Using Regression to Calculate Fixed Cost, Calculate the Variable Rate, Construct a Cost Formula, and Determine Budgeted Cost
Pizza Vesuvio makes specialty pizzas. Data for the past 8 months were collected:
| Month | Labor Cost | Employee Hours | ||
| January | $7,200 | 360 | ||
| February | 8,140 | 550 | ||
| March | 9,899 | 630 | ||
| April | 9,787 | 590 | ||
| May | 8,490 | 480 | ||
| June | 7,450 | 350 | ||
| July | 9,490 | 570 | ||
| August | 7,531 | 310 | ||
Coefficients shown by a regression program for Pizza Vesuvio's data are:
| Intercept | 4,613 |
| X Variable | 8.09 |
In your calculations, round the variable rate per employee hour to the nearest cent.
Required:
Use the results of regression to make the following calculations:
1. Calculate the fixed cost of labor.
$
Calculate the variable rate per employee hour.
$per employee hour
2. Construct the cost formula for total labor
cost.
Total labor cost = $ + ($ × Employee hours)
3. Calculate the budgeted cost for next month,
assuming that 690 employee hours are budgeted. Round answer to the
nearest dollar.
$
In: Accounting
explain the difference between a product cost and a period cost. provide atleast two examples of each.
In: Accounting
1. The cost of capital for a firm with a 60/40 debt/equity split, 2.93% cost of debt, 15% cost of equity, and a 35% tax rate would be
2. Complete the following sentence. The WACC _________________.
Group of answer choices
a. Is equal to the firm’s embedded debt cost times (1- the tax rate).
b. Is directly observable in financial markets.
c. Is the required return on any investments a firm makes that have a level of risk greater than that of present operations.
d. For a firm represents the risk and target capital structure of the firm’s existing assets as a whole.
In: Finance
The table below shows the total cost and marginal cost for Chrissy's Costumes, a perfectly competitive firm producing different quantities of children's costumes. The market price of costumes is $15.00.
Chrissy's Costs of Production
| Quantity (costumes) | Total Cost (dollars) | Marginal Cost (dollars) |
| 100 | $8.00 | $7.50 |
| 200 | 7.50 | 6.50 |
| 300 | 7.00 | 7.00 |
| 400 | 9.00 | 12.00 |
| 500 | 12.00 | 15.00 |
| 600 | 15.00 | 17.00 |
Instructions: Enter your answers as a whole number.
a. If the market price is $15.00 per costume, how many costumes should Chrissy's Costumes make?
costumes
b. If the market price for costumes falls to $12.00 per costume, how many costumes should Chrissy's Costumes make now?
costumes
In: Economics
Consider a firm that pays fixed cost F to construct a plant and variable cost C to produce goods. Let q be the quantity that this firm produces. For each case below, do the economics of scale occur for any q? (Hint: Economies of scale occur when marginal cost is less than average cost, MC < AC.)
A. F= 100, c= 10q
B. F= 12, c= 2q^2
C. F= 10, c= 100q
please explain as thoroughly as possible with step by step!!
In: Economics
1.
We know that average _______ cost is ______ when marginal cost is less than average total cost.
|
variable; rising |
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fixed; rising |
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total; falling |
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total; rising |
2.
In the short run, if a company shuts down, which of the following will happen?
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Total revenue will be zero, but total fixed costs will still have to be paid. |
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Total revenue will be zero, and total costs will be zero. |
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Total economic profit will be zero, and total costs will be positive. |
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Total revenue will be zero, but total variable costs will still have to be paid. |
3.
Output levels will maximize total economic profits in the short run in which of the following situations?
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When total costs are minimized |
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When total revenues are maximized |
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When variable costs are minimized |
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When marginal costs and marginal revenues are equalized |
4.
Which of the following is true of the industry short-run supply curve?
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It is always equal to marginal physical product. |
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It is downward sloping. |
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It is the summation of the individual firm's supply curves. |
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It is impossible to compute without knowing about the position of the marginal revenue curve. |
In: Economics
the average total cost curve and the average variable cost curve get
A.closer and closer as output increases, because the
average total cost
curve is
declining.
B.farther and farther apart as output increases, because the average variable cost curve is
rising.
C.
closer and closer as output increases, because the average fixed cost curve is declining.
D.farther and farther apart as output increases, because the
average total cost
curve is
rising.
E.closer and closer as output increases, because the average variable cost curve is
rising.
In: Economics
In: Finance
Suppose that the inverse demand function, marginal revenue, marginal cost and total cost for a gizmo product produced by a monopolist are as follows:
P = 100 - 2Q
MR = 100 - 4Q
MC = 2
TC = 10 + 2Q
a. Find the monopolist's profit-maximizing output and price.
b. calculate the monopolist's profit/losses, if any.
c. What is the Lerner Index for this industry.
In: Economics
The graph shows the marginal cost and average total cost curves for a perfectly competitive firm. The horizontal axis measures output in thousands of units per year, from 0 to 50, increasing by 10. The vertical axis measures the revenue and cost in dollars per unit, from 0 to $25, increasing by $5. The graph shows two U-shaped curves, labeled MC and ATC. The minimum point of the ATC curve corresponds to an output of 30 and a cost of 10. The minimum point of the MC curve corresponds to an output of 15 and a cost of $4.50. The MC curve starts below the ATC curve. The upward-sloping portion of the MC curve intersects the ATC curve at its minimum point. The combinations of output and cost along the MC curve are (10, 5), (20, 5), (30, 10), and (40, 20). The combinations of output and cost along the ATC curve are (10, 22), (20, 12), (30, 10), (40, 13), and (50, 24). The above figure shows a perfectly competitive firm. If the market price is $15, the firm A. is making zero economic profit. B. is incurring an economic loss. C. might shut down but more information is needed about the AVC. D. is making an economic profit. E. will immediately shut down. Please answer before 12am...it's the cut-off time
In: Economics