Problem 3: A firm has the following production function: ?(?1, ?2 ) = ?1 + 4?2 A)  Does this firm’s technology exhibit constant, increasing, or decreasing returns to scale? B) Suppose the firm wants to produce exactly ? units and that input 1 costs $?1 per unit and input 2 costs $?2 per unit. What are the firm’s conditional input demand functions? C) Write down the formula for the firm’s total cost function as a function of ?1, ?2, and ?. D) If ?1 = 1, ?2 = 2, what is the cost minimizing choice of ?1 and ?2 for Bob to produce 100 units of output? E) If ?1 = 1, ?2 = 2, what is the minimum cost of producing one unit of output?

Problem 4: A firm has the following production function: ?(?1, ?2 ) = ?1 1/3 ?2 4/3 A) Does this firm’s technology exhibit constant, increasing, or decreasing returns to scale? B) What is the firm’s Technical Rate of Substitution? What is the optimality condition that determines the firm’s optimal level of inputs? C) Is the marginal product of input 1 increasing, constant, or decreasing in ?1. Is the marginal product of input 2 increasing, constant, or decreasing in ?2? D) Suppose the firm wants to produce exactly ? units and that input 1 costs $?1 per unit and input 2 costs $?2 per unit. What are the firm’s conditional input demand functions? (Your solution should be functions of ?1, ?2, and ? for each input). E) Using the information from part D), write down the firm’s total cost function as a function of ?1, ?2, and ?.

Problem 5: A firm has total cost function: ?(?) = 50? 2 + 40? + 30 A) What is the total fixed cost? B) What is the average fixed cost? C) What is the total variable cost? D) What is the average variable cost? E) What is the marginal cost? F) What is the average total cost? For parts G) and H), suppose the firm is in a competitive market. G) what is the lowest price at which the firm will supply a positive quantity in long-run equilibrium? H) What price maximizes the firm’s profit? I) How much would the firm supply at the price in part H) J) At what quantity is the firm’s marginal cost equal to its average cost?

1)If fixed costs =100, variable costs = 50, and quantity equals 20, then what would the average variable cost equal?

2,3)Given the above information, what would the average total and average fixed cost be?

4)fixed costs? A)vary in the short run, B)vary with output level, C) do not vary with output level d) are the same as variable costs

5)We compute the marginal product of labor using which of the following formulas:

Group of answer choices

change in total output divided by change in labor hours

total output divided by total labor hours

6)A production function?

describes how inputs are combined to produce output.

describes how outputs are combined to make an input

has a constant slope

has a negative slope

7)We compute the marginal product of labor using which of the following formulas:

A)change in total output divided by change in labor hours

B)total output divided by total labor hours

C)change in total utility divided by change in labor hours

D)total output times total labor hours

8)A firm had sales revenue of $1 million last year. It spent $600,000 on labor, $150,000 on capital and $150,000 on materials. What was the firm’s accounting profit?

9)Which of the following is an implicit cost for a firm?

foregone interest

labor costs

rent payments

research and development spending

Periodic Inventory by Three Methods

Dymac Appliances uses the periodic inventory system. Details regarding the inventory of appliances at January 1, purchases invoices during the next 12 months, and the inventory count at December 31 are summarized as follows:

Required:

1. Determine the cost of the inventory on December 31 by the first-in, first-out method.

If the inventory of a particular model comprises one entire purchase plus a portion of another purchase acquired at a different unit cost, use a separate line for each purchase. If units are in inventory at two different costs, enter the units PURCHASED MOST RECENTLY first.

2. Determine the cost of the inventory on December 31 by the last-in, first-out method.

If the inventory of a particular model comprises one entire purchase plus a portion of another purchase acquired at a different unit cost, use a separate line for each purchase. If units are in inventory at two different costs, enter the OLDEST units first.

3. Determine the cost of the inventory on December 31 by the weighted average cost method.

4.   would be preferred for income tax purposes in periods of rising prices.

Exercise 5-11 Comprehensive Exercise; Second Production Department-Weighted-Average Method [LO5-2, LO5-3, LO5-4, LO5-5]

Scribners Corporation produces fine papers in three production departments—Pulping, Drying, and Finishing. In the Pulping Department, raw materials such as wood fiber and rag cotton are mechanically and chemically treated to separate their fibers. The result is a thick slurry of fibers. In the Drying Department, the wet fibers transferred from the Pulping Department are laid down on porous webs, pressed to remove excess liquid, and dried in ovens. In the Finishing Department, the dried paper is coated, cut, and spooled onto reels. The company uses the weighted-average method in its process costing system. Data for March for the Drying Department follow:

No materials are added in the Drying Department. Pulping cost represents the costs of the wet fibers transferred in from the Pulping Department. Wet fiber is processed in the Drying Department in batches; each unit in the above table is a batch and one batch of wet fibers produces a set amount of dried paper that is passed on to the Finishing Department.

Required:

1. Compute the Drying Department's equivalent units of production for pulping and conversion in March.

2. Compute the Drying Department's cost per equivalent unit for pulping and conversion in March.

3. Compute the Drying Department's cost of ending work in process inventory for pulping, conversion, and in total for March.

4. Compute the Drying Department's cost of units transferred out to the Finishing Department for pulping, conversion, and in total in March.

5. Prepare a cost reconciliation report for the Drying Department for March.

Required 1

Equivalent units of production => Pulping: Conversion:

Required 2

Cost per equivalent unit => Pulping: Conversion:

Required 3

Cost of ending work in process inventory=> Pulping: Conversion: Total:

Required 4

Cost of units completed and transferred out=> Pulping: Conversion: Total:

Required 5

Drying Department

Cost Reconciliation

1. Periodic Inventory by Three Methods

   Dymac Appliances uses the periodic inventory system. Details regarding the inventory of appliances at January 1, purchases invoices during the next 12 months, and the inventory count at December 31 are summarized as follows:

   Purchases Invoices
   Model	Inventory, January 1		1st		2nd		3rd		Inventory Count, December 31
   A10	__		4 at	$ 64	4 at	$ 70	4 at	$ 76	6
   B15	8 at	$ 176	4 at	158	3 at	170	6 at	184	8
   E60	3 at	75	3 at	65	15 at	68	9 at	70	5
   G83	7 at	242	6 at	250	5 at	260	10 at	259	9
   J34	12 at	240	10 at	246	16 at	267	16 at	270	15
   M90	2 at	108	2 at	110	3 at	128	3 at	130	5
   Q70	5 at	160	4 at	170	4 at	175	7 at	180	8

   Required:

   1. Determine the cost of the inventory on December 31 by the first-in, first-out method.

   If the inventory of a particular model comprises one entire purchase plus a portion of another purchase acquired at a different unit cost, use a separate line for each purchase. If units are in inventory at two different costs, enter the units PURCHASED MOST RECENTLY first.

   Dymac Appliances Cost of the Inventory-FIFO Method December 31
   Model	Quantity		Unit Cost		Total Cost
   A10		$		$
   A10
   B15
   B15
   E60
   G83
   J34
   M90
   M90
   Q70
   Q70
   Total				$

   2. Determine the cost of the inventory on December 31 by the last-in, first-out method.

   If the inventory of a particular model comprises one entire purchase plus a portion of another purchase acquired at a different unit cost, use a separate line for each purchase. If units are in inventory at two different costs, enter the OLDEST units first.

   Dymac Appliances Cost of the Inventory-LIFO Method December 31
   Model	Quantity		Unit Cost		Total Cost
   A10		$		$
   A10
   B15
   E60
   E60
   G83
   G83
   J34
   J34
   M90
   M90
   M90
   Q70
   Q70
   Total				$

   3. Determine the cost of the inventory on December 31 by the weighted average cost method.

   Dymac Appliances Cost of the Inventory-Weighted Average Method December 31
   Model	Quantity		Unit Cost		Total Cost
   A10		$		$
   B15
   E60
   G83
   J34
   M90
   Q70
   Total				$

   4.   would be preferred for income tax purposes in periods of rising prices.

1. Periodic Inventory by Three Methods

   Dymac Appliances uses the periodic inventory system. Details regarding the inventory of appliances at January 1, purchases invoices during the next 12 months, and the inventory count at December 31 are summarized as follows:

   			Purchases Invoices
   Model	Inventory, January 1		1st		2nd		3rd		Inventory Count, December 31
   A10	__		4 at	$ 64	4 at	$ 70	4 at	$ 76	6
   B15	8 at	$ 176	4 at	158	3 at	170	6 at	184	8
   E60	3 at	75	3 at	65	15 at	68	9 at	70	5
   G83	7 at	242	6 at	250	5 at	260	10 at	259	9
   J34	12 at	240	10 at	246	16 at	267	16 at	270	15
   M90	2 at	108	2 at	110	3 at	128	3 at	130	5
   Q70	5 at	160	4 at	170	4 at	175	7 at	180	8

   Required:

   1. Determine the cost of the inventory on December 31 by the first-in, first-out method.

   If the inventory of a particular model comprises one entire purchase plus a portion of another purchase acquired at a different unit cost, use a separate line for each purchase. If units are in inventory at two different costs, enter the units PURCHASED MOST RECENTLY first.

   Dymac Appliances Cost of the Inventory-FIFO Method December 31
   Model	Quantity		Unit Cost		Total Cost
   A10		$		$
   A10
   B15
   B15
   E60
   G83
   J34
   M90
   M90
   Q70
   Q70
   Total				$

   2. Determine the cost of the inventory on December 31 by the last-in, first-out method.

   If the inventory of a particular model comprises one entire purchase plus a portion of another purchase acquired at a different unit cost, use a separate line for each purchase. If units are in inventory at two different costs, enter the OLDEST units first.

   Dymac Appliances Cost of the Inventory-LIFO Method December 31
   Model	Quantity		Unit Cost		Total Cost
   A10		$		$
   A10
   B15
   E60
   E60
   G83
   G83
   J34
   J34
   M90
   M90
   M90
   Q70
   Q70
   Total				$

   3. Determine the cost of the inventory on December 31 by the weighted average cost method.

   Dymac Appliances Cost of the Inventory-Weighted Average Method December 31
   Model	Quantity		Unit Cost		Total Cost
   A10		$		$
   B15
   E60
   G83
   J34
   M90
   Q70
   Total				$

   4a. Which inventory method would be preferred for income tax purposes in periods of rising prices?

     

   4b. Which inventory method would be preferred for income tax purposes in periods of declining prices?

     

Dymac Appliances uses the periodic inventory system. Details regarding the inventory of appliances at January 1, purchases invoices during the next 12 months, and the inventory count at December 31 are summarized as follows:

Required:

1. Determine the cost of the inventory on December 31 by the first-in, first-out method.

If the inventory of a particular model comprises one entire purchase plus a portion of another purchase acquired at a different unit cost, use a separate line for each purchase. If units are in inventory at two different costs, enter the units PURCHASED MOST RECENTLY first.

2. Determine the cost of the inventory on December 31 by the last-in, first-out method.

If the inventory of a particular model comprises one entire purchase plus a portion of another purchase acquired at a different unit cost, use a separate line for each purchase. If units are in inventory at two different costs, enter the OLDEST units first.

3. Determine the cost of the inventory on December 31 by the weighted average cost method.

4a. Which inventory method would be preferred for income tax purposes in periods of rising prices?

4b. Which inventory method would be preferred for income tax purposes in periods of declining prices?

Periodic Inventory by Three Methods

Dymac Appliances uses the periodic inventory system. Details regarding the inventory of appliances at January 1, purchases invoices during the next 12 months, and the inventory count at December 31 are summarized as follows:

Required:

1. Determine the cost of the inventory on December 31 by the first-in, first-out method.

If the inventory of a particular model comprises one entire purchase plus a portion of another purchase acquired at a different unit cost, use a separate line for each purchase. If units are in inventory at two different costs, enter the units PURCHASED MOST RECENTLY first.

2. Determine the cost of the inventory on December 31 by the last-in, first-out method.

If the inventory of a particular model comprises one entire purchase plus a portion of another purchase acquired at a different unit cost, use a separate line for each purchase. If units are in inventory at two different costs, enter the OLDEST units first.

3. Determine the cost of the inventory on December 31 by the weighted average cost method.

4a. Which inventory method would be preferred for income tax purposes in periods of rising prices?

4b. Which inventory method would be preferred for income tax purposes in periods of declining prices?

THERE IS NOTHING THAT GOES ON THE RIGHT. MINOR ERROR BY ME

Periodic Inventory by Three Methods

Dymac Appliances uses the periodic inventory system. Details regarding the inventory of appliances at January 1, purchases invoices during the next 12 months, and the inventory count at December 31 are summarized as follows:

Required:

1. Determine the cost of the inventory on December 31 by the first-in, first-out method.

If the inventory of a particular model comprises one entire purchase plus a portion of another purchase acquired at a different unit cost, use a separate line for each purchase. If units are in inventory at two different costs, enter the units PURCHASED MOST RECENTLY first.

2. Determine the cost of the inventory on December 31 by the last-in, first-out method.

If the inventory of a particular model comprises one entire purchase plus a portion of another purchase acquired at a different unit cost, use a separate line for each purchase. If units are in inventory at two different costs, enter the OLDEST units first.

3. Determine the cost of the inventory on December 31 by the weighted average cost method.

4. would be preferred for income tax purposes in periods of rising prices.

Previous

Periodic Inventory by Three Methods

Dymac Appliances uses the periodic inventory system. Details regarding the inventory of appliances at January 1, purchases invoices during the next 12 months, and the inventory count at December 31 are summarized as follows:

Required:

1. Determine the cost of the inventory on December 31 by the first-in, first-out method.

If the inventory of a particular model comprises one entire purchase plus a portion of another purchase acquired at a different unit cost, use a separate line for each purchase. If units are in inventory at two different costs, enter the units PURCHASED MOST RECENTLY first.

2. Determine the cost of the inventory on December 31 by the last-in, first-out method.

If the inventory of a particular model comprises one entire purchase plus a portion of another purchase acquired at a different unit cost, use a separate line for each purchase. If units are in inventory at two different costs, enter the OLDEST units first.

3. Determine the cost of the inventory on December 31 by the weighted average cost method.

4. would be preferred for income tax purposes in periods o