A local Birmingham-area restaurant chain introduced a new summer menu in its Vestavia Hills location, but not its Mountain Brook location. Nightly revenue averaged $6,000 in Vestavia Hills and $4,000 in Mountain Brook before the menu change, but $7,000 in Vestavia Hills and $3,000 in Mountain Brook after the menu change. The difference-in-difference estimate of the increase in average nightly revenue attributable to the menu change is

a.$4,000

b. $0

c.$1,000

d.$2,000.

Suppose that you have the following numbers for a firm in a monopolistically competitive industry.

Total Revenue=1200

Marginal Revenue=10

Total Cost=700

Total Variable Cost=500

Price=12

MC=6

Explain how you know that:

a. this firm is not maximizing profit.

b. this firm is operating in the short-run.

c. there is excess capacity or “waste” associated with this firm (Hint: Given the information above, what is ATC? Is the firm operating at the minimum of the ATC curve?)

13) For the given cost function C(x) = 48,400 + 600x + x²,

First, find the average cost function. Use it to find:

a) The production level that will minimize the average cost
x =     

b) The minimal average cost
$ =

14) Suppose a product's revenue function is given by R(q)=−4q²+400q, where R(q) is in dollars and q is units sold. Find a numeric value for the marginal revenue at 31 units.

MR(31) = ? $ per unit

1. The demand curve for cameras is Q=400-2P where P is the price of a camera and Q is the number of cameras sold per week. Answer the following questions.
   1. If the vendor has been selling 120 cameras per week, how much revenue has she been collecting?
   2. What is the price elasticity of demand for cameras?
   3. Does the law of demand hold?
   4. If the vendor wants to generate more revenue, should she raise or lower the price of cameras?

A list of accounts and their balances of O’Neill’s Psychological Services, at its year end July 31, 2021, is presented below:

Prepare balance sheet.

Sellall Department Stores reported the following amounts in its adjusted trial balance prepared as of its December 31 year-end: Administrative Expenses, $1,600; Cost of Goods Sold, $18,360; Income Tax Expense, $2,680; Interest Expense, $1,400; Interest Revenue, $160; General Expenses, $1,800; Net Sales Revenue, $30,770; and Delivery (freight-out) Expense, $220.

Prepare a multistep income statement for distribution to external financial statement users.

Suppose you are an auditor who is using audit sampling to perform substantive tests of client revenue for the year-ended 20X1. You have obtained the 20X1 sales journal and the population of all approved shipping documents used by the client during 20X1. Clearly explain how you could perform a test for each of the following management assertions about revenue transactions: A.) Completeness and B.) Occurrence. Be specific as to how you would perform the two tests.

What is the NPV of the project? Project life: 3 years Equipment: Cost: $18,000 Economic life: 3 years Salvage value: $4,000 Initial investment in net working capital: $2,000 Revenue: $13,000 in year 1, with a nominal growth rate of 5% per year Fixed cost: $3,000 in year 1 Variable cost: 30% of revenue Corporate tax rate (T): 40% WACC for the project: 10% This project does not create incidental effect.

For the year ending December 31, Beard Clinical Supplies Co. mistakenly omitted adjusting entries for (1) $7,090 of unearned revenue that was earned, (2) earned revenue that was not billed of $8,970, and (3) accrued wages of $7,220. Indicate the combined effect of the errors on (a) revenues, (b) expenses, and (c) net income. Choose understated or overstated and fill in the blank.

a. Revenues were (understated/overstated) by $______

b. Expenses were (understated/overstated) by $______

c. Net income was (understated/overstated) by $______