Suppose there are exactly two farms, Farm A and Farm B, producing buffalo gourds in our market. They face a common inverse demand curve, P = 60 – (QA + QB), where QA and QB are the number of gourds produced by each farm. (Note that the gourds grown on the two farms are perfect substitutes.) Each farm faces marginal cost = average cost = $6 per gourd. a. Suppose these farms compete by choosing their profit maximizing level of output, conditional on the other firm’s choice of a level of output (so they are playing “Cournot” strategies).

Derive QA(the profit maximizing choice for A) as a function of QB. That is, find the QA that equates marginal revenue and marginal cost.

To do this, note that Total Revenue for A = PQA = (60-(QA + QB)) * QA, which means that Marginal revenue for A = 60 - 2QA - QB

Also write down the profit maximizing value of QB as a function of QA. Substitute one profit- maximizing function into the other to derive the resulting levels of QA, QB, and P. Describe why this result is a Nash equilibrium.

Exercise 3-07

A partial adjusted trial balance of Skysong Company at January 31, 2020, shows the following.

Answer the following questions, assuming the year begins January 1.

1.  If the amount in Supplies Expense is the January 31 adjusting entry, and $850 of supplies was purchased in January, what was the balance in Supplies on January 1?

2.  If the amount in Insurance Expense is the January 31 adjusting entry, and the original insurance premium was for one year, what was the total premium?  When was the policy purchased?

3.  If $2,650 of salaries was paid in January, what was the balance in Salaries and Wages Payable at December 31, 2019?

4.  If $1,750 was received in January for services performed in January, what was the balance in Unearned Service Revenue at December 31, 2019? Assume that there are no accounts receivable.

Which of these would be associated with perfect competition in a market?

Question 7 options:

In 2018, the Westgate Construction Company entered into a contract to construct a road for Santa Clara County for $10,000,000. The road was completed in 2020. Information related to the contract is as follows:

Westgate recognizes revenue over time according to percentage of completion.

rev: 09_15_2017_QC_CS-99734

Required:

1. Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years. (Do not round intermediate calculations. Loss amounts should be indicated with a minus sign.)

3. Complete the information required below to prepare a partial balance sheet for 2018 and 2019 showing any items related to the contract. (Do not round intermediate calculations.)

The owner of Haverty’s Furniture Company was studying the relationship between sales and the amount spent on advertising. The sales information for the last four months is repeated below:

Draw a scatter diagram and discuss whether or not it indicates that there is a relationship between the advertising expense and sales revenue.

Compute the coefficient of correlation. Interpret it.

Compute the coefficient of determination. Interpret it.

Test to determine whether the coefficient of correlation in the population is significantly different from zero. Use alpha 0.05.

Develop the estimated regression equation/the least squares line that could be used to predict the sales revenue based on the advertising expense. Interpret the regression coefficients.

Compute the standard error of estimate.

Test to determine whether the regression slope coefficient in the population is significantly different zero. Use alpha 0.05.

Are the results from part d and g consistent? Should they be? Justify your answer.

Estimate sales when $3 million is spent on advertising.

Exercise 2: A new IS project has been proposed that is expected to produce not only cost savings but also an increase in revenue. The initial capital cost to establish the system is estimated to be $500,000. The remaining cash flow data is presented in Table 2.10. Using a spreadsheet program, calculate the payback period, internal rate of return, and net present value for this project. Assume that the cost of capital is 7% and the effective tax rate is 40% How would the payback, internal rate of return, and net present value change if the capital cost for the project was $750,000 and the cost saving and increased revenue were decreased by 25% each year. Table:(1 2 3 4 5 6) = years Capital 500,000 Incresed Revenue $50 $75 $100 $115 $130 Cost Savings 110 125 125 125 125 Depreciation expense 150 125 100 75 50 Operating and maintenance epanse 75 50 50 50 50 all amounts are in hundreds and thousands Years are 2-6 values. Year 1 is starting with 500,000.

Kaylar Clinic uses patient-visits as its measure of activity. During September, the clinic budgeted for 3,000 patient-visits, but its actual level of activity was 2,900 patient-visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for September:

Data used in budgeting:

                                                 Fixed Element per Month Variable Element per Month

Revenue …………………….. $0 $37.20

Personal Expenses…………. $27600 $11.30

Medical Expenses………….. $1500 $6.80

Occupancy Expenses…….... $6200 $1.70

Administrative Expenses…... $3600 $0.30

Actual results for September:

Revenue …………………….. $105010                                   

Personal Expenses…………. $61020                                   

Medical Expenses………….. $22120                                   

Occupancy Expenses…….... $10930                                 

Administrative Expenses…... $4570

1. Compute Kaylar's total expense spending variance. State answer as a positive

2. Compute Kaylar's total expense activity variance. State answer as a positive.

3. Compute Kaylar's total revenue activity variance. State answer as a positive.

4. What was the total net operating income activity variance for Kaylars? State answer as a positive.

Common-Size Income Statements
Consider the following income statement data from the Ross Company:

Prepare common-size income statements for each year.

Note: Round answers to one decimal place (ex: 0.2345 = 23.5%).