Questions
Explain the cost of unemployment to society.
Explain the cost of unemployment to society.
In: Economics
Variable and Fixed Cost Behavior
Munchak Company’s relevant range of production is between 9,000 and 11,000 units. Last month the company produced 10,000 units. Its total manufacturing cost per unit produced was $70. At this level of activity the company’s variable manufacturing costs are 40% of its total manufacturing costs.
Required:
Assume that next month Munchak produces 10,050 units and that its cost behavior patterns remain unchanged. Label each of the following statements as true or false with respect to next month. Do not use a calculator to answer items 1 through 6. You can use a calculator to answer items 7 through 12. Record your answers by placing an X under the appropriate heading.
In: Accounting
Cost Classifications for Decision Making
Warner Corporation purchased a machine 7 years ago for $319,000 when it launched product P50. Unfortunately, this machine has broken down and cannot be repaired. The machine could be replaced by a new model 300 machine costing $313,000 or by a new model 200 machine costing $275,000. Management has decided to buy the model 200 machine. It has less capacity than the model 300 machine, but its capacity is sufficient to continue making product P50. Management also considered, but rejected, the alternative of dropping product P50 and not replacing the old machine. If that were done, the $275,000 invested in the new machine could instead have been invested in a project that would have returned a total of $374,000.
Required:
1. What is the total differential cost regarding the decision to buy the model 200 machine rather than the model 300 machine?
2. What is the total sunk cost regarding the decision to buy the model 200 machine rather than the model 300 machine?
3. What is the total opportunity cost regarding the decision to invest in the model 200 machine?
In: Accounting
he marginal cost (MC)
a. The marginal cost (MC) is the change in the TC for a unit change in output; that is, it is the rate of change of the TC with respect to output. (Technically, it is the derivative of the TC with respect to X, the output.) Derive this function from regression (5.32).
b. The average variable cost (AVC) is the total variable cost (TVC) divided by the total output. Derive the AVC function from regression (5.32).
c. The average cost (AC) of production is the TC of production divided by total output. For the function given in regression (5.32), derive the AC function.
d. Plot the various cost curves previously derived and confirm that they resemble the stylized textbook cost curves.
For Information: Refer to the cubic total cost (TC) function given in Eq. (5.32).
In: Economics
he marginal cost (MC)
a. The marginal cost (MC) is the change in the TC for a unit change in output; that is, it is the rate of change of the TC with respect to output. (Technically, it is the derivative of the TC with respect to X, the output.) Derive this function from regression (5.32).
b. The average variable cost (AVC) is the total variable cost (TVC) divided by the total output. Derive the AVC function from regression (5.32).
c. The average cost (AC) of production is the TC of production divided by total output. For the function given in regression (5.32), derive the AC function.
d. Plot the various cost curves previously derived and confirm that they resemble the stylized textbook cost curves.
For Information: Refer to the cubic total cost (TC) function given in Eq. (5.32).
In: Economics
Cost applicable to products calculation
Below some information has been provided. Answer the required questions from the info provided.
In: Accounting
A warranty repair is an example of _______ cost.
A warranty repair is an example of _______ cost.
1. an appraisal 2. Once again, none of the answers on this list is true! 3. an external failure 4. a prevention 5. an internal failure
In: Operations Management
Parametric Analysis of Cost and Reliability
Parametric Analysis of Cost and Reliability
In: Economics
Product and Period Cost Flows
The Devon Motor Company produces automobiles. On April 1st the company had no beginning inventories and it purchased 8,000 batteries at a cost of $80 per battery. It withdrew 7,600 batteries from the storeroom during the month. Of these, 100 were used to replace batteries in cars being used by the company’s traveling sales staff. The remaining 7,500 batteries withdrawn from the storeroom were placed in cars being produced by the company. Of the cars in production during April, 90% were completed and transferred from work in process to finished goods. Of the cars completed during the month, 30% were unsold at April 30th.
Required:
1. Determine the cost of batteries that would appear in each of the following accounts on April 30th.
a. Raw Materials
b. Work in Process
c. Finished Goods
d. Cost of Goods Sold
e. Selling Expense
2. Specify whether each of the above accounts would appear on the balance sheet or on the income statement at the end of the month.
In: Accounting