(a)
Estimates of the marginal cost of a drug are $100 for a 100 pill bottle. If the manufacturer charged $75,000 per bottle, what is the elasticity of demand that they believe they faced?
(b)
The marginal cost is $100 / bottle. Suppose another company comes in to the market to compete with the manufacturer, what is the profit maximizing market price of the drug?
In: Economics
You are running a firm with the cost of capital of 8% and you have to choose between two projects, A and B. Project A lasts six years and project B lasts eighteen years. The initial investments are $50M for project A and $65M for project B. Project A is going to generate $15M per year and project B is going to generate 12M per year. Both projects are renewable.
Which project would you chose? (Hint: Use equivalent annual annuity or replacement chain method to answer this question.)
Question 9 options:
|
A |
|
|
B |
In: Finance
A salesman for a new manufacturer of cellular phones claims not only that they cost the retailer less but also that the percentage of defective cellular phones found among his products, ( p1), will be no higher than the percentage of defectives found in a competitor's line, ( p2 ). To test this statement, the retailer took a random sample of 135 of the salesman's cellular phones and 175 of the competitor's cellular phones. The retailer found that 14 of the salesman's cellular phones and 8 of the competitor's cellular phones were defective. Does the retailer have enough evidence to reject the salesman's claim? Use a significance level of α = 0.01 for the test. 1 of 6: State the null and alternative hypotheses for the test Step 2 of 6: Find the values of the two sample proportions, pˆ1 and pˆ2. Round your answers to three decimal places. Step 3 of 6: Compute the weighted estimate of p, ‾‾p. Round your answer to three decimal places Step 4 of 6: Compute the value of the test statistic. Round your answer to two decimal places. Step 5 of 6: Determine the decision rule for rejecting the null hypothesis H0. Round the numerical portion of your answer to two decimal places. Step 6 of 6: Make the decisi on for the hypothesis test. Reject or Fail to Reject Null Hypothesis.
In: Statistics and Probability
The monthly cost of owning a car depends on the number of kilometers it is driver. Taylor found that in May it cost her $500 to drive 800 km and it June it cost her $650 to drive 1400 km.
In: Advanced Math
Why is the return on equity greater than the return on assets if the cost of debt is less than the ROA? Why is the ROE less than the ROA if the cost of debt is greater than the ROA? Why does the ROE equal the ROA if the cost of debt is equal to the ROA?
In: Finance
As a business owner, you are faced with a number of "cost curves." Two of the most important are the marginal cost curve and the average total cost curve. How does your marginal cost affect your average total cost, and how does your ATC differ in the short and long-run?
In: Economics
Cost behavior is the term used to summarize the impact of costs that are influenced by volume. On a financial statement, these costs are identified as variable costs. Understanding the role of both fixed and variable costs in a health care organization is key to targeting profitability centers.
Assume the role of a financial consultant. You have been hired by a small non-profit hospital, struggling with profitability. You have been given full access to all financial and operational information to perform your research and analysis.
In: Finance
Overhead is 80 percent of the direct labor cost. During the month, $110,000 of direct materials were purchased. Revenues for Immaculate were $600,000, and the selling and administrative costs were $70,000.
Other information about Immaculate's inventories and production for April was as follows:
|
Ending inventories-April 30 |
|
|
Direct materials |
$ 19,000 |
|
Work in process |
? |
|
Finished goods |
105,000 |
|
Beginning inventories-April 1 |
|
|
Direct materials |
$ 22,200 |
|
Work in process |
40,000 |
|
Finished goods |
208,500 |
Required:
|
a. |
Prepare a cost of goods manufactured and cost of goods sold statements. |
|
b. |
What are the prime costs, conversion costs, and period costs? |
In: Accounting
An important application of regression analysis in accounting is in the estimation of cost. By collecting data on volume and cost and using the least squares method to develop an estimated regression equation relating volume and cost, an accountant can estimate the cost associated with a particular manufacturing volume. Consider the following sample of production volumes and total cost data for a manufacturing operation.
| Production Volume (units) | Total Cost ($) |
| 400 | 4,400 |
| 450 | 5,400 |
| 550 | 5,800 |
| 600 | 6,300 |
| 700 | 6,800 |
| 750 | 7,400 |
Compute b1 and b0 (to 1 decimal).
Complete the estimated regression equation (to 1 decimal).
y = + x
b. What is the variable cost per unit produced (to
1 decimal)?
c. Compute the coefficient of determination (to 3
decimals). Note: report r2 between 1 and 0 .
What percentage of the variation in total cost can be explained by
the production volume (to 1 decimal)?
%
d. The company's production schedule shows 500
units must be produced next month. What is the estimated total cost
for this operation (to the nearest whole number)?
In: Statistics and Probability
Statement of Cost of Goods Manufactured for a Manufacturing Company
A payment of cash (or a commitment to pay cash in the future) for the purpose of generating revenues.Cost data for Sandusky Manufacturing Company for the month ended January 31 are as follows:
| Inventories | January 1 | January 31 | ||
| Materials | $175,500 | $154,440 | ||
| Work in process | 121,100 | 106,560 | ||
| Finished goods | 91,260 | 103,470 | ||
| Direct labor | $315,900 | |
| Materials purchased during January | 336,960 | |
| Factory overhead incurred during January: | ||
| Indirect labor | 33,700 | |
| Machinery depreciation | 20,360 | |
| Heat, light, and power | 7,020 | |
| Supplies | 5,620 | |
| Property taxes | 4,910 | |
| Miscellaneous costs | 9,130 | |
a. Prepare a cost of goods manufactured statement for January.
| Sandusky Manufacturing Company | |||
| Statement of Cost of Goods Manufactured | |||
| For the Month Ended January 31 | |||
| Indirect laborMachinery depreciationSuppliesWork in process inventory, January 1 | $ | ||
| Direct materials: | |||
| Machinery depreciationMaterials inventory, January 1SuppliesWork in process inventory, January 31 | $ | ||
| Indirect laborProperty taxesPurchasesWork in process inventory, January 31 | |||
| Cost of materials available for useLess work in process inventory, January 31SuppliesWork in process inventory, January 31 | $ | ||
| Indirect laborMaterials inventory, January 31Miscellaneous costWork in process inventory, January 31 | |||
| Cost of direct materials used in productionLess work in process inventory, January 31Materials inventory, January 1Total manufacturing costs | $ | ||
| Direct laborIndirect laborMachinery depreciationSupplies | |||
| Factory overhead: | |||
| Indirect laborMaterials inventory, January 1Materials inventory, January 31Purchases | $ | ||
| Direct laborMachinery depreciationPurchasesWork in process inventory, January 31 | |||
| Direct laborHeat, light, and powerMaterials inventory, January 1Work in process inventory, January 31 | |||
| Direct laborMaterials inventory, January 1PurchasesSupplies | |||
| Materials inventory, January 31Property taxesPurchasesWork in process inventory, January 31 | |||
| Direct materialsMiscellaneous costsPurchasesWork in process inventory, January 31 | |||
| Total factory overhead | |||
| Total manufacturing costs incurred during January | |||
| Total manufacturing costs | $ | ||
| Cost of materials available for useDirect materialsMaterials inventory, January 31Work in process inventory, January 31 | |||
| Cost of goods manufactured | $ | ||
Feedback
b. Determine the The cost of finished goods available for sale minus the ending finished goods inventory.cost of goods sold for January.
In: Accounting