a)Why is the ATC U-Shaped?
b)Why is marginal curve upward sloping in the short run ?
c)Where and why does the MC curve cross the ATC curve?
d)Given values for ATC and AVC,how would you determine Fixed cost (what are the steps necessary to get from the first twoto the last one )?
e)Given ATC,how would you determine total cost?
f)Graphically show and verbaly explain what the general pattern of and relationship between fixed cost,variable cost and total cost as output increase?
g)Graphically show and verbally explain what the general pattern of and relationship between average total cost,average variable cost and marginal cost as output increases?
In: Economics
1. Norton Company’s manufacturing costs for 2009 were as follows: Direct materials, P300, 000; Direct labor – P400, 000; Factory overhead variable – P80, 000 and fixed – P50, 000.
2. The total maintenance costs of Silver Company in the last four months are presented below:
Month Machine hours Maintenance cost
January 7, 200 P450, 000
February 6, 800 P422, 000
March 7, 000 P440, 000
April 6, 400 P418, 000
In: Accounting
McGuire Metals Ltd uses the periodic inventory method and had the following inventory information available:
|
Units |
Unit Cost |
Unit Price |
||
|
1st January |
Beginning inventory |
38 |
$3 |
|
|
20th February |
Sale |
15 |
$5 |
|
|
25th July |
Purchase |
20 |
$4 |
|
|
20th October |
Purchase |
10 |
$5.5 |
|
|
20th December |
Sale |
30 |
$8 |
Required
What would the Inventory amount be as reported on the balance sheet at 31 December 2019 if the perpetual LIFO method is used?
Use the following template in your Word document file.
|
Metro Computer Company Ltd. |
|||||||||
|
FIFO |
|||||||||
|
Purchases |
Cost of sales |
Inventory on hand |
|||||||
|
Date |
Quantity |
Unit cost |
Total cost |
Quantity |
Unit cost |
Total cost |
Quantity |
Unit cost |
Total cost |
In: Accounting
The following data have been extracted from the records of Puzzle, Inc.:
| February | August | ||||||
| Production level, in units | 11,800 | 25,960 | |||||
| Variable costs | $ | 33,040 | $ | ? | |||
| Fixed costs | ? | 32,500 | |||||
| Mixed costs | 29,120 | ? | |||||
| Total costs | $ | 94,660 | $ | 161,212 | |||
Required:
a. Calculate the missing costs. (Do not round intermediate calculations.)
b. Calculate the cost formula for mixed cost using the high-low method. (Do not round intermediate calculations. Round "Variable cost" to 2 decimal places.)
cost formula _____ + _____ per unit
c. Calculate the total cost that would be incurred for the production of 16,949 units. (Do not round intermediate calculations.)
Total cost ____
d. Identify the two key cost behavior assumptions made in the calculation of your answer to part c.
cost behavior pattern is ____ relevant range ____
In: Accounting
| Waterways has two major public-park projects to provide with
comprehensive irrigation in one of its service locations this
month. Job J57 and Job K52 involve 15 acres of landscaped terrain,
which will require special-order, sprinkler heads to meet the
specifications of the project. Using a job cost system to produce
these parts, the following events occurred during December. Raw materials were requisitioned from the company’s inventory on December 2 for $5,058; on December 8 for $1,056; and on December 14 for $3,459. In each instance, two-thirds (2/3) of these materials were for J57 and the rest for K52. Six time tickets were turned in for these two projects for a total amount of 18 hours of work. All the workers were paid $17.5 per hour. The time tickets were dated December 3, December 9, and December 15. On each of those days, 6 labor hours were spent on these jobs, two-thirds (2/3) for J57 and the rest for K52. The predetermined overhead rate is based on machine hours. The expected machine hour use for the year is 2,110 hours, and the anticipated overhead costs are $844,000 for the year. The machines were used by workers on projects K52 and J57 on December 3, 9, and 15. Six machine hours were used for project K52 (2 each day), and 8.5 machine hours were used for project J57 (2.5 the first day and 3 each of the other days). Both of these special orders were completed on December 15, producing 200 sprinkler heads for J57 and 100 sprinkler heads for K52. Additional job order activities during this period included:
|
Set up the job cost sheets for Job No. J57 and Job No. K52.
Determine the total cost for each manufacturing special order for
these jobs. (Round unit costs to 2 decimal places, e.g.
12.25.)
|
Journalize the activities from these job cost sheets in the
general journal. Also, journalize the other costs that occurred
during this period. (Credit account titles are
automatically indented when amount is entered. Do not indent
manually. Record journal entries in the order presented in the
problem. Round answers to 0 decimal places, e.g.
5,275.)
|
Assuming that Manufacturing Overhead has a debit balance of
$3,600, determine whether overhead has been under/over applied and
make the adjusting entry. (Credit account titles are
automatically indented when amount is entered. Do not indent
manually.)
|
In: Accounting
11. Average fixed cost
|
a. |
decreases as output increases unless there is zero fixed cost. |
|
b. |
may increase as output increases. |
|
c. |
is not related to output. |
|
d. |
None of the above. |
12. Economies of scale occur when
|
a. |
short-run average total costs rise as output increases. |
|
b. |
long-run average total costs fall as output increases. |
|
c. |
average fixed costs are increasing. |
|
d. |
All of the above. |
13. Which of the following is a characteristic of a competitive market?
|
a. |
Buyers and sellers are price makers. |
|
b. |
Each firm sells a differentiated product. |
|
c. |
Entry is unlimited. |
|
d. |
Each firm chooses a price level that maximizes profits. |
14. Firms operating in competitive markets produce output levels where marginal revenue equals
|
a. |
marginal cost. |
|
b. |
average revenue. |
|
c. |
total revenue divided by output. |
|
d. |
All of the above are correct. |
15. If a competitive firm is currently producing a level of output at which marginal cost exceeds marginal revenue, then
|
a. |
a one-unit increase in output will increase the firm's profit. |
|
b. |
a one-unit decrease in output will increase the firm's profit. |
|
c. |
total revenue exceeds total cost. |
|
d. |
total revenue equals total cost. |
In: Economics
A quality control activity analysis indicated the following four activity costs of a manufacturing department:
|
1 |
Rework |
$37,440.00 |
|
2 |
Inspecting incoming raw materials |
51,840.00 |
|
3 |
Warranty work |
25,920.00 |
|
4 |
Process improvement effort |
172,800.00 |
|
5 |
Total |
$288,000.00 |
| Amount Descriptions | |
| Appraisal | |
| External failure | |
| Internal failure | |
| Lead time | |
| Prevention | |
| Setup time |
Sales are $1,200,000. Prepare a cost of quality report. Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries. Round percents to one decimal place.
|
Cost of Quality Report |
|
1 |
Quality Cost Classification |
Quality Cost |
Percent of Total Quality Cost |
Percent of Total Sales |
|
2 |
||||
|
3 |
||||
|
4 |
||||
|
5 |
||||
|
6 |
Total |
In: Accounting
Rodriguez Company pays $320,000 for real estate plus $16,960 in
closing costs. The real estate consists of land appraised at
$207,000; land improvements appraised at $69,000; and a building
appraised at $184,000.
Required:
1. Allocate the total cost among the three
purchased assets.
2. Prepare the journal entry to record the
purchase.
Allocate the total cost among the three purchased assets. (Round your "Apportioned Cost" answers to 2 decimal places.)
|
Note: Enter debits before credits.
|
In: Accounting
Hi-Tek Manufacturing, Inc., makes two types of industrial component parts—the B300 and the T500. An absorption costing income statement for the most recent period is shown:
|
Hi-Tek Manufacturing Inc. Income Statement |
|||
| Sales | $ | 1,761,600 | |
| Cost of goods sold | 1,237,964 | ||
| Gross margin | 523,636 | ||
| Selling and administrative expenses | 600,000 | ||
| Net operating loss | $ | (76,364 | ) |
Hi-Tek produced and sold 60,300 units of B300 at a price of $21 per unit and 12,700 units of T500 at a price of $39 per unit. The company’s traditional cost system allocates manufacturing overhead to products using a plantwide overhead rate and direct labor dollars as the allocation base. Additional information relating to the company’s two product lines is shown below:
| B300 | T500 | Total | ||||
| Direct materials | $ | 400,400 | $ | 162,400 | $ | 562,800 |
| Direct labor | $ | 120,100 | $ | 42,900 | 163,000 | |
| Manufacturing overhead | 512,164 | |||||
| Cost of goods sold | $ | 1,237,964 | ||||
The company has created an activity-based costing system to evaluate the profitability of its products. Hi-Tek’s ABC implementation team concluded that $50,000 and $110,000 of the company’s advertising expenses could be directly traced to B300 and T500, respectively. The remainder of the selling and administrative expenses was organization-sustaining in nature. The ABC team also distributed the company’s manufacturing overhead to four activities as shown below:
|
Manufacturing Overhead |
Activity | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Activity Cost Pool (and Activity Measure) | B300 | T500 | Total | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Machining (machine-hours) | $ | 202,224 | 90,400 | 62,800 | 153,200 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Setups (setup hours) | 147,840 | 72 | 280 | 352 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Product-sustaining (number of products) | 101,400 | 1 | 1 | 2 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other (organization-sustaining costs) | 60,700 | NA | NA | NA | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total manufacturing overhead cost | $ | 512,164 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
REQUIREMENTS- Compute the product margins for B300 and T500 under the activity-based costing system. (Negative product margins should be indicated by a minus sign. Round your intermediate calculations to 2 decimal places.)
Prepare a quantitative comparison of the traditional and activity-based cost assignments. (Round your intermediate calculations to 2 decimal places and "Percentage" answers to 1 decimal place and and other answers to the nearest whole dollar amounts.)
|
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In: Accounting
Alexa owns a condominium near Cocoa Beach in Florida. This year,
she incurs the following expenses in connection with her
condo:
| Insurance | $ | 3,350 |
| Mortgage interest | 6,650 | |
| Property taxes | 2,800 | |
| Repairs & maintenance | 860 | |
| Utilities | 2,600 | |
| Depreciation | 23,800 | |
During the year, Alexa rented out the condo for 134 days. Alexa’s
AGI from all sources other than the rental property is $200,000.
Unless otherwise specified, Alexa has no sources of passive income.
Assume there are 365 days in the year.
Assume that in addition to renting the condo for 134 days, Alexa uses the condo for 8 days of personal use. Also assume that Alexa receives $49,750 of gross rental receipts. Answer the following questions: (Do not round intermediate calculations. Round your final answers to the nearest whole dollar amount.)
a. What is the total amount of for AGI deductions relating to the condo that Alexa may deduct in the current year? Assume she uses the IRS method of allocating expenses between rental and personal days. (Amounts to be deducted should be indicated with a minus sign.)
Alexa owns a condominium near Cocoa Beach in Florida. This year,
she incurs the following expenses in connection with her
condo:
| Insurance | $ | 3,350 |
| Mortgage interest | 6,650 | |
| Property taxes | 2,800 | |
| Repairs & maintenance | 860 | |
| Utilities | 2,600 | |
| Depreciation | 23,800 | |
During the year, Alexa rented out the condo for 134 days. Alexa’s
AGI from all sources other than the rental property is $200,000.
Unless otherwise specified, Alexa has no sources of passive income.
Assume there are 365 days in the year.
Assume that in addition to renting the condo for 134 days, Alexa uses the condo for 8 days of personal use. Also assume that Alexa receives $49,750 of gross rental receipts. Answer the following questions: (Do not round intermediate calculations. Round your final answers to the nearest whole dollar amount.)
a. What is the total amount of for AGI deductions relating to the condo that Alexa may deduct in the current year? Assume she uses the IRS method of allocating expenses between rental and personal days. (Amounts to be deducted should be indicated with a minus sign.)
In: Accounting