1. Inferior,
2. Normal,
3. Complements, or
4. Substitutes

(Please Include The Negative signs in your answers where appropriate)

A. The price of gasoline increases from 12 per barrel to 28 per barrel and as a result, the demand per month for new cars changes from 600 to 200.

Part 1: The elasticity is


Part 2: These goods are (answer using numbers, 1-4)

B. As a result of a change in income from 1,275 to 1,875 per month, the consumption of good X changes from 380 to 200 units.


Part 3: The elasticity is



Part 4: Good X is a(an) (answer using numbers, 1-4)


C. As a result of a decrease in the price of good Y from 39 to 19 the demand for good X changes from 150 to 350 units.


Part 5: The elasticity is



Part 6: These goods are(answer using numbers, 1-4)


D. As a result of an economic boom in Calgary, the average income increases from 2,800 to 4,200 per month and as a result the demand for new houses increases from 160 to 260 units.


Part 7: The elasticity is



Part 8: New houses are a(an) (answer using numbers, 1-4)

ABC Co makes product X by mixing together two ingredients, A and B. The standard cost card for one unit of X is as follows:

The budgeted output for the March was 60 units. After one month of production, 50 units of X were produced from 110 kg of A and 225 kg of B.

1)Calculate the material mix variance

2)Calculate the materials usage variance.

3)Calculate the material yield variance

4)Which of the following factors would result in an adverse material usage variance in ABC Co?

(1) Using an inferior quality of material A or B

(2) Making changes to the production process

(3) Introducing increased quality controls resulting in more items of Product X being rejected.

5)

Which of the following factors would result in a material mix variance in ABC Co?

An inferior quality of material A or B is used

The cost of materials A or B changes

The selling price of Product X changes

The production manager in Ash Co deviates from the standard mix

In 1968, the average price of a new house in the United States was $25,300. Today, this price is about $350,000. Because today’s average price is about 13.8 times greater than the 1968 price, the price compari-sons that media commentators typically have undertaken would imply that the prices of new houses have increased by that multiple over the past five decades.

By and large, however, media fail to adjust their price comparisons for the effects of changes in the GDP deflator. After using the GDP defla-tor, which currently is based on values of goods and services expressed in 2009, the inflation-adjusted price of a new house in 1968 was $115,000. The current inflation-adjusted price of a new house is about $308,000, which is about 2.7 times greater than the inflation-adjusted price in 1968. Thus, the increase in the price of a new home in the United States during the past 50 years has been substantially smaller than implied by new-home price comparisons undertaken in media reports.

If claims that media commentators prefer to report the largest possible, attention-grabbing changes in numbers are correct, why might they pre-fer to report economic data that have not been adjusted for changes in the price level?

Calculating the Direct Materials Price Variance and the Direct Materials Usage Variance

9.1: Guillermo has found a typical oil change takes 24 minutes and 6.2 quarts of oil are used. In June, Guillermo had 980 oil changes.

Refer to Exercise 9.1. Guillermo's Oil and Lube Company provided the following information for the production of oil changes during the month of June:

Actual number of oil changes performed: 980

Actual number of quarts of oil used: 6020 quarts

Actual price paid per quart of oil: $5.1

Standard price per quart of oil: $5.05

Required:

1. Calculate the direct materials price variance (MPV) and the direct materials usage variance (MUV) for June using the formula approach.

2. Calculate the direct materials price variance (MPV) and the direct materials usage variance (MUV) for June using the graphical approach.

3. Calculate the total direct materials variance for oil for June.

4. What if the actual number of quarts of oil purchased in June had been 6100 quarts, and the materials price variance was calculated at the time of purchase? What would be the materials price variance (MPV)? The materials usage variance (MUV)?

Victoria Company reports the following operating results for the month of April.

Management is considering the following course of action to increase net income: Reduce the selling price by 6%, with no changes to unit variable costs or fixed costs. Management is confident that this change will increase unit sales by 20%.

Using the contribution margin technique, compute the break-even point in units and dollars and margin of safety in dollars: (Round intermediate calculations to 4 decimal places e.g. 0.2522 and final answer to 0 decimal places, e.g. 2,510.)

(a) Assuming no changes to selling price or costs.

(b1) Assuming changes to sales price and volume as described above.

Qwik Repairs has over 200 auto-maintenance service outlets nationwide. It provides primarily two lines of service: oil changes and brake repair. Oil change-related services represent 62% of its sales and provide a contribution margin ratio of 22%. Brake repair represents 38% of its sales and provides a 61% contribution margin ratio. The company's fixed costs are $15,050,000 (that is $75,250 per service outlet).

Calculate the dollar amount of each type of service that the company must provide in order to break even (use weighted average contribution margin ratio rounded to 3 decimal places and round final answers to 0 decimal places. For Oil Changes & For Brake Repair - Please show calulations and answers

The company has a desired net income of 61,577 per service outlet. What is the dollar amount of each type of service that must be provided by each service outlet to meet its target net income per outlet? (use weighted average contribution margin ratio rounded to 3 decimal places and round final answers to 0 decimal places. For oil changes & For Brake Repair - Please show calculations and answers.

2 . Problems 22-5

Consider the effects of inflation in an economy composed of only two people: Van, a bean farmer, and Amy, a rice farmer. Van and Amy both always consume equal amounts of rice and beans. In 2016 the price of beans was $5, and the price of rice was $3.

Suppose that in 2017 the price of beans was $10 and the price of rice was $6.

Inflation was ________%

.

Indicate whether Van and Amy were better off, worse off, or unaffected by the changes in prices.

Now suppose that in 2017 the price of beans was $7.50 and the price of rice was $6.

In this case, inflation was ______%

.

Indicate whether Van and Amy were better off, worse off, or unaffected by the changes in prices.

Now suppose that in 2017, the price of beans was $1.50 and the price of rice was $6.

In this case, inflation was ______%

.

Indicate whether Van and Amy were better off, worse off, or unaffected by the changes in prices.

What matters more to Van and Amy?

O The relative price of rice and beans

O The overall inflation rate

Consider two 30-year maturity bonds. Bond A has a coupon rate of 4%, while bond B has a coupon rate of 12%. Both bonds pay their coupons semiannually.

a. Compute the prices of the two bonds at each interest rate. (Round the bond price to 2 decimal places.)

b. Suppose Bond A is currently priced to offer a yield to maturity of 8%. Calculate the (percentage) capital gain or loss on the bond if its yield immediately changes to each value of yield to maturity. (Enter your answers as a percent rounded to the nearest whole percent.)

c. Suppose Bond B is currently priced to offer a yield to maturity of 8%. Calculate the (percentage) capital gain or loss on the bond if its yield immediately changes to each value of yield to maturity. (Enter your answers as a percent rounded to the nearest whole percent.)

d. Which bond’s price exhibits greater proportional sensitivity to changes in its yield? In other words, which bond has greater interest rate risk?

e. Which bond pays a high coupon rate has lower “average” or “effective” maturity than a bond that pays a low coupon rate?