A consumer's preferences for food (x) and clothes (y) are represented by the utility function u(x,y)= x + 2 ln(y). The prices of food and clothes are p_x and p_y euros/unit, respectively, and the consumer's income is I euros.

A. (10 points) Describe the consumer's problem, including her budget constraints, and calculate her ordinary demand functions, x(p_x,p_y,I) and y(p_x,p_y,I).

B. (10 points) For prices and income (p_x,p_y,I)=(1,1,3), calculate the substitution and income effects over the demand of y of a 1 euro/unit sale tax on this good. Calculate also the tax revenue.

C. (10 points) Calculate the equivalent variation of the tax in part B and verify that it is greater the tax revenue.

You are asked to assist the National Zoo in determining entry ticket prices. Assume that there are two different demand curves for a zoo visit. The first demand curve is for visitors aged 12 to 64, while the second demand curve is for children and the elderly. Both the demand and the marginal revenue curve are as follows:

PA = 9.6 - 0.08QA
MRA = 9.6 - 0.16QA
PCS = 4 - 0.05QCS
MRCS = 4 - 0.10QCS
PA is adult price, PCS is child and senior citizen, QA adult visitor demand and QCS = Child and senior visitor demand quantity. Marginal costs are assumed to be zero if the National Zoo decides to discriminate on ticket prices:

1) Calculate the revenue and profitability of each sub-market. 
2) State whether the price discrimination strategy benefits the National Zoo. 

Problem-6. The adjusted trial balance of Cooper Co. as of December 31, 2007, contains the following.

Instructions:

Prepare an Income Statement, Statement of Retained Earnings and Balance Sheet after taking the following adjustments.

1. Unpaid salaries SR 2,160
2. Accrued service revenue SR 3, 410
3. Prepaid rent SR 260

Question For Managerial accounting class: All the information is below

1. A is a retail company that sells shoes. Data concerning the company’s monthly revenues and costs appear below (Q  refers to the number of pairs of shoes sold):

1. Prepare the company’s planning budget assuming that 30,000 pairs of shoes are expected to be sold. (1pt)

2. Assume that 25,000 pairs of shoes were actually sold. Prepare a flexible budget for this level of activity. (1pt)  

3. The actual results appear below. Prepare a performance report for the company.(1pt)

Terracotta Incorporated reported the following accounts and amounts (in millions) in its financial statements for the year ended December 2, 2016.

Prepare a classified balance sheet. The Allowance for Doubtful Accounts relates entirely to Accounts Receivable. (Enter your answers in millions (i.e., 10,000,000 should be entered as 10).)

True/False

- The quick ratio is a measure of sales performace.(T/F)

- It is best to reduce cash holdings when attempting to increase the valuation of a company. (T/F)

- A repeat customer usually deserves credit terms considerations. (T/F)

- International customers usually are more reliable payers and should receive better credit terms. (T/F)

- The credit decision can assist in increasing sales revenue. (T/F)

- Reducing DPO is a source of cash for a company. (T/F)

- CCE(cash conversion effectiveness) measures the effectiveness of turning sales revenue into cash.(T/F)

- JIT has proven to be ineffective in most industries. (T/F)

- A new cash cycle begins when the cash is received from a customer's payment. (T/F)

Short essay question:

Using your readings, including "Drug Goes From $13.50 a Tablet to $750, Overnight,”:

a. How would you describe the price elasticity of demand for Daraprim? What barrier to entry into the Daraprim market does Turing Pharm use to maintain its monopoly market position and keep other firms from entering into the Daraprim market?

b. For practically any other business that chooses to raise its price by 50 times, the business would surely lose most if not all of its customers. Why is Turing still in business? (Elasticity of demand for Daraprim and total revenue relationship is key here.)

c. Describe how the elasticity of Daraprim would change if there were generic versions of the drug offered by other companies and how would total revenue be affected accordingly?

a)Analyze the major pros and cons of preparing annual company budgets. Identify at least two (2) critical budget line items that you believe are essential for managing your company. Provide a rationale for your response.

b)One way to monitor a company is to break it into different centers or business units. For example, a Revenue Center oversees the sales teams while the Cost Center focuses on making the product or delivering the services. If the company maintains a store or locations that handles both revenue and costs, this is called a Profit Center. Managers of each center have their own budgets and are held accountable for achieving it. Analyze the most common responsibility reporting systems. From your analysis, argue at least one (1) pro and one (1) con of using responsibility reporting systems.

The following items are taken from the financial statements of SGB Company for 2013:

Instructions:

(1) Create a classified balance sheet in good form for the year ended 2013.

(2) Calculate the current ratio and debt ratio and explain your findings.

Zachary Trust Corporation has two service departments: actuary and economic analysis. Zachary also has three operating departments: annuity, fund management, and employee benefit services. The annual costs of operating the service departments are $668,200 for actuary and $1,002,300 for economic analysis. Zachary uses the direct method to allocate service center costs to operating departments. Other relevant data follow.

*The operating costs are measured before allocating service center costs.

Required

1. Use operating costs as the cost driver for allocating service center costs to operating departments.

2. Use revenue as the cost driver for allocating service center costs to operating departments.