
2. Assuming that any over- or underapplied
overhead is not material, prepare the adjusting entry to allocate
any over- or underapplied overhead to Cost of Goods Sold at the end
of 2017.
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Complete this question by entering your answers in the tabs below.
Determine the over- or underapplied overhead at year-end 2017.
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Determine the total overhead cost applied to each of the six jobs during 2017.
|
Complete this question by entering your answers in the tabs below.
Assuming that any over- or underapplied overhead is not material, prepare the adjusting entry to allocate any over- or underapplied overhead to Cost of Goods Sold at the end of 2017.
Journal entry worksheet
Record the entry to allocate any overapplied or underapplied overhead to Cost of Goods Sold at the end of year 2017.
Note: Enter debits before credits.
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In: Accounting
|
In December 2010, Gomez Company’s manager estimated next year’s total direct labor cost assuming 50 persons working an average of 2,020 hours each at an average wage rate of $15 per hour. The manager also estimated the following manufacturing overhead costs for year 2011. |
| Indirect labor | $ | 167,650 | |
| Factory supervision | 123,000 | ||
| Rent on factory building | 76,000 | ||
| Factory utilities | 46,000 | ||
| Factory insurance expired | 35,100 | ||
| Depreciation—Factory equipment | 249,000 | ||
| Repairs expense—Factory equipment | 31,500 | ||
| Factory supplies used | 34,400 | ||
| Miscellaneous production costs | 10,000 | ||
| Total estimated overhead costs | $ | 772,650 | |
|
At the end of 2011, records show the company incurred $723,096 of actual overhead costs. It completed and sold five jobs with the following direct labor costs: Job 201, $348,000; Job 202, $324,000; Job 203, $167,000; Job 204, $416,000; and Job 205, $174,000. In addition, Job 206 is in process at the end of 2011 and had been charged $10,600 for direct labor. No jobs were in process at the end of 2010. The company’s predetermined overhead rate is based on direct labor cost. |
| Required | |
| 1a. |
Determine the predetermined overhead rate for year 2011. (Omit the "%" sign in your response.) |
| Predetermined overhead rate | % |
| 1b. |
Determine the total overhead cost applied to each of the six jobs during year 2011. (Omit the "$" sign in your response.) |
| Job No. | Applied Overhead |
| 201 | $ |
| 202 | |
| 203 | |
| 204 | |
| 205 | |
| 206 | |
| Total | $ |
| 1c. |
Determine the over- or underapplied overhead at year-end 2011. (Input all amounts as positive values.Omit the "$" sign in your response.) |
| (Click to select)Underapplied overheadOverapplied overhead | $ |
| 2. |
Assuming that any over- or underapplied overhead is not material, prepare the adjusting entry to allocate any over- or underapplied overhead to Cost of Goods Sold at the end of year 2011. (Omit the "$" sign in your response.) |
| Date | General Journal | Debit | Credit |
| Dec. 31 | (Click to select)Finished goods inventoryCashFactory overheadFactory payrollSalesCost of goods soldAccounts receivableGoods in process inventory | ||
| (Click to select)Goods in process inventoryCost of goods soldAccounts receivableCashFactory payrollFactory OverheadSalesFinished goods inventory | |||
In: Accounting