1. Explain the difference between the market demand curve and the demand curve facing a perfectly competitive firm. Which is more elastic?
2. Because of an increase in the wage rate that it must pay its workers, a perfectly competitive firm’s marginal costs increase so that its marginal cost curve shifts upward. If the price of the product does not change and the firm does not shut down, in a diagram show the impact the higher wage rate has on the quantity the firm produces.
3. Draw a diagram showing the long-run equilibrium for a perfectly competitive firm. Is it possible for a perfectly competitive firm to earn an economic profit in the long run? Explain your answer.

Answer the following multiple choice questions.

5. If firms in a perfectly competitive industry are incurring persistent economic losses, then in the long run some firms will
   1. exit and the price will fall.
   2. exit and the price will rise.
   3. enter and the price may either rise or fall.
   4. exit and the price may either rise or fall.
   6. A perfectly competitive firm’s supply curve is the same as
      1. all of its marginal cost curve.
      2. its marginal cost curve above the minimum point on the AVC curve.
      3. its marginal cost curve above the minimum point on the ATC curve.
      4. its marginal cost curve above the AFC curve.

7. Based on the table above, what is the marginal revenue of the tenth unit of output?
   1. $190
   2. $100
   3. $10
   4. $9

8. A perfectly competitive firm shuts down if its
   1. total revenue is less than its average fixed cost.
   2. total revenue is less than its fixed cost.
   3. price is less than its average variable cost.
   4. price is less than its total variable cost.

In 2021, 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 2023. Information related to the contract is as follows:

Assume that Westgate Construction’s contract with Santa Clara County does not qualify for revenue recognition over time.

Required:
1. Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years.
2-a.In the journal below, complete the necessary journal entries for the year 2021 (credit "Various accounts" for construction costs incurred).
2-b.In the journal below, complete the necessary journal entries for the year 2022 (credit "Various accounts" for construction costs incurred).
2-c. In the journal below, complete the necessary journal entries for the year 2023 (credit "Various accounts" for construction costs incurred).
3. Complete the information required below to prepare a partial balance sheet for 2021 and 2022 showing any items related to the contract.
4. Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years assuming the following costs incurred and costs to complete information.

5. Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years assuming the following costs incurred and costs to complete information.

Ellie Mosk, CEO of X-Space Industries, decided to expand the company’s product offering beyond the core model rocket business. After investigation, she decided to set up a separate division to design and manufacture products for the drone market. Several companies were interested in having X-Space develop these drones, and financial results, to date, have been encouraging. Revenue was $4 million, gross margins have been running about 40%, and the customer sales and support costs were $1 million. However, there is a growing concern that some customers require a disproportionate share of the sales and support resources, and the true profitability of the customers is unknown. Data were collected to support an analysis of customer profitability:

Required:

1. Management felt the easiest way to allocate the sales and support costs was based on the total revenue. Using total revenue as the allocation base, determine the profitability of each of the five customers.

2. Management felt that because the data revealed some customers require a disproportionate share of sales and support resources, activity-based costing should be used to determine customer profitability. Use ABC to prepare a customer profitability analysis.

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.

Required:
1. Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years.
2-a. In the journal below, complete the necessary journal entries for the year 2018 (credit "Various accounts" for construction costs incurred).
2-b. In the journal below, complete the necessary journal entries for the year 2019 (credit "Various accounts" for construction costs incurred).
2-c. In the journal below, complete the necessary journal entries for the year 2020 (credit "Various accounts" for construction costs incurred).
3. Complete the information required below to prepare a partial balance sheet for 2018 and 2019 showing any items related to the contract.
4. Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years assuming the following costs incurred and costs to complete information.

5. Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years assuming the following costs incurred and costs to complete information.

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.

Required:
1. Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years.
2-a. In the journal below, complete the necessary journal entries for the year 2018 (credit "Various accounts" for construction costs incurred).
2-b. In the journal below, complete the necessary journal entries for the year 2019 (credit "Various accounts" for construction costs incurred).
2-c. In the journal below, complete the necessary journal entries for the year 2020 (credit "Various accounts" for construction costs incurred).
3. Complete the information required below to prepare a partial balance sheet for 2018 and 2019 showing any items related to the contract.
4. Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years assuming the following costs incurred and costs to complete information.

5. Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years assuming the following costs incurred and costs to complete information.

Please help, i am so confused.....

Problem 16-46 Solve for Master Budget Given Actual Results (LO 16-2, 4)

A new accounting intern at Gibson Corporation lost the only copy of this period's master budget. The CFO wants to evaluate performance for this period but needs the master budget to do so. Actual results for the period follow:  
  

The company planned to produce and sell 110,500 units for $6.00 each. At that volume, the contribution margin would have been $464,100. Variable marketing and administrative costs are budgeted at 10 percent of sales revenue. Manufacturing fixed costs are estimated at $2.40 per unit at the normal volume of 110,500 units. Management notes, "We budget an operating profit of $1.00 per unit at the normal volume."

Required:

a. Construct the master budget for the period. (Do not round intermediate calculations.)

b. Prepare a profit variance analysis. (Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option.)

n 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 the percentage of completion.

Required:
1. Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years.
2-a. In the journal below, complete the necessary journal entries for the year 2018 (credit "Various accounts" for construction costs incurred).
2-b. In the journal below, complete the necessary journal entries for the year 2019 (credit "Various accounts" for construction costs incurred).
2-c. In the journal below, complete the necessary journal entries for the year 2020 (credit "Various accounts" for construction costs incurred).
3. Complete the information required below to prepare a partial balance sheet for 2018 and 2019 showing any items related to the contract.
4. Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years assuming the following costs incurred and costs to complete information.

5. Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years assuming the following costs incurred and costs to complete information.

Presented below are the 2018 income statement and comparative balance sheets for Santana Industries.

Additional information for the 2018 fiscal year ($ in thousands):

Cash dividends of $2,700 were declared and paid.

Equipment costing $7,400 was purchased with cash.

Equipment with a book value of $2,200 (cost of $4,900 less accumulated depreciation of $2,700) was sold for $2,200.

Depreciation of $3,300 is included in operating expenses.

Required:
Prepare Santana Industries' 2018 statement of cash flows, using the indirect method to present cash flows from operating activities. (Amounts to be deducted should be indicated with a minus sign. Enter your answers in thousands.)
  

QUESTION 1

The following list of balances was extracted from the books of Ketumbar Enterprise as at 30 June 2019.
RM
Purchases 84,750
Sales 149,750
Return inwards    3,250
Return outwards 2,250
Drawings 4,750
Inventory (1 July 2018)    12,950
Buildings 79,750
Motor vehicles (cost RM34,750) 22,150
Fixtures and fittings (cost RM24,250) 19,350
Cash at bank 15,600
Salaries 16,550
Carriage inwards 3,150
Carriage outwards 4,300
Account receivable 29,750
Account payable      14,750
Water and electricity 3,640
Insurance 2,160
Provision for doubtful debts 500
Discount allowed 150
Discount received 100
Rent revenue 4,250
Rates 3,000
Loan from Affin Bank 24,750
Interest on loan 750
Commission revenue 250
Capital 109,400

The following additional information is available as at 30 June 2019:
a)   Rent revenue received in advance amounting to RM750.
b)   The loan from Affin Bank was taken on 1 October 2018 and the interest charged is 8% per annum.
c)   Depreciation:
Motor vehicle -20% per annum on reducing balance method.
Fixtures and fittings – 10% per annum on straight line method.
d)   Rate accrued on 30 June 2019 was RM50.
e)   Insurance expenses amounting to RM360 is for July 2019.
f)   Commission revenue of RM500 was still not received as at 30 June 2019.
g)   Provision for doubtful debts should be increased by RM750.
h)   The owner took RM1,000 cash to pay his son’s hospital bill.
i)   Inventory as at 30 June 2019 is RM19,050.
Required:
a)   Prepare Ketumbar Enterprise’s statement of profit and Loss for the year ended 30 June 2019.

b)   Prepare Ketumbar Enterprise’s statement of financial position as at 30 June 2019.
  
(Total:25 Marks)

You are hired to do some data analysis for a financial services company. There are three different Investment Plans that the company could offer to its customers. You are asked to find out if the expected revenue from marketing any one of these plans is different from the other plans. You survey 60 customers and this survey asks each customer to choose a plan they prefer and also involves other relevant questions that allow you to compute the expected revenues that the company can generate from each customer. Given the three different plans and the expected revenues, test whether each plan generates the same mean revenue. If the mean revenue generated is different depending on the marketed plan, which plan would be a better choice?      

Inv Revenue

1   4500.00
1   1100.00
1   3500.00
1   3000.00
1   2750.00
1   2800.00
1   2400.00
1   2100.00
1   5200.00
1   4250.00
1   3500.00
1   3000.00
1   2750.00
1   1600.00
1   2400.00
1   1300.00
1   5900.00
1   4500.00
1   4250.00
1   3500.00
2   4500.00
2   5000.00
2   3500.00
2   5450.00
2   6200.00
2   5750.00
2   7500.00
2   8000.00
2   8450.00
2   4500.00
2   5000.00
2   3500.00
2   5450.00
2   6200.00
2   5750.00
2   7500.00
2   8000.00
2   8450.00
2   8900.00
2   5000.00
3   6000.00
3   7000.00
3   8500.00
3   9250.00
3   9450.00
3   9900.00
3   10000.00
3   11000.00
3   5000.00
3   6000.00
3   7000.00
3   8500.00
3   9250.00
3   9450.00
3   9900.00
3   10000.00
3   11000.00
3   6500.00
3   6540.00
3   7100.00