USF manufactures and sells desktop organizing systems. There are three global locations:

China – responsible for the internally manufactured mechanical components of the systems. These are mostly made from standardized pieces of metal and wood sourced locally. The workers are non-union and there is typically a high volume of turnover in any given year.

Variable Costs = 1,000 yuan

Fixed Costs = 1,800 yuan

Market Price for components = 3,600 yuan

Tax rate = 20%

8 yuan = $1 CDN

South Korea – responsible for assembling sub-component pieces that include the internally generated mechanical components (highly technical and made with custom machinery) as well as outsourced mechanical components that come from various suppliers around the world. The workers are non-union and there is very little turnover in any given year.

Variable Costs = 360,000 won

Fixed Costs = 480,000 won

Market Price for assemble pieces = 1,560,000 won

Tax rate = 20%

1,200 won = $1 CDN

Canada – responsible for packaging and distributing to North American markets. The workers are unionized and have had a history of voting to strike when ratifying contracts.

Variable Costs = $100

Fixed Costs = $200

Selling Price = $3,200

Tax rate = 30%

Discuss the difference between transfers made at market price versus transfer prices designed to maximize profits. Show calculations for the profit maximizing scenario.

Include other factors that should be considered if looking to maximize profits.

GEM Limited has a single product Flicks. The company normally produces and sells 80,000 units of Flicks each year at a price of $240 per unit. The company’s unit costs at this level of activity are as follow: Direct material Direct labour Variable manufacturing overhead Fixed manufacturing overhead Variable selling and administrative costs Fixed selling and administrative costs Total unit cost $57.00 60.00 16.80 30.00 10.20 27.00 $201.00 GEM has sufficient capacity to produce 100 000 units of Flicks a year without any increase in fixed manufacturing overhead. Required: (a) GEM has an opportunity to sell 10 000 units to an overseas customer. Import duties and other special costs associated with this order would total $42 000. The only selling costs that would be associated with the order would be a shipping cost of $9.00 per unit. What would be the minimum acceptable unit price for GEM to consider this order? (hint: GEM would not accept the order if it would reduce the company’s profit) (b) The company has 200 units of Flicks on hand that were produced two months ago. Due to blemishes on the units, it will be impossible to sell these units at the normal price. If the company wishes to sell them through regular sales channels, what would be the relevant cost for setting the minimum price? Explain. (c) “All future costs are relevant in decision making.” Do you agree?

The ESPL (E-Sports Professional League) is a new business venture that is being loosely organized by over 60 potential teams of players. The plan is to operate weekly competitions in smaller venues that can seat up to 500 spectators. New teams can enter and exit the league at very low cost. You have been hired to act as an economic consultant to the new league.

a. Based on market research, you have estimated that the industry demand for tickets every week is given by the equation P = 100 – 0.001Q, where P is the league standard ticket price and Q is the total number of tickets sold in the league each week. You have also estimated, based on estimates of team costs, that the weekly industry ticket supply is given by the equation P = 2 + 0.0005Q. Based on your research, compute the league standard ticket price and quantity of tickets sold each week.

b. One particular team, Team Green, faces weekly total costs given by the equation C = 1000 + Q + 0.05Q2. What will be the profit-maximizing number of tickets for this team to sell each week? Show your work. Compute the weekly profit. What is the level of fixed costs?

c. Due to positive profits, new teams enter the league, forcing down the league standard ticket price. How low can the ticket price go for Team Green for it to remain in operation? Show your work.

Consider a hypothetical futures contract in which the current price is $82. The initial margin requirement is $5, and the maintenance margin requirement is $2. You go long 20 contracts and meet all margin calls but do not withdraw any excess margin.

The settlement price and the spot price of the underlying from day 0 to day 6 look like the following:

(1)  Suppose you receive margin call in the end of each day. You need to put up additional fund into your account the next day whenever the previous day your account is equal and less than maintenance margin. The first day that you will receive margin call should be Day .

(2) The total amount that you are going to put in your account, from day 0 to day 6, will be

(3) The total loss and profit from Day 0 to Day 6, if the long holder always stays in the market, should be  

(4) The ending balance in Day 3 should be

Walton Company is considering adding a new product. The cost accountant has provided the following data:

The administrative vice president has provided the following estimates:

The manager has decided that any new product must at least break even in the first year.

Required

Use the equation method and consider each requirement separately.

A. If the sales price is set at $67, how many units must Walton sell to break even?

B. Walton estimates that sales will probably be 12,000 units. What sales price per unit will allow the company to break even?

C. Walton has decided to advertise the product heavily and has set the sales price at $72. If sales are 10,000 units, how much can the company spend on advertising and still break even?

Please help obtaining the below:

A. Number of Units

​B. Sales Price (per unit)

​C. Advertising Cost

Consider a hypothetical futures contract in which the current price is $82. The initial margin requirement is $5, and the maintenance margin requirement is $2. You go long 20 contracts and meet all margin calls but do not withdraw any excess margin.

The settlement price and the spot price of the underlying from day 0 to day 6 look like the following:

(1)  Suppose you receive margin call in the end of each day. You need to put up additional fund into your account the next day whenever the previous day your account is equal and less than maintenance margin. The first day that you will receive margin call should be Day .

(2) The total amount that you are going to put in your account, from day 0 to day 6, will be

(3) The total loss and profit from Day 0 to Day 6, if the long holder always stays in the market, should be  

(4) The ending balance in Day 3 should be

2.   Copy and paste the following data into Excel:

a.   Run OLS to determine the demand function as P = f(Q); how much confidence do you have in this estimated equation? Use algebra to invert the demand function to Q = f(P).

b.   Using calculus to determine dQ/dP, construct a column which calculates the point-price elasticity for each (P,Q) combination.

c. What is the point price elasticity of demand when P=$15.25? What is the point price elasticity of demand when P=$14.10?

d.   To maximize total revenue, what would you recommend if the company was currently charging P=$14.79? If it was charging P=$14.10?

e.   Use your first demand function to determine an equation for TR and MR as a function of Q, and create a graph of P and MR on the vertical and Q on the horizontal axis.

f.    What is the total-revenue maximizing price and quantity, and how much revenue is earned there? Compare that to the TR when P = $15.25 and P = $14.10.

Copy and paste the following data into Excel:

a.   Run OLS to determine the demand function as P = f(Q); how much confidence do you have in this estimated equation? Use algebra to invert the demand function to Q = f(P).

b.   Using calculus to determine dQ/dP, construct a column which calculates the point-price elasticity for each (P,Q) combination.

c.   What is the point price elasticity of demand when P=$87.50? What is the point price elasticity of demand when P=$77.50?

d.   To maximize total revenue, what would you recommend if the company was currently charging P=$82.25? If it was charging P=$77.50?

e.   Use your first demand function to determine an equation for TR and MR as a function of Q, and create a graph of P and MR on the vertical and Q on the horizontal axis.

f.    What is the total-revenue maximizing price and quantity, and how much revenue is earned there? Compare that to the TR when P = $87.50 and P = $77.50.

Python: Write a program to simulate the purchases in a grocery store. A customer may buy any number of items. So, you should use a while loop. Your program should read an item first and then read the price until you enter a terminal value (‘done’) to end the loop. You should add all the prices inside the loop. Add then a sales tax of 8.75% to the total price. Print a receipt to indicate all the details of the purchase. All numbers must be appropriately formatted. For example, when the program starts, it shall prompt user to enter line item, say “enter an item or end the program by entering ‘done’ >> “. After user enters the item, say “book”, the program shall prompt user enter price, say “please enter the price you pay, without dollar sign, just a number >> ‘. Then the program repeats the process until user prompts ‘done’. Students may get partial credits if they draw problem solving strategy and pseudo-code when they could not get their program run successfully. When the program run successfully, there is no need to do that.

2. Copy and paste the following data into Excel:

a. Run OLS to determine the demand function as P = f(Q); how much confidence do you have in this estimated equation? Use algebra to invert the demand function to Q = f(P). b. Using calculus to determine dQ/dP, construct a column which calculates the point-price elasticity for each (P,Q) combination. c. What is the point price elasticity of demand when P=$140.25? What is the point price elasticity of demand when P=$135.50? d. To maximize total revenue, what would you recommend if the company was currently charging P=$122.04? If it was charging P=$135.50? e. Use your first demand function to determine an equation for TR and MR as a function of Q, and create a graph of P and MR on the vertical and Q on the horizontal axis. f. What is the total-revenue maximizing price and quantity, and how much revenue is earned there? (Round your price to the nearest cent, your quantity to the nearest whole unit, and your TR to the nearest dollar.) Compare that to the TR when P = $140.25 and P = $135.50.