73.
In perfect competition, the marginal revenue curve
|
and the demand curve facing the firm are identical. |
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|
intersects the demand curve when marginal revenue is minimized. |
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|
is always above the demand curve facing the firm. |
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is always below the demand curve facing the firm. |
75.
Marginal revenue is
|
the additional profit the firm earns when it sells an additional unit of output. |
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|
the added revenue that a firm takes in from selling an additional unit of output. |
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the difference between total revenue and total costs. |
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the ratio of total revenue to quantity. |
76.
Profit-maximizing firms want to maximize the difference between
|
total revenue and total cost. |
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total revenue and marginal cost. |
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marginal revenue and marginal cost. |
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marginal revenue and average cost. |
77.
The profit maximizing behavior of a monopoly is different from that of a perfectly competitive firm in that a monopoly can
|
control the position of its demand schedule, but a competitive firm cannot. |
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only choose the desired output, while a competitive firm can control only price. |
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|
control the desired price and output to maximize profits, but a perfectly competitive firm can only choose the desired output. |
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only choose the desired price, while a competitive firm can control only output. |
In: Economics
The Sanding Department of Coronado Furniture Company has the
following production and manufacturing cost data for March 2020,
the first month of operation.
Production: 6,260 units finished and transferred out;
3,000 units started that are 100% complete as to materials and 20%
complete as to conversion costs.
Manufacturing costs: Materials $35,188; labor $21,500;
overhead $35,438.
Prepare a production cost report. (Round unit costs to
2 decimal places, e.g. 2.25 and other answers to 0 decimal places,
e.g. 125.)
|
CORONADO FURNITURE COMPANY |
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Equivalent Units |
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|
Quantities |
Physical |
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Conversion |
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Units to be accounted for |
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Work in process, March 1 |
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Started into production |
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Total units |
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Units accounted for |
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Transferred out |
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Work in process, March 31 |
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Total units |
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Costs |
|
Conversion |
|
|||||
|
Unit costs |
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|
Total Costs |
$ |
$ |
$ |
|||||
|
Equivalent units |
||||||||
|
Unit costs |
$ |
$ |
$ |
|||||
|
Costs to be accounted for |
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|
Work in process, March 1 |
$ |
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|
Started into production |
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|
Total costs |
$ |
Cost Reconciliation Schedule
Costs accounted for
Transferred out
$
Work in process, March 31
Materials
$
Conversion costs
Total costs
$
In: Accounting
Almaden Hardware Store sells two product categories, tools and
paint products. Information pertaining to its 2018 year-end
inventory is as follows:
| Inventory, by Product Category |
Quantity | Per Unit Cost |
Net Realizable Value | ||||||||
| Tools: | |||||||||||
| Hammers | 110 | $ | 5.70 | $ | 6.20 | ||||||
| Saws | 270 | 10.70 | 9.70 | ||||||||
| Screwdrivers | 370 | 2.70 | 3.30 | ||||||||
| Paint products: | |||||||||||
| 1-gallon cans | 570 | 6.70 | 5.70 | ||||||||
| Paint brushes | 110 | 4.70 | 5.20 | ||||||||
Required:
1. Determine the carrying value of inventory at
year-end, assuming the lower of cost or net realizable value
(LCNRV) rule is applied to (a) individual products, (b) product
categories, and (c) total inventory.
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2.
Assuming that the company reports an inventory write-down as a line item in the income statement, for each of the LCNRV applications determine the amount of the loss.
|
In: Accounting
10) Make a benefit/cost analysis by evaluating B/C for the following:
a) a project with initial cost = $7,254 , annual cost= $868, annual benefits= $ 1,867, disbenefits having a present worth PW value of $1,613, interest rate= 9% and life = 5 years
b) a project with initial cost = $2,126 , annual cost= $1,806, annual benefits= $ 1,434, annual disbenefits= $408, interest rate= 3% and life = 9 years.
c) a project with total annual cost= $7,744, annual benefits= $ 9,376, annual disbenefits= $614.
d)for a project with a total PW of cost of $6,439, annual benefits of $ 1,444, annual disbenefits of $482,interest rate of 7% and life of 7 years
In: Accounting
Make sure any calculations are clearly shown.
a) Complete the chart, showing manufacturing cost at various levels of production for Company X
|
Volume (units) |
10,000 |
20,000 |
30,000 |
40,000 |
|
|
Cost A |
$25,000 |
$25,000 |
$25,000 |
||
|
Cost B |
$25,000 |
$50,000 |
$100,000 |
||
|
Cost C |
$33,000 |
$48,000 |
$78,000 |
||
|
Unit cost |
$8.30 |
b) What pattern do you observe in the behavior of unit cost? Explain briefly why this occurs.
c) Develop an equation in the form of Y = a +bX to forecast total manufacturing cost. Use this equation to forecast total costs at a level of 70,000 units.
d) Identify one reason why your forecast in c) may be unreliable.
In: Accounting
What is a single-price monopoly’s total economic profit at eleven units if it makes $10 per unit profit when it produces ten units of output, where the marginal revenue of the eleventh unit is $55 and the marginal cost is $60?
| a. | $75 | b. | $85 |
|---|---|---|---|
| c. | $80 | d. | $95 |
If a single-price monopolist is currently maximizing profits, what can be concluded?
| a. | She is producing where marginal revenue equals average cost. | b. | She has reduced the difference between marginal revenue and marginal cost to zero. |
|---|---|---|---|
| c. | She is maximizing total revenue and marginal revenue. | d. | She is maximizing total revenue and minimizing total cost. |
A monopolist’s rent-seeking activity does not involve the cost of hiring _________.
| a. | corporate lawyers | b. | labor union |
|---|---|---|---|
| c. | lobbyists | d. | researchers |
Which of the following is a reason why a closed monopoly experiences high costs and inefficiency?
| a. | It sells an inferior good. | b. | It is unable to secure sufficient resources. |
|---|---|---|---|
| c. | It pays too much for labor. | d. | It has the additional costs of rent seeking. |
In: Economics
|
K-Too Everwear Corporation can manufacture mountain climbing shoes for $32.00 per pair in variable raw material costs and $22.95 per pair in variable labor expense. The shoes sell for $136 per pair. Last year, production was 160,000 pairs. Fixed costs were $1,120,000. |
| What were total production costs? (Do not round intermediate calculations. Round your answer to the nearest whole number, e.g., 32.) |
| Total production cost | $ |
|
What is the marginal cost per pair? (Do not round intermediate calculations. Round your answer to 2 decimal places, e.g., 32.16.) |
| Marginal cost per pair | $ |
|
What is the average cost per pair? (Do not round intermediate calculations. Round your answer to 2 decimal places, e.g., 32.16.) |
| Average cost per pair | $ |
|
If the company is considering a one-time order for an extra 8,000 pairs, what is the minimum acceptable total revenue from the order? (Do not round intermediate calculations. Round your answer to the nearest whole number, e.g., 32.) |
| Total revenue | $ |
In: Finance
PA6-1 Calculating Contribution Margin, Contribution Margin Ratio, Break-Even Point [LO 6-1, 6-2]
Hermosa, Inc., produces one model of mountain bike. Partial
information for the company follows:
| Number of bikes produced and sold | 510 | 800 | 970 | |||
| Total costs | ||||||
| Variable costs | $ | 126,990 | $ | ? | $ | ? |
| Fixed costs per year | ? | ? | ? | |||
| Total costs | ? | ? | ? | |||
| Cost per unit | ||||||
| Variable cost per unit | ? | ? | ? | |||
| Fixed cost per unit | ? | ? | ? | |||
| Total cost per unit | ? | $ | 533.75 | ? | ||
Required:
1. Complete the table. (Round
your "Cost per Unit" answers to 2 decimal
places.)
2. Calculate Hermosa’s contribution margin ratio
and its total contribution margin at each sales level indicated in
the table assuming the company sells each bike for $780.
(Round your percentage answers to 2 decimal places. (i.e.
.1234 should be entered as 12.34%.))
4. Calculate Hermosa’s break-even point in units
and sales revenue. (Round your answers to the nearest whole
number.)
In: Accounting
Willis Products Inc. uses the product cost concept of applying the cost-plus approach to product pricing. The costs of producing and selling 2,000 units of medical tablets are as follows:
| Variable costs per unit: | Fixed costs: | ||||||
| Direct materials | $83 | Factory overhead | $58,000 | ||||
| Direct labor | 30 | Selling and admin. exp. | 20,000 | ||||
| Factory overhead | 26 | ||||||
| Selling and admin. exp. | 21 | ||||||
| Total | $160 | ||||||
Willis Products desires a profit equal to a 25% rate of return on invested assets of $116,560.
a. Determine the total manufacturing costs for the production and sale of 2,000 units.
| Total Manufacturing Costs | |
| Variable | $ |
| Fixed factory overhead | |
| Total | $ |
Determine the cost amount per unit for the production and sale
of 2,000 units.
$ per unit
b. Determine the product cost markup percentage
per unit. Round your percentage answer to one decimal place.
%
c. Determine the selling price per unit. Use
the rounded product cost markup percentage in your calculations,
and round the amount of the markup to the nearest whole
dollar.
$ per unit
In: Accounting
The following information is for the standard and actual costs for the Happy Corporation
Standard Costs:
Budgeted units of production - 16,000 (80% of capacity)
Standard labor hours per unit - 4
Standard labor rate - $28 per hour
Standard material per unit - 9 lbs
Standard material cost - $ 14 per pound
Standard variable overhead rate - $18 per labor hour
Budgeted fixed overhead - $650,000
Fixed overhead rate is based on budgeted labor hours at 80% capacity.
Actual Cost:
Actual production - 16,500 units
Actual material purchased and used - 130,000 pounds
Actual total material cost - $1,600,000
Actual labor - 65,000 hours
Actual total labor costs - $1,700,000
Actual variable overhead - $1,000,000
Actual fixed overhead - $640,000
Actual variable overhead - $1,000,000
Determine: (a) the quantity variance, price variance, and total direct materials cost variance; (b) the time variance, rate variance, and total direct labor cost variance (c) the controllable variable overhead variance and fixed overhead volume variance
In: Accounting