13. If a firm shuts down in the short run and produces no output, its total cost will be

a. zero

b. equal to total variable cost

c. equal to explicit costs only

d. equal to total fixed costs

e. equal to implicit costs only

14. The shape of the long-run average cost curve reflects

a. the maximization of total product

b. increasing and diminishing marginal returns

c. economies and diseconomies of scale

d. all of the above

e. falling average fixed costs

15. A firm's long-run average cost curve is also called

a. its planning curve

b. its average fixed-cost curve

c. its production curve

d. Bob

16. In the long-run, a firm will choose a plant size that has the

a. maximum level of resource use per unit of total output

b. minimum average total cost of producing a target level of output

c. minimum of average variable costs

d. capacity to produce the largest amount of output possible

17. The price charged by a perfectly competitive firm is determined by

a. the cartel that is established amongst the firms in the industry

b. market supply and demand

c. the firm's average variable costs

d. each individual firm

e. the government

18. The demand curve for the perfectly competitive firm is

a. upward sloping

b. perfectly inelastic

c. perfectly elastic

d. the same as its market demand curve

e. the portion of its marginal cost curve that lies above average variable costs

19. A perfectly competitive (PC) firm will not set its price below market price because

a. demand will exceed supply

b. demand is perfectly inelastic .

c. the firm can sell any amount it chooses at the prevailing market price

d. the statement is incorrect—the firm will sell more if it sets price below market price

20. A perfectly competitive firm’s (short-run) supply curve is its

a. marginal cost curve above its minimum average total cost (ATC)

b. marginal cost curve—the whole thing

c. marginal cost curve above its minimum average variable cost (AVC)

d. demand curve

Exercise 7-14 Calculating and Interpreting Activity-Based Costing Data [LO7-3, LO7-4]

Hiram’s Lakeside is a popular restaurant located on Lake Washington in Seattle. The owner of the restaurant has been trying to better understand costs at the restaurant and has hired a student intern to conduct an activity-based costing study. The intern, in consultation with the owner, identified three major activities and then completed the first-stage allocations of costs to the activity cost pools. The results appear below.

The above costs include all of the costs of the restaurant except for organization-sustaining costs such as rent, property taxes, and top-management salaries.

Some costs, such as the cost of cleaning the linens that cover the restaurant's tables, vary with the number of parties served. Other costs, such as washing plates and glasses, depend on the number of diners served or the number of drinks served.

Prior to the activity-based costing study, the owner knew very little about the costs of the restaurant. She knew that the total cost for the month (including organization-sustaining costs) was $180,000 and that 12,000 diners had been served. Therefore, the average cost per diner was $15.

Required:

1&2. According to the activity-based costing system, what is the total cost and average cost per diner for serving each of the following parties of diners? (Round your intermediate calculations to 2 decimal places. Round your Total Cost final answers to 2 decimal places and your Average Cost final answers to 3 decimal places.)

Garrison_16e_Rechecks_2019_10_08

Next Visit question map

Question7of10Total7 of 10

Prev

Hiram’s Lakeside is a popular restaurant located on Lake Washington in Seattle. The owner of the restaurant has been trying to better understand costs at the restaurant and has hired a student intern to conduct an activity-based costing study. The intern, in consultation with the owner, identified three major activities and then completed the first-stage allocations of costs to the activity cost pools. The results appear below.

The above costs include all of the costs of the restaurant except for organization-sustaining costs such as rent, property taxes, and top-management salaries.

Some costs, such as the cost of cleaning the linens that cover the restaurant's tables, vary with the number of parties served. Other costs, such as washing plates and glasses, depend on the number of diners served or the number of drinks served.

Prior to the activity-based costing study, the owner knew very little about the costs of the restaurant. She knew that the total cost for the month (including organization-sustaining costs) was $180,000 and that 12,000 diners had been served. Therefore, the average cost per diner was $15.

Required:

1&2. According to the activity-based costing system, what is the total cost and average cost per diner for serving each of the following parties of diners? (Round your intermediate calculations to 2 decimal places. Round your Total Cost final answers to 2 decimal places and your Average Cost final answers to 3 decimal places.)

****** MY BOLDED ANSWERS ARE ALL WRONG****** :( The comment said figures were missing but this is the entire question...

1, Which of the following is characteristic of a perfect competitive seller's demand curve?

A, Price and marginal revenue are equal at all levels of output.

B, marginal revenue is less than price.

C, The price elasticity |E| is always 1.

D, It is the same as the market demand curve.

2,A perfect competitive firm will always make an economic profit if:

A, P = AC.

B, P > AVC.

C, P = MC.

D, P > AC.

3, If a firm is confronted with economic losses in the short run, it will decide whether or not to produce (or shutdown) by comparing:

A, marginal revenue and marginal cost.

B, price and average variable cost.

C, total revenue and total cost.

D, total revenue and total fixed cost.

4, A firm finds that at its MR = MC output, its TC = $5000, VC = $4000 and total revenue is $2000. In the short run, this firm should:

A, shut down and lose $0

B, produce and lose $3000

C, produce and earn $3000 profits

D, shutdown and lose $1000

E, produce and lose $1000

5, In the short run a perfectly competitive seller will shut down if:

A, it cannot produce at an economic profit.

B, price is less than average variable cost.

C, price is less than average fixed cost.

D, price is less than average cost.

Woh Che Co. has four departments: Materials, Personnel, Manufacturing, and Packaging. In a recent month, the four departments incurred three shared indirect expenses. The amounts of these indirect expenses and the bases used to allocate them follow.

Departmental data for the company’s recent reporting period follow.

1. Use this information to allocate each of the three indirect expenses across the four departments.
2. Prepare a summary table that reports the indirect expenses assigned to each of the four departments.

• Required 1

SupervisionUtilitiesInsuranceTotalMaterialsPersonnelManufacturingPackagingTotals

Jarvene Corporation uses the FIFO method in its process costing system. The following data are for the most recent month of operations in one of the company’s processing departments:

The cost of beginning inventory according to the company’s costing system was $7,830 of which $4,824 was for materials and the remainder was for conversion cost. The costs added during the month amounted to $184,110. The costs per equivalent unit for the month were:

Required:

1. Compute the total cost per equivalent unit for the month.

2. Compute the equivalent units of material and conversion in the ending inventory.

3. Compute the equivalent units of material and conversion that were required to complete the beginning inventory.

4. Compute the number of units started and completed during the month.

5. Compute the cost of ending work in process inventory for materials, conversion, and in total for the month.

6. Compute the cost of the units transferred to the next department for materials, conversion, and in total for the month.

Complete this question by entering your answers in the tabs below.

• Required 1
• Required 2
• Required 3
• Required 4
• Required 5
• Required 6

Compute the total cost per equivalent unit for the month. (Round your answer to 2 decimal places.)

Complete this question by entering your answers in the tabs below.

• Required 1
• Required 2
• Required 3
• Required 4
• Required 5
• Required 6

Compute the equivalent units of material and conversion in the ending inventory.

Complete this question by entering your answers in the tabs below.

• Required 1
• Required 2
• Required 3
• Required 4
• Required 5
• Required 6

Compute the equivalent units of material and conversion that were required to complete the beginning inventory.

Complete this question by entering your answers in the tabs below.

• Required 1
• Required 2
• Required 3
• Required 4
• Required 5
• Required 6

Compute the number of units started and completed during the month.

• Required 1
• Required 2
• Required 3
• Required 4
• Required 5
• Required 6

Compute the cost of ending work in process inventory for materials, conversion, and in total for the month. (Round your intermediate calculations to 2 decimal places.)

Compute the cost of the units transferred to the next department for materials, conversion, and in total for the month. (Round your intermediate calculations to 2 decimal places.)

Job Costs Using a Plantwide Overhead Rate

Naranjo Company designs industrial prototypes for outside companies. Budgeted overhead for the year was $225,000, and budgeted direct labor hours were 18,000. The average wage rate for direct labor is expected to be $25 per hour. During June, Naranjo Company worked on four jobs. Data relating to these four jobs follow:

Job 39 Job 40 Job 41 Job 42
Beginning balance $24,800 $32,500 $15,400 $1,600
Materials requisitioned 20,400 23,200 10,400 13,400
Direct labor cost 11,500 20,300 5,050 4,300

Overhead is assigned as a percentage of direct labor cost. During June, Jobs 39 and 40 were completed; Job 39 was sold at 125 percent of cost. (Naranjo had originally developed Job 40 to order for a customer; however, that customer was near bankruptcy and the chance of Naranjo being paid was growing dimmer. Naranjo decided to hold Job 40 in inventory while the customer worked out its financial difficulties. Job 40 is the only job in Finished Goods Inventory.) Jobs 41 and 42 remain unfinished at the end of the month.

Required:

1. Calculate the balance in Work in Process as of June 30.

$

2. Calculate the balance in Finished Goods as of June 30.

$

3. Calculate the cost of goods sold for June.

$

4. Calculate the price charged for Job 39. Round your answer to the nearest cent.

$

5. What if the customer for Job 40 was able to pay for the job by June 30? What would happen to the balance in Finished Goods?

What would happen to the balance of Cost of Goods Sold?

Job Costs Using a Plantwide Overhead Rate

Naranjo Company designs industrial prototypes for outside companies. Budgeted overhead for the year was $455,000, and budgeted direct labor hours were 26,000. The average wage rate for direct labor is expected to be $35 per hour. During June, Naranjo Company worked on four jobs. Data relating to these four jobs follow:

Overhead is assigned as a percentage of direct labor cost. During June, Jobs 39 and 40 were completed; Job 39 was sold at 125 percent of cost. (Naranjo had originally developed Job 40 to order for a customer; however, that customer was near bankruptcy and the chance of Naranjo being paid was growing dimmer. Naranjo decided to hold Job 40 in inventory while the customer worked out its financial difficulties. Job 40 is the only job in Finished Goods Inventory.) Jobs 41 and 42 remain unfinished at the end of the month.

Required:

1. Calculate the balance in Work in Process as of June 30.

$

2. Calculate the balance in Finished Goods as of June 30.

$

3. Calculate the cost of goods sold for June.

$

4. Calculate the price charged for Job 39. Round your answer to the nearest cent.

$

5. What if the customer for Job 40 was able to pay for the job by June 30? What would happen to the balance in Finished Goods?

What would happen to the balance of Cost of Goods Sold?

Job Costs Using a Plantwide Overhead Rate

Naranjo Company designs industrial prototypes for outside companies. Budgeted overhead for the year was $270,000, and budgeted direct labor hours were 27,000. The average wage rate for direct labor is expected to be $20 per hour. During June, Naranjo Company worked on four jobs. Data relating to these four jobs follow:

Overhead is assigned as a percentage of direct labor cost. During June, Jobs 39 and 40 were completed; Job 39 was sold at 115 percent of cost. (Naranjo had originally developed Job 40 to order for a customer; however, that customer was near bankruptcy and the chance of Naranjo being paid was growing dimmer. Naranjo decided to hold Job 40 in inventory while the customer worked out its financial difficulties. Job 40 is the only job in Finished Goods Inventory.) Jobs 41 and 42 remain unfinished at the end of the month.

Required:

1. Calculate the balance in Work in Process as of June 30.

$

2. Calculate the balance in Finished Goods as of June 30.

$

3. Calculate the cost of goods sold for June.

$

4. Calculate the price charged for Job 39. Round your answer to the nearest cent.

$

5. What if the customer for Job 40 was able to pay for the job by June 30? What would happen to the balance in Finished Goods?

What would happen to the balance of Cost of Goods Sold?

Job Costs Using a Plantwide Overhead Rate

Naranjo Company designs industrial prototypes for outside companies. Budgeted overhead for the year was $187,500, and budgeted direct labor hours were 15,000. The average wage rate for direct labor is expected to be $25 per hour. During June, Naranjo Company worked on four jobs. Data relating to these four jobs follow:

Overhead is assigned as a percentage of direct labor cost. During June, Jobs 39 and 40 were completed; Job 39 was sold at 125 percent of cost. (Naranjo had originally developed Job 40 to order for a customer; however, that customer was near bankruptcy and the chance of Naranjo being paid was growing dimmer. Naranjo decided to hold Job 40 in inventory while the customer worked out its financial difficulties. Job 40 is the only job in Finished Goods Inventory.) Jobs 41 and 42 remain unfinished at the end of the month.

Required:

1. Calculate the balance in Work in Process as of June 30.

$

2. Calculate the balance in Finished Goods as of June 30.

$

3. Calculate the cost of goods sold for June.

$

4. Calculate the price charged for Job 39. Round your answer to the nearest cent.

$

5. What if the customer for Job 40 was able to pay for the job by June 30? What would happen to the balance in Finished Goods?

What would happen to the balance of Cost of Goods Sold?