The Cutting Department of Karachi Carpet Company provides the following data for January. Assume that all materials are added at the beginning of the process.

a. Prepare a cost of production report for the Cutting Department. If an amount is zero or a blank, enter in "0". For the cost per equivalent unit computations, round your answers to two decimal places.

b. Compute and evaluate the change in the costs per equivalent unit for direct materials and conversion from the previous month (December). If required, round your answers to two decimal places.

The Cutting Department of Tangu Carpet Company provides the following data for December 2016. Assume that all materials are added at the beginning of the process.

a. Prepare a cost of production report for the Cutting Department. If an amount is zero or a blank, enter in "0". For the cost per equivalent unit computations, round your answers to two decimal places.

b. Compute and evaluate the change in cost per equivalent unit for direct materials and conversion from the previous month (November). If required, round your answers to two decimal places.

WMEJ is an independent television station run by a major state university. The station’s broadcast hours vary during the year depending on whether the university is in session. The station’s production-crew and supervisory costs are as follows for July and September.

Required:
1. Compute the cost per broadcast hour during July and September for each of these cost items.
2. What will be the total amount incurred for each of these costs during December, when the station’s activity will be 480 broadcast hours?
3. What will be the cost per broadcast hour in December for each of the cost items?

Compute the cost per broadcast hour during July and September for each of these cost items. (Round your answers to 2 decimal places.)

2.)

What will be the total amount incurred for each of these costs during December, when the station’s activity will be 480 broadcast hours?

3.)

What will be the cost per broadcast hour in December for each of the cost items? (Round your answers to 2 decimal places.)

ABC company is considering producing a new range of smartphones that will require it to build a new factory. The project itself will go for 20 years. Feasibility studies have been done on the factory which cost $5 million. The studies have found the following:

1. The factory will cost $25 million and will have a useful life of 25 years.

2. The land where the factory will go is currently used as a carpark for workers and it is assumed that the company will have to pay $50000 per year for their workers to park in a nearby carpark.

3. The factory will be depreciated on a straight line basis and will have a salvage value of $0 but it is believed that most of it can be sold for scrap and parts after 20 years (at the end of the project) for $500000.

4. Due to the nature of the business they are in, they will have to perform some environmental tests to make sure that some of the chemicals they are using are not entering the ground water around the factory. These tests will be performed every 5 years and initially cost $625000 (in five years) and then increase at the rate of inflation which is predicted to be 2.5% per year.

5. Through the building of this factory and the selling of the phones it produces, it’s revenue will increase by $5 million in year 1 and then by 7% per year for 10 years and then decrease by 2% until the end of the project.

6. The extra costs that the company accrues per year due to the project are $400000 for labour, $45000 for overhead like power and water bills and marketing costs for the new line of phones will be $500000 per year but will decrease by 10% per year as the phone gains greater penetration. It is also predicted that labour costs will increase by 2% per year due to inflation.

7. The company’s current cost of capital is 5% per year.

8. The tax rate is 30%.

9. The project requires an initial investment in working capital of $1000000 and will be increased by 5% for the first 5 years of the project and then does not change until the end of the project. It is returned in year 20Use the above information to answer the following.

Use the above information to answer the following.

A. Calculate the free cash flows that come from this project for the 20 years it is operational.

B. Calculate the NPV, IRR & payback period of the project. Should they go ahead with the project?

C. Calculate the break-even point for the following variables:

1. The overhead.
2. The initial yearly revenue.
3. The initial labour cost.
4. The initial advertising cost.

Statement of Cost of Goods Manufactured and Income Statement for a Manufacturing Company

The following information is available for Shanika Company for 20Y6:

InventoriesJanuary 1December 31

Materials$459,660 $569,980

Work in process827,390 775,170

Finished goods795,210 792,270

Advertising expense$387,020

Depreciation expense-office equipment54,720

Depreciation expense-factory equipment73,530

Direct labor877,770

Heat, light, and power-factory29,070

Indirect labor102,600

Materials purchased860,670

Office salaries expense300,380

Property taxes-factory23,940

Property taxes-headquarters building49,590

Rent expense-factory40,470

Sales4,029,760

Sales salaries expense494,740

Supplies-factory19,950

Miscellaneous costs-factory12,540

Required:

1. Prepare the 20Y6 statement of cost of goods manufactured.

Shanika Company

Statement of Cost of Goods Manufactured

For the Year Ended December 31, 20Y6

$

Direct materials:

$

$

$

Factory overhead:

$

Total factory overhead

Total manufacturing costs incurred in 20Y6

Total manufacturing costs$

Cost of goods manufactured$

2. Prepare the 20Y6 income statement.

Shanika Company

Income Statement

For the Year Ended December 31, 20Y6

$

Cost of good sold:

$

$

$

Operating expenses:

Administrative expenses:

$

$

Selling expenses:

$

Total operating expenses

$

In this Assignment, you will define and calculate the remaining six major cost elements of a business, when given the Total Costs and the Quantity Produced, as well as to use the computed costs to determine a minimum cost output level for that business. In addition, you will compute both the break-even price and the shutdown price for a hypothetical business in a perfectly competitive market, determine if that business would incur an economic profit at various market prices, and if the business should continue to produce at each of those price levels.

Questions

Table 2.a. shows an LED light bulb manufacturer’s total cost of producing LED light bulbs.

Table 2.a.

1. What is this manufacturer’s fixed cost? Explain why. (1 point)

2. Assuming that you only know the Total Costs (TC) (as is shown in the Table 2.a. above) explain how you would calculate each of the following:

Suppose the market demand is Q=100-P. You are asked to find out how this market operates under perfect competition, monopoly and oligopoly, with the same market demand and cost structure for each firm.

1. Suppose the industry is perfectly competitive. The long-run cost function of each firm is c(Q)=2Q. Calculate the market price, total quantity supplied of the market, and each firm’s profit (in the long run).
2. Suppose there is a single firm serving the whole market, i.e. it is a monopolist. The cost function of the firm is c(Q)=2Q. Calculate the total quantity supplied of the market, the market price, and the firm’s profit. How do they compare with a)?
3. Suppose the market is under duopoly. There are two identical firms playing Cournot competition, and the cost function of each firm is c(Q)=2Q. Calculate the total quantity supplied of the market, the market price, and each firm’s profit. How do they compare with b)?
4. Suppose there are 3 identical firms playing Cournot competition, and their cost function of each firm is c(Q)=2Q. Calculate the total quantity supplied of the market, the market price, and each firm’s profit. How do they compare with c)?

Nonuniform Inputs

Apeto Company produces premium chocolate candy bars. Conversion costs are added uniformly. For February, EWIP is 30 percent complete with respect to conversion costs. Materials are added at the beginning of the process. The following information is provided for February:

Required:

1. Calculate the equivalent units for each input category.

2. Calculate the unit cost for each category and in total. If required, round your answers to the nearest cent.

3. What if a different type of materials is also added at the end of the process (a candy wrapper), costing $7,500? Calculate the new unit cost. If required, round your answer to the nearest cent.
$ per unit

4. Complete the following table and answer the accompanying questions. Note: The missing variables can be computed using the mathematical definitions. This computation is best completed in MS Excel. Copy and paste the resulting table into this Word document.

A. At what level of labor (control variable) is profit (net benefit) maximized?

Your answer:

B. What is the relation between marginal revenue and marginal cost at this level of the control variable?                       

Your answer:

C. Graph Profit, Marginal Revenue, and Marginal Cost in a single line graph. Note that marginal revenue equals marginal cost where profit is maximized.

1. Weighted average cost of capital Suppose Enviro-tech is attempting to estimate its cost of capital (WACC). The company has 1,500,000 shares of stock outstanding that currently sells for $50 per share. In addition, the company has 25,000 bonds outstanding with 10 years left until maturity that pay a $1,000 par value and an annual coupon of 5.0%. Management believes these bonds would sell for 1,010.50 in today’s market. The company’s beta is 1.1, the risk-free rate is 2% and the market risk premium is 8%. The tax rate is 25%.

a. What is the total market value of the company's stock (MVE)

b. What is the total market value of the company's bonds (MVD)?

c. What is the total market value of the firm's financial contacts (total invested capital)?

d. Estimate the percentage of the company financed with debt (w_d

e. Estimate the percentage of the company financed with equity (w_s)

f. Estimate the firm's cost of debt (r_d)

g. Estimate the firm's cost of equity (r_s) using the CAPM.

h. Compute an estimate of the firm's weighted average cost of capital (WACC)