The Harris Corporation currently has the following ratios:

Total asset turnover = 1.6 (sales/total assets)

Total debt to total assets = .5

Current ratio = 1.7

Current liabilities = $2,000,000

(a) If Hariss's sales are $16,000,000 what is the amount of total assets? (1.6=sales/TA)

(b) Of the total in (a) above, what is the amount of current assets? (current ratio = CA/CL=1.7)

(c) What is the total debt of the firm? (total debt to assets = total debt/TA from (a))

(d) If Harriss's sales are expected to increase by $6,400,000 and existing ratios remain unchanged, what is the amount additional assets required? Hint: use 6,400,000 as your sales figure to compute your additional assets. Use the total asset turnover ratio – as this not change.

Traditional Product Costing versus Activity-Based Costing
Assume that Panasonic Company has determined its estimated total manufacturing overhead cost for one of its plants to be $436,000 consisting of the following activity cost pools for the current month:

Total direct labor hours used during the month were 16,000. Panasonic produces many different electronic products, including the following two products produced during the current month:

Required
a. Calculate the total per-unit cost of each model using direct labor hours to assign manufacturing overhead to products.
Round answers for unit cost to two decimal places, if applicable.

b. Calculate the total per-unit cost of each model using activity-based costing to assign manufacturing overhead to products.
Round answers for unit cost to two decimal places, if applicable.

8.13) A firms produces a product with labor and capital. its production function is described by Q=L+K. The marginal products associated with this production function are MPL =1 and MPK=1. Let w=1, and r=1 be the prices of labor and capital respectively.

a) fund the equation for the firms long-run total cost curve as a function of quantity Q when the prices of labor and capital are w=1 and r=1.

b) find the solution to the firms short-run cost-minimization problem when capital is fixed at a quantity of 5 units, and w=1 and r=1. derive the equation for the firms short-run total cost curve as a function of quantity Q and graph it together with the long-run total cost curve

c)how do the graphs of the short-run and long run total cost curves change when w=1, and r=2?

d) how do the graphs of the short-run and long-run total cost curves change when w=2 and r=1?

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 below:

Hi-Tek produced and sold 60,300 units of B300 at a price of $20 per unit and 12,500 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:

The company has created an activity-based costing system to evaluate the profitability of its products. Hi-Tek’s ABC implementation team concluded that $56,000 and $107,000 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:

****** Required *******

1. Compute the product margins for the B300 and T500 under the company’s traditional costing system. (Do not round your overhead rate. Round your other intermediate and final answers to the nearest whole number.)

2. 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.)

3. Prepare a quantitative comparison of the traditional and activity-based cost assignments. (Do not round your overhead rate. Round your other intermediate calculations and final answers to the nearest whole number. Round your "Percentage" answer to 1 decimal place. (i.e. .1234 should be entered as 12.3))

( All the "?" spaces are the ones I NEED answered)

Crosshill Company’s total overhead costs at various levels of activity are presented below:

Assume that the overhead cost above consists of utilities, supervisory salaries, and maintenance. The breakdown of these costs at the 39,000-machine-hour level of activity in May is as follows:

The company wants to break down the maintenance cost into its variable and fixed cost elements.

Required:

1. Estimate how much of the $262,060 of overhead cost in July was maintenance cost. (Hint: To do this, first determine how much of the $262,060 consisted of utilities and supervisory salaries. Think about the behaviour of variable and fixed costs within the relevant range.) (Do not round intermediate calculations.)

2. Using the high–low method, estimate a cost formula for maintenance. (Do not round your intermediate calculations. Round the "Variable cost per unit" to 2 decimal places.)

3. Express the company’s total overhead cost in the form Y = a + bX. (Do not round your intermediate calculations. Round the "Variable cost per unit" to 2 decimal places.)

4. What total overhead cost would you expect to be incurred at an activity level of 44,000 machine-hours? (Do not round intermediate calculations.)

Churchill Products is considering updating its cost system to an activity-based costing system and is interested in understanding the effects. The company’s cost accountant has identified three overhead cost pools along with appropriate cost drivers for each pool.

The company manufactures three models of water basins (Oval, Round, and Square). The plans for production for the next year and the budgeted direct costs and activity by product line are as follows.

Required:

a. The current cost accounting system charges overhead to products based on direct labor-hours. What unit product costs will be reported for the three products if the current cost system continues to be used?
c. What are the cost driver rates for the three cost pools identified by the cost accountant?
d. What unit product costs will be reported for the three products if the ABC system suggested by the cost accountant's classification of cost pools is used?
e. If management should decide to implement an activity-based costing system, what benefits should it expect?

Crosshill Company’s total overhead costs at various levels of activity are presented below:

Assume that the overhead cost above consists of utilities, supervisory salaries, and maintenance. The breakdown of these costs at the 39,000-machine-hour level of activity in May is as follows:

The company wants to break down the maintenance cost into its variable and fixed cost elements.

Required:

1. Estimate how much of the $242,170 of overhead cost in July was maintenance cost. (Hint: To do this, first determine how much of the $242,170 consisted of utilities and supervisory salaries. Think about the behaviour of variable and fixed costs within the relevant range.) (Do not round intermediate calculations.)

2. Using the high–low method, estimate a cost formula for maintenance. (Do not round your intermediate calculations. Round the "Variable cost per unit" to 2 decimal places.)

3. Express the company’s total overhead cost in the form Y = a + bX. (Do not round your intermediate calculations. Round the "Variable cost per unit" to 2 decimal places.)

4. What total overhead cost would you expect to be incurred at an activity level of 44,000 machine-hours? (Do not round intermediate calculations.)

Consider a firm which produces according to the following production function by using labor and capital: f(l,k) = K^1/2 L^1/2

(a) Solve the cost minimization problem of this firm for the given wage rate, w and the rental rate of capital,v. Derive the long-run total cost function of the firm.

(b) Derive the short-run total cost, the short-run average cost, the short- run marginal cost function of the firm under the assumption that capital is the fixed input.

(c) What amount of capital minimizes the short-run total cost?

(d) Is there any relation between the short-run total cost function and the long-run total cost function at the capital level that you find in part (c).

(e) Suppose the wage rate of labor is 2 $, the rental rate of capital is 2 $ and fixed capital input, k ̄, is 2 units. What amount of output minimizes short-run average cost? What is the minimum possible short-run average cost?

(f) What is the short-run marginal cost at the quantity level that you find in part (e)? How is it related to minimum possible short-run average cost?

(g) Find short-run firm supply as a function of input prices, w and v, and output price, p.

(h) Solve the profit maximization of the firm for a given price p, and derive the supply function. (i) Derive the profit function of the firm. (j) Decide whether the production function exhibits constant, increasing or decreasing returns to scale.

Assume that price equals a rising marginal cost at 50 units of output. At this output, total variable cost is $250 and total fixed cost is $300. The product’s price is $6.

a. The perfectly competitive firm will maximize profit by producing ______ units of output.

b. If this firm shuts down, it will lose ______ dollars.

When a purely competitive firm earns a normal economic total profit in the long run, it produces a quantity Q of its final product where $Price = $Marginal Cost and also $Price = Minimum Average Total Cost. Why are these price and cost equalities considered to be beneficial for the entire economy?