If marginal cost exceeds marginal revenue, the firm
A)should reduce its average fixed cost in order to lower its marginal cost.
B)may still be earning a positive accounting profit
C)should increase the level of production to maximize its profit.
D)is most likely to be at a profit-maximizing level of output.
Who is a price taker in a competitive market?
A)both buyers and sellers
B)buyers only
C)sellers only
D)neither buyers nor sellers
For a competitive firm,
A)total cost equals marginal revenue.
B)average revenue equals marginal revenue.
C)total revenue equals average revenue.
D)total revenue equals marginal revenue
In the short-run, a firm's supply curve is equal to the
A)average total cost curve above its marginal cost curve.
B)marginal cost curve above its average total cost curve.
C)average variable cost curve above its marginal cost curve.
D)marginal cost curve above its average variable cost curve.
When marginal revenue equals marginal cost, the firm
A)Should increase the level of production to maximize its profit
B)must be generating positive economic profits
C)should cease producing
D)must be generating positive accounting profits.
Profit maximizing firms in competitive industries with free entry and exit face a price equal to the lowest possible
A)total cost of production.
B)fixed cost of production.
C)marginal cost of production.
D)average total cost of production.
At the profit-maximizing level of output,
A)marginal revenue equals average variable cost.
B)marginal revenue equals average total cost.
C)average revenue equals average total cost.
D)marginal revenue equals marginal cost.
If firms are competitive and profit maximizing, the price of a good equals the
A)fixed cost of production.
B)marginal cost of production.
C)average total cost of production.
D)total cost of production.
In: Economics
True/false. In the long-run, if price is above average fixed cost but below average total cost a firm should stay in the market.
True/false. Total cost divided by output is marginal cost.
True/false. In the long-run, firms in a competitive market earn zero profit and the market price is set such that each individual firms' average total cost is minimized.
True/false. The average fixed cost curve never increases as quantity increases.
True/false. The marginal cost curve passes through the minimum point of the AVC and ATC curves.
True/false. The money spent on four acres of land is an example of a fixed cost, whereas money spent on renting a warehouse is a variable cost.
In: Economics
Marginal cost, MC, and average total cost, ATC, become equal when MC is at its minimum point. True or False
In: Economics
A competitive constant-cost industry is made of identical firms producing q. The short run cost function of a representative firm is C(q)=1/2q2-10q +200. Market demand is given by: Qd=1500-50P.
a) For what level of q is average cost minimized?
b) What is the market equilibrium price that achieves the long-run equilibrium of zero-profit? How many units is each firm producing?
c) How many units clear the market at that price? how many firms are there in the market?
d) write an equation for the long-run supply curve for this industry.
In: Economics
The insurance cost for a large factory would be considered a: Multiple Choice unit-level cost. batch-level cost. product-level cost. facility-level cost.
In: Economics
Beth Company purchased two identical inventory items. The first purchase cost $8 and the second cost $10. The Company sold one of the items for $21. If the Company uses the LIFO cost flow method, the amount of gross margin shown on the income statement will be $______
In: Accounting
A monopolist faces the following demand curve, marginal revenue, total cost curve and marginal cost curve for its product: Q = 200 - 2P ; MR = 100 - Q ; TC = 5Q ; MC = 5
a) What level of output maximizes total revenue?. b) What is the profit maximizing level of output?. c) What is the profit maximizing price?. d) How much profit does the monopolist earn? e) Suppose that a tax of $5 for each unit produced is imposed by state government. What is the profit maximizing level of output? f) Suppose that a tax of $5 for each unit produced is imposed by state government. What is the profit maximizing price? g) Suppose that a tax of $5 for each unit produced is imposed by state government. How much profit does the monopolist earn?
In: Economics
Direct or allocation of indirect costs to cost pools
Using volume based cost drivers.
Use diagrams and schedules wherever necessary and provide examples.
The Royal Botanical Gardens has been established for more than 120 years and has the following mission statement: "The Royal Botanical Gardens belongs to the nation. Our mission is to increase knowledge and appreciation of plants, their importance and their conservation, by managing and displaying living and preserved collections and through botanical and horticultural research." Located towards the edge of the city, the gardens are visited regularly throughout the year by many local families and are an internationally well known tourist attraction. Despite charging admission, it is one of the top five visitor attractions in the country. Every year it answers many thousands of inquiries from universities and research establishments, including pharmaceutical companies from all over the world and charges for advice and access to its collection. Inquiries include requests for access to the plant collection for horticultural work, seeds for propagation or samples for chemical analysis to seek novel pharmaceutical compounds for commercial exploitation. It receives an annual grant in aid from Central Government, which is fixed once every five years. The grant is due for review in three years' time. The finance director has decided that, in order to strengthen its case when meeting the government representatives to negotiate the grant, the management board should be able to present a balanced scorecard demonstrating the performance of the gardens. He has asked you, the senior management accountant, to help him. Many members of the board, which consists of eminent scientists, are unfamiliar with the concept of a balanced scorecard.
Required:
Strategic Map
Suitable balanced scorecard for the Royal Botanical Gardens and give examples of measures that would be incorporated within it. Marks
In: Accounting
| Assume that a radiologist group practice has the following cost structure: | ||||||
| Fixed costs | $500,000 | |||||
| Variable cost per procedure | 25 | |||||
| Charge (revenue) per procedure | 100 | |||||
| Furthermore, assume that the group expects to perform 7,500 proce- | ||||||
| dures in the coming year. | ||||||
| a. Construct the group’s base case projected P&L statement. | ||||||
| b. part 1 - What is the group’s contribution margin? b. - part 2 - What is its breakeven point? | ||||||
| c. part 1 - What volume is required to provide a pretax profit of $100,000? | ||||||
| c - part 2 - A pretax profit of $200,000? | ||||||
In: Finance
Massey Corporation uses a process cost system and the weighted-average cost flow assumption. Production begins in the Fabricating Department where materials are added at the beginning of the process and conversion costs are incurred uniformly throughout the process. On March 1, the beginning work in process inventory consisted of 20,000 units which were 60% complete and had a cost of $175,000, $145,000 of which were materials costs. During March, the following occurred: Materials added $305,000 Conversion costs incurred $120,000 Units completed and transferred out in March 50,000 Units in ending work in process March 31 (40% complete) 25,000 Calculate the unit cost:
In: Accounting