Lupo Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on the following data:

Recently, Job T687 was completed with the following characteristics:

The total job cost for Job T687 is closest to: (Round your intermediate calculations to 2 decimal places.)

Multiple Choice

• $2,060

• $1,890

• $1,430

• $2,690

The table below provides revenue and cost information for KB & Children Company Ltd, a perfectly competitive firm that produces leather shoes.

1. Complete the above table.
2. What is the firm’s total cost of producing 5000 pairs of shoes?
3. What is the average revenue of the firm? Is this amount equal to the firm’s marginal revenue? Explain.
4. At what output level and price will the firm maximize its economic profits?
5. Using the information provided by the above table, draw a diagram showing the firm making short run economic profits.

Special Order Review company has the following information relating to their plastics factory

Current Selling Price $10.00

Current Monthly Production 15,000 units

Total Direct Materials ( all Variable) $45,000.00

Total Direct Labor (all variable) $15,000.00

Total Overhead (50% variable) $50,000.00

Total Marketing Cost (75% variable) $30,000.00

A new customer has offered to buy 3000 units but will pay only $7.50. The special order will incur additional costs of $1.50 per unit but there will be no additional marketing costs paid.

REQUIRED: 1. Calculate the current variable cost per unit and fixed cost.

2. Calculate the gain or loss on the special order

a. If the marginal revenue is less than the marginal cost, what should a profit-maximizing company do?

b. In a perfectly competitive graph, how does one calculate the economic profit?

c. What is the shutdown point in a perfectly competitive firm? '

d. Briefly, what is the difference between economies of scale and diseconomies of scale? Why is it important to the firm?

e. Given the following total cost function TC(q) = 1000 + 13q. Find the fixed cost, variable cost, average total cost, and the marginal cost. How do you know that these costs are in the short-run? Explain.

Suppose that there is a natural monopoly that faces a demand curve D(P) = 10000 - 2P with the total cost function C(Q) = 1000 + 100Q.

The profit maximizing quantity for the natural monopolist, in the presence of a marginal cost pricing rule is ______ units

The profit maximizing price that will be set by the monopolist that will be set in the presence of a marginal cost pricing rule is $_______

The average total cost per unit at the profit maximizing level of output in the presence of a marginal cost pricing rule is $______

The profit for the natural monopolist under the marginal cost pricing rule, given they set the profit maximizing price and level of output, is $______

The sales of mouthwash at MARKAL Pharmacy over the past 6 months have average 2,000 cases per month, which is the current order quantity. Markal's cost is $12.00 per case. The company estimates its cost of capital to be 12 percent. Insurance, taxes, breakage, handling, and pilferage are estimated to be approximately 6 percent of item cost. The estimated order cost is $38.00. What is economic order quantity? What is the total inventory cost under economic order quantity? Compare the total cost savings with the current purchase order of 2000 case per month. Show all calculation.

Why is it important to identify the most appropriate cost drivers for a particular product?

A) so managers can identify the activities necessary to manufacture a product

B) so managers can control product costs better

C) so managers can predict product costs better and make better decisions

D) B and C

Answer:

Cost drivers are ________.

A) the different functions in the value chain

B) different types of functional areas in the firm

C) measures of activities that require the use of resources and thereby cause costs

D) different types of cost calculations

Answer:

Within the relevant range, the total amount of ________ cost changes in direct proportion to changes in the cost driver. Within the relevant range, the total amount of ________ cost does not change in direct proportion to changes in the cost driver.

A) fixed; variable

B) variable; fixed

C) step; mixed

D) mixed; step

Answer:

What happens when the cost-driver level increases within the relevant range?

A) Total fixed costs remain unchanged.

B) Fixed costs per unit of cost driver increase.

C) Total variable costs decrease.

D) Variable costs per unit of cost driver increase.

Answer:

Which of the following costs is a fixed cost?

A) cost of dairy ingredients used to produce ice cream

B) depreciation expense on factory building

C) fuel used by delivery trucks

D) labor wages of workers who mix dairy ingredients to make ice cream

question

please analyze that comparison of the overhead allocation to each service unit under both methods, traditional and Activity-Based Costing (ABC), which method is better for this company??

Cost of Production Report: Average Cost Method

Sunrise Coffee Company roasts and packs coffee beans. The process begins in the Roasting Department. From the Roasting Department, the coffee beans are transferred to the Packing Department. The following is a partial work in process account of the Roasting Department at December 31:

Required:

Prepare a cost of production report, using the average cost method, and identify the missing amounts for Work in Process—Roasting Department. If required, round your cost per equivalent unit answer to two decimal places.