Ferris Company began January with 4,000 units of its principal product. The cost of each unit is $6. Merchandise transactions for the month of January are as follows:

* Includes purchase price and cost of freight.

5,000 units were on hand at the end of the month.

1. Calculate January's ending inventory and cost of goods sold for the month using FIFO, periodic system.
2. Calculate January's ending inventory and cost of goods sold for the month using LIFO, periodic system.
3. Calculate January's ending inventory and cost of goods sold for the month using FIFO, perpetual system.
4. Calculate January's ending inventory and cost of goods sold for the month using Average cost, periodic system.
5. Calculate January's ending inventory and cost of goods sold for the month using Average cost, perpetual system.

QUESTION 3 21 MARKS Beetroots (Pty) Ltd is a company that buys fresh veggies in bulk, and sells it direct to the public after packaging it in smaller quantities. The following cost data is available for six months: Month Kg Veggies Total cost January 200kg R3,800 February 500kg R8,600 March 900kg R14,300 April 350kg R5,950 May 780kg R12,800 June 800kg R13,200 The Financial Manager is of the opinion that the total cost for the month is related to the quantity of veggies that is packaged (measured in kilograms). REQUIRED: MARKS 3.1 Compile a cost formula (cost function) by making use of the High-Lowmethod. 5 3.2 Compile a cost formula (cost function) by making use of the Least Squares-method (Simple Regression Analysis). Show all calculations. 8 3.3 Explain why there is a difference between the cost formula according to the High-Low-method and the cost formula according to the Least Squares-method, and advise the best method to use. 4 3.4 Calculate the budgeted cost for July and August according to both cost formulas if the expected quantity of veggies that will be packaged is 950kg and 1,020kg respectively. 4

There are two firms, firm A and firm B. Their marginal abatement costs are MCA = 4AA and MCB = AB, where AA and AB are the tons of emissions abated by firm A and B, respectively.

a. Calculate the total cost if each firm is required to abate 50 tons of emissions.

b. Would this policy be cost effective and why?

c. What if the government set the total abatement to be 100 tons with tradable allowances, what is the total cost of this policy?

d. The policy maker knows that abatement is very costly for firm A and that they will need a large amount of allowances to cover their emissions. However, the policy maker really wants to appear fair by allocating half of the allowances to each firm at the start of the program. At the same time the policy maker doesn’t want to erode the cost effectiveness of the program given that firm A will need most of the allowances. How would you advise the policy maker and why?

e. Would a policy with a tradable emissions cap of 100 tons be socially optimal and why?

Complete the following table filling in ALL the cells. When you have finished, graph the results on the blank graph provided. Review the completed graph and answer questions 1-4.

Worksheet - Cost and Industry Structure - Monopoly

Please fill in the empty spaces ion this schedule using the data provided for the quantities, prices and costs

.

Using the Schedule above and graph below answer the following questions:

1. What is the Profit maximizing Quantity? ( )

2. What is the Profit maximizing Price? ( )

3. How much are the fixed costs? ( )

4. How much profit will the firm earn at this profit maximizing point? ( )

Consider the same firm from above but this time assume the firm is operating in the long-run, i.e. it can vary K as well. As before, the firm’s production function is q = 4K0.5L 0.5 and the wage rate is w = $8 and the rental rate of capital is r = $2.

a) What is the optimal long-run relationship between K and L?

b) If the firm is producing 24 units, how much labor will it employ?

c) How much capital will it employ?

d) What is the (long-run) cost of producing 24 units?

e) If the total cost function is linear then, using your answer from (d), what is the slope of this line and the long-run total cost function?

f) Comparing your answers to 3(f) and 2(c), why is the average total cost of producing 8 units the same in the short- and long-run? Why is the long-run ATC of producing a different quantity smaller than the short run ATC?

Thank you for your help, I appreciate it!

Answer In EXCEL

Best Plastics produces a line of cell phone covers. Its best-selling cover is the Cobra model, a
slim but very durable black plastic cover. The annual fixed cost for the Cobra model is $234,000.
This fixed cost includes management time, advertising, and other costs. In addition, the variable
cost, including labor and material costs, is $2 for each unit produced. Best Plastics sells the
Cobra for $3.50 per unit. The exact demand for next year is not known. Best Plastics wants to
analyze the possible profit against different quantities.
Define “q” as the quantity (number of units) required next year. Define TC(q) as the total cost to
manufacture q units. Define TR(q) as the total revenue from selling q units.
a. Write the algebraic equations for TC(q) and TR(q).

b. Define TP(q) as the total profit from selling q units, that is, TR(q) – TC(q). Write the
algebraic equation for TP(q).

Sandy Bank, Inc., makes one model of wooden canoe. and, the information for it follows:

Sandy Bank sells its canoes for $375 each.

Required:

1. Suppose that Sandy Bank raises its selling price to $500 per canoe. Calculate its new break-even point in units and in sales dollars.

2. If Sandy Bank sells 690 canoes, compute its margin of safety in dollars and as a percentage of sales. (Use the new sales price of $500.)

3. Calculate the number of canoes that Sandy Bank must sell at $500 each to generate $100,000 profit.

Sandy Bank, Inc., makes one model of wooden canoe. and, the information for it follows:

1. Suppose that Sandy Bank raises its selling price to $500 per canoe. Calculate its new break-even point in units and in sales dollars.

2. If Sandy Bank sells 1,570 canoes, compute its margin of safety in units and as a percentage of sales. (Use the new sales price of $500.)

3.  Calculate the number of canoes that Sandy Bank must sell at $500 each to generate $130,000 profit.

1. Supose that Sandy Bank

Jackson Inc. had the following production and cost information for its fabrication department during the month of March (materials are added at the beginning of the fabrication process):

Jackson uses the weighted average method.

Required:

1. Prepare an equivalent units schedule. Enter percentages as whole numbers (i.e. 55 not .55).

2. Calculate the total unit cost. Round all intermediate calculations and final answer to the nearest cent.

3. Calculate the cost of units transferred out and the cost of EWIP. In your computations, round unit costs to the nearest cent and use in subsequent calculations. Round your final answers to the nearest dollar.