In: Accounting
Identify which strategy the firm pursues under porter's generic (competitive) strategies (cost leadership, differentiation, cost focus, or differentiation focus) Explain with sufficient support, why you believe that strategy is being employed.
FIRM: Zynga, Inc.
In: Operations Management
2. Firm I has variable cost VCi = yi^2/10 and fixed cost FCi = 2000.
(1) Find total cost Ci(yi), average cost ACi, marginal cost Mci and the firm supply function Si(p)
(2) There are n=50 firms identical to firm I, facing a market demand of D(p) = 1000-250p. Find the market supply function S(p), the market equilibrium price p*, the market equilibrium quantity Y*.
(3) Given price p* you found in part b, what is the profit maximising yi* that firm i produces? How much profit does firm i make?
(4) The government introduces a tax on demand so that D'(p ) = 1000-250(p+t), where t=8. What is the new equilibrium price p? What is the new market equilibrium quantity Y'?
(5) At the new market price p', and assuming that in the short run the number of firms remains n=50, how much will firm I produce and how much will profit be?
(6) Given what you found in part e, will firms enter or exit? What is the long-run equilibrium number of firms n? What is the long run equilibrium price?
In: Advanced Math
1) Required information
Gable Company uses three activity cost pools. Each pool has a cost driver. Information for Gable Company follows:
| Activity Cost Pools | Total Cost of Pool | Cost Driver | Estimated Cost Driver | ||
| Machining | $ | 236,300 | Number of machine hours | 69,500 | |
| Designing costs | 58,725 | Number of design hours | 6,750 | ||
| Setup costs | 71,350 | Number of batches | 500 | ||
Required:
1. Compute the activity rate for each activity.
2. Classify each activity as facility, product, batch, or unit level.
2) Required information
Gable Company uses three activity cost pools. Each pool has a cost driver. Information for Gable Company follows:
| Activity Cost Pools | Total Cost of Pool | Cost Driver | Estimated Cost Driver | ||
| Machining | $ | 236,300 | Number of machine hours | 69,500 | |
| Designing costs | 58,725 | Number of design hours | 6,750 | ||
| Setup costs | 71,350 | Number of batches | 500 | ||
Suppose that Gable Company manufactures three products, A, B, and C. Information about these products follows:
| Product A | Product B | Product C | |
| Number of machine hours | 25,000 | 35,000 | 9,500 |
| Number of design hours | 2,700 | 1,550 | 2,500 |
| Number of batches | 50 | 180 | 270 |
Required:
Using activity rates, determine the amount of overhead assigned to
each product.
3) Schell Company manufactures automobile floor mats. It
currently has two product lines, the Standard and the Deluxe.
Schell has a total of $25,640 in overhead. It currently uses a
traditional cost system with overhead applied to the product on the
basis of either labor hours or machine hours. Schell has compiled
the following information about possible cost drivers and its two
product lines:
| Schell Company Total | Quantity/Amount Consumed by Standard Floor Mat Line |
Quantity/Amount Consumed by Deluxe Floor Mat Line |
||
| 1,010 labor hours | 650 labor hours | 360 labor hours | ||
| 7,170 machine hours | 3,030 machine hours | 4,140 machine hours | ||
Required:
1. Suppose Schell uses a traditional costing
system with direct labor hours as the cost driver. Determine the
amount of overhead assigned to each product line.
2. Suppose Schell uses a traditional costing
system with machine hours as the cost driver. Determine the amount
of overhead assigned to each product line.
4) Schell Company manufactures automobile floor mats. It
currently has two product lines, the Standard and the Deluxe.
Suppose that Schell has conducted further research into its
overhead and potential cost drivers. As a result, the company has
compiled the following detailed information, breaking total
overhead into three cost pools:
| Activity Cost Pools | Cost Driver | Cost Assigned to Pool |
Quantity/Amount Consumed by Standard Floor Mat Line |
Quantity/Amount Consumed by Deluxe Floor Mat Line |
|||||
| Material handling | Number of moves | $ | 2,673.00 | 31 moves | 68 moves | ||||
| Quality control | Number of inspections | $ | 9,177.00 | 680 inspections | 650 inspections | ||||
| Machine maintenance | Number of machine hours | $ | 13,032.00 | 2,920 machine hours | 4,320 machine hours | ||||
Required:
1. Calculate the activity rates for each cost pool assuming Schell uses an ABC system.
2. Calculate the amount of overhead that Schell will assign to the Standard floor mat line.
3. Determine the amount of overhead Schell will assign to the Deluxe product line.
5) Turtle Inc. has developed a new and improved widget. The company plans to sell the product through an existing website. Turtle’s marketing department believes the product will sell for $110. Turtle’s goal is a 30 percent profit margin on the widget.
Required:
1. If current prototypes cost $61.00 to produce, will Turtle meet its profit goal?
Yes
No
2. Calculate the target cost necessary for Turtle
to earn 30 percent profit.
In: Accounting
Jake’s Roof Repair has provided the following data concerning its costs:
|
Fixed Cost per Month |
Cost per Repair-Hour |
||||
| Wages and salaries | $ | 20,900 | $ | 15.00 | |
| Parts and supplies | $ | 7.10 | |||
| Equipment depreciation | $ | 2,790 | $ | 0.35 | |
| Truck operating expenses | $ | 5,710 | $ | 1.70 | |
| Rent | $ | 4,640 | |||
| Administrative expenses | $ | 3,890 | $ | 0.70 | |
For example, wages and salaries should be $20,900 plus $15.00 per repair-hour. The company expected to work 2,800 repair-hours in May, but actually worked 2,700 repair-hours. The company expects its sales to be $52.00 per repair-hour.
Required:
Compute the company’s activity variances for May. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)
In: Accounting
In: Accounting
Jake’s Roof Repair has provided the following data concerning its costs:
|
Fixed Cost per Month |
Cost per Repair-Hour |
||||
| Wages and salaries | $ | 20,900 | $ | 15.00 | |
| Parts and supplies | $ | 7.60 | |||
| Equipment depreciation | $ | 2,790 | $ | 0.55 | |
| Truck operating expenses | $ | 5,790 | $ | 1.80 | |
| Rent | $ | 4,660 | |||
| Administrative expenses | $ | 3,890 | $ | 0.70 | |
For example, wages and salaries should be $20,900 plus $15.00 per repair-hour. The company expected to work 3,000 repair-hours in May, but actually worked 2,900 repair-hours. The company expects its sales to be $48.00 per repair-hour.
Required:
Compute the company’s activity variances for May. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)
In: Accounting
Activity cost pool Machine setup Materials handling Machine depreciation Activity cost driver Number of setups Number of parts Machine hours (mh) Cost assigned to pool 260000 580000 600000 Standard product 60 setups 14000 parts 2 mh per product Custom product 40 setups 12000 parts 4mh per product the company produced 14 000 basic products and 10000 custom product. compute the activity overhead rate for each cost pool using ABC.
In: Accounting
Morton Company has two divisions. Sales, direct materials cost, direct labor cost, and manufacturing overhead data for Morton’s two divisions are available below. Note: All of Morton Company’s products are sold in competitive markets.
Missile Salt
Products Products
Sales $1,500,000 $1,000,000
Direct labor (800,000) (300,000)
Direct materials (100,000) (40,000)
Manufacturing overhead* (400,000) (150,000)
Gross profit $200,000 $510,000
*Manufacturing overhead is allocated to production based on the amount of direct labor cost. Morton has determined that its total manufacturing overhead cost of $550,000 is a mixture of batch-level costs and product line costs.
Morton has assembled the following information concerning the manufacturing overhead costs, the annual number of production batches, and the number of product lines in each division.
Total Manufacturing
Overhead Missile Salt
Costs Products Products
Batch-level overhead $250,000 10 batches 90 batches
Product line overhead 300,000 1 line 9 lines $550,000
Which ONE of the following statements is MOST CORRECT?
If the activity-based costing system had been used in the most recent year in place of the traditional overhead allocation technique, profit for the Missile Division would have decreased by $345,000.
If the activity-based costing system had been used in the most recent year in place of the traditional overhead allocation technique, profit for the Missile Division would have decreased by $25,000.
If the activity-based costing system had been used in the most recent year in place of the traditional overhead allocation technique, profit for the Missile Division would have increased by $345,000.
If the activity-based costing system had been used in the most recent year in place of the traditional overhead allocation technique, profit for the Salt Division would have decreased by $285,000.
If the activity-based costing system had been used in the most recent year in place of the traditional overhead allocation technique, profit for the Salt Division would have increased by $285,000.
If the activity-based costing system had been used in the most recent year in place of the traditional overhead allocation technique, profit for the Missile Division would have increased by $25,000.
In: Accounting
Jake’s Roof Repair has provided the following data concerning its costs:
Fixed Cost per Month Cost per Repair-Hour Wages and salaries $ 21,200 $ 16.00 Parts and supplies $ 7.60 Equipment depreciation $ 2,710 $ 0.50 Truck operating expenses $ 5,760 $ 1.70 Rent $ 4,690 Administrative expenses $ 3,850 $ 0.50 For example, wages and salaries should be $21,200 plus $16.00 per repair-hour. The company expected to work 2,600 repair-hours in May, but actually worked 2,500 repair-hours. The company expects its sales to be $48.00 per repair-hour. Required: Compute the company’s activity variances for May. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)
In: Accounting