4) For a perfectly competitive firm, which of the following is not true at profit maximiza- tion? a. Total revenue minus total cost is maximized. b. Marginal revenue equals marginal cost. c. Price equals marginal cost. d. Market price is greater than marginal cost.

For those of you with current or previous work experience, how is (was) productivity measured in your organization. Discuss the concepts of total production, average production and marginal production. Relate production to cost and discuss how the ideas of total cost, average cost and marginal cost are used in decision making.

Below are nineteen concepts, 1-19, and nineteen definitions, A-S. Match each definition to its concept by writing the correct letter the following way: 1A, 2B etc.

____    1.         Long run

____    2.         Short run

____    3.         Sunk cost

____    4.         Fixed cost

____    5.         Explicit cost

____    6.         Implicit cost

____    7.         Accounting profit

____    8.         Economic profit

____    9.         Total revenue

____    10.       Total costs

____    11.       Variable costs

____    12.       Marginal revenue, MR

____    13.       Marginal cost, MC

____    14.       Average cost

____    15.       Zero (normal) profits

____    16.       Increasing cost industry

____    17.       Constant cost industry

____    18.       Decreasing cost industry

____    19.       Elimination principle

____    20.       Risk

____    21.       Uncertainty

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A         An industry in which industry costs do not change with greater output

B          A cost that does not require an outlay of money

C          An industry in which industry costs increase with greater output

D         Total revenue minus explicit costs

E          Price times quantity sold

F          Costs that do vary with output

G          The change in total revenue from selling an additional unit

H         A cost that does not vary with the quantity produced

I           The time after all exit or entry has occurred

J           An industry in which industry costs decrease with an increase in output

K         These occur when P = AC

L          The change in total cost from producing an additional unit

M         The cost per unit, i.e., the total cost of producing Q units divided by Q

N         According to Frank H. Knight, this was insurable

O         Total revenue minus total costs, including implicit opportunity costs

P          The period before exit or entry can occur

Q         The costs of producing a given quantity of output

R          Above normal-profits are eliminated by entry and below-normal profits are eliminated by exit

S          A cost that requires a money outlay

T         A cost that cannot be recovered

U         According to Frank H. Knight, this was uninsurable

Builder Products, Inc. manufactures a caulking compound that goes through three processing stages prior to completion. Information on work in the first department, cooking, is given below for May:

Materials are added at several stages during the cooking process, whereas labour and overhead costs are incurred uniformly. The company uses the weighted average cost method. The company combines labour and overhead into a single cost category—conversion cost.

Required:
Prepare a production report for the cooking department for May. Use the following three steps in preparing your report:

1. Prepare a quantity schedule and a computation of equivalent units.

2. Compute the costs per equivalent unit for the month. (Round your answers to 3 decimal places.)

3. Using the data from parts (1) and (2), prepare a cost reconciliation. (Round "Cost per equivalent unit" to 3 decimal places and the rest to the nearest dollar amount.)

Note: There is difference of "$46" in both the values due to rounding and we feel a note which reads: "Due to rounding, your "Cost accounted for" may not be equal to "Cost to account for"".

4. Prepare a production report for the cooking department for May. Assuming the company uses the FIFO method. Follow parts (1) to (3). (Leave no cells blank, enter "0" wherever required. Round "Cost per equivalent unit" to 3 decimal places and the rest to the nearest dollar amount.)

  
Quantity Schedule and Equivalent Units

Cost per Equivalent Unit

Cost Reconciliation

Note: There is difference of "$46" in both the values due to rounding and we feel a note which reads: "Due to rounding, your "Cost accounted for" may not be equal to "Cost to account for"".

7. Please answer questions 7a through 7c below. You produce widgets. Currently you produce 4 widgets at a total cost of $40.

7a. What is your average cost of producing widgets? Please show calculation and work.

7b. Suppose that you could produce 6 widgets and the total cost of producing 6 widgets is $30. If you produce 6 widgets, what will your average total cost be? Compared to your answer in 3a, has your average total cost increased or decreased and does your firm experience economies of scale or diseconomies of scale and why? Please show your work and calculations and then explain.

7c. Suppose that you could produce 10 widgets and the total cost of producing 10 widgets is $120. If you produce 10 widgets, what will your average total cost be? Compared to your answer in 7b, has your average total cost increased or decreased and does your firm experience economies of scale or diseconomies of scale and why? Do you think your firm will experience some problems if your firm does experience diseconomies of scale? If so, why? If not, why not? What can you, as a manager of the widget company, do to correct this problem? Explain. Please show your work and calculations and then explain.

PricePrice

Drycleaners has capacity to clean up to

6 comma 0006,000

garments per month.

Requirements

Requirement 1. Complete the following schedule for the three volumes shown. ​(Round all unit costs to the nearest cent and all total costs to the nearest whole​ dollar.)

Advanced Technologies (AT) produces two compression machines that are popular with manufacturers of plastics: no. 165 and no. 172. Machine no. 165 has an average selling price of $29,800, whereas no. 172 typically sells for approximately $27,300. The company is very concerned about quality and has provided the following information: No. 165 No. 172 Number of machines produced and sold 140 190 Warranty costs: Average repair cost per unit $ 890 $ 330 Percentage of units needing repair 70 % 10 % Reliability engineering at $130 per hour 1,590 hours 1,990 hours Rework at AT's manufacturing plant: Average rework cost per unit $ 1,880 $ 1,590 Percentage of units needing rework 40 % 25 % Manufacturing inspection at $60 per hour 290 hours 490 hours Transportation costs to customer sites to fix problems $ 29,300 $ 14,600 Quality training for employees $ 34,600 $ 49,600

Required: 2-a. Using the classifications in requirement (1), compute AT's quality costs for machine no. 165 in dollars and as a percentage of sales revenues. (Round "Percentage of Sales" to 2 decimal places.)

2-b. Using the classifications in requirement (1), compute AT's calculate prevention, appraisal, internal failure, and external failure costs as a percentage of total quality costs. (Round "Percentage of Total Quality Costs" to 2 decimal places. Total may not be equal to 100% due to rounding.)

3-a. Using the classifications in requirement (1), compute AT's quality costs for machine no. 172 in dollars and as a percentage of sales revenues. (Round "Percentage of Sales" to 2 decimal places.)

3-b. Using the classifications in requirement (1), compute AT's calculate prevention, appraisal, internal failure, and external failure costs as a percentage of total quality costs. (Round "Percentage of Total Quality Costs" to 2 decimal places. Total may not be equal to 100% due to rounding.)

The following data in the table below represents the relationship between the number of workers and their outputs in a company for a given day in the short-run:

1-   Fill in the column of marginal products. How might you explain it? (use a graph)

2-    The company has fixed cost (FC) of $150. Use this information to fill in the column for total cost (TC). (use a graph to discuss all types of cost)

3-   Fill in the column for average variable cost (AVC), average fixed cost (AFC) and average total cost (ATC). Explain why average total cost (ATC) takes U-shape. (use a graph)

4-    Fill in the column for marginal cost (MC). Does it increase or decrease ? why?

5-    Compare the data in the two columns of marginal cost (MC) and marginal product (MP). Explain the relationship between both of them. (use a graph)

6- Compare the data in the two columns of marginal cost (MC) and average variable cost (AVC). Explain the relationship between both of them. What is the amount of output at efficient scale?(use a graph)

Note : the Answers should be computerized

The following data in the table below represents the relationship between the number of workers and their outputs in a company for a given day in the short-run:  

Q1

Fill in the column of marginal products. How might you explain it? (Use a graph).

Q2

The company has fixed cost (FC) of $150. Use this information to fill in the column for total cost (TC). (Use a graph to discuss all types of cost)

Q3

Fill in the column for average variable cost (AVC), average fixed cost (AFC) and average total cost (ATC). Explain why average total cost (ATC) takes U-shape. (Use a graph)

Q4

Fill in the column for marginal cost (MC). Does it increase or decrease? Why?

Q5

Compare the data in the two columns of marginal cost (MC) and marginal product (MP). Explain the relationship between both of them. (Use a graph)

Q6

Compare the data in the two columns of marginal cost (MC) and average variable cost (AVC). Explain the relationship between both of them. What is the amount of output at efficient scale? (Use a graph)          

After completing Steps? 1-4 of the process costing? procedure, Drumm ?Corp., arrived at the following equivalent units and costs per equivalent unit for its final production department for the month of October?:

Requirement 1a. How much cost should be assigned to the units completed and transferred out to finished goods inventory during October question mark October?

Determine the costs that should be assigned to the units completed and transferred out to finished goods inventory. Enter the number of units completed and transferred out in the first answer? box, then enter the applicable cost? amounts, and finally calculate the total cost. ?(Enter quantities? first, then the cost? amounts.)

??

Requirement 1b. How much cost should be assigned to the partially complete units still in ending work in process inventory at the end of October question mark October?

Now determine the costs that should be assigned to the units still in ending work in process inventory. For each category of? costs, enter the number of units in ending work in process inventory in the first answer? box, then enter the applicable cost? amount, and finally calculate the total cost.

??

Requirement 2. What was the Total Cost Accounted For during October? What other important figure must this? match? What does this figure tell? you?

Calculate the total costs accounted? for: $ ?

The Total Costs Accounted For figure must match the ? ?

Total Costs to Account For Total Ending Work in Process Inventory figure.In other? words, the company must assign ??

Requirement 2. What was the Total Cost Accounted For during October ?

What other important figure must this? match? What does this figure tell? you?

Calculate the total costs accounted? for: ?$ ?

The Total Costs Accounted For figure must match the    ?? figure.??

In other? words, the company must assign ??of the costs that were in the work in process account during the period to either

?1)

2)

Requirement 3. What is Drumm?'s average cost of making each unit of its product from the first production department all the way through the final production? department? ?(Round your answer to the nearest? cent.)

Drumm ?Corp.'s cost of making each unit is $.......?