A monopolist faces the following cost structure for its product: TC(Q) = 6000 + 300 Q + 5 Q2 MC(Q) = 300 + 10 Q It also faces the following demand function: QD = 180 – 0.2 P Determine the following: 1. Profit-maximizing price and quantity under uniform pricing. 2. Resulting mark-up over marginal cost and profits. 3. Price and quantity that would result from forcing the monopolist to produce the level of output that maximizes total surplus instead. 4. Dead-weight loss to society (of allowing uniform pricing by the monopolist) as a proportion of monopoly profit. 5. (optional) Graph MC(Q), AC(Q), Demand Curve, MR(Q). Identify Q*, P* and shade in the area that represents Total Revenue, the one that represents Total Cost and the one that represents the dead-weight loss to society.

Sheep Books, a profit-maximizing business, is the only book supplier in a small farming village with the following consumers.

Assuming that the marginal & average total cost for each book is $12, the store's single profit maximizing price is:

Assuming that the marginal & average total cost for each book is $12. If the store offers an $8 coupon only to those customers unwilling to pay the profit maximizing price, then its combined profit from all its customers is:

Assuming that the marginal & average total cost for each book is $12. If the store owner was able to do Perfect Price discrimination, then its combined profit from all its customers is:

A Company has a total Debt of $500,000 and its Equity is $500,000. Short-term debt is 35.00% of its Total Debt and costing 8.0% while its Long-term debt is costing 6.0%. The cost of Equity is found using D1 = $2.00, Po = $20.00 while its growth is 2.0%. Find the Cost of Capital for the Company if the Corporate Tax is 45.00%.

Question 7 options:

A Company has a Cost of Capital of 25.25%, and has decided to invest into a new project costing $27,451. It expects the total cash flow to be in year 1 = $50,000, year 2 = -$5,000, year 3 = -$15,326, year 4 = $98,500 and the final year to be: -$40,000. Find the NPV of the project and decide if you should: Accept or Reject it.

Question 8 options:

A Company has a total Debt of $500,000 and its Equity is $500,000. Short-term debt is 35.00% of its Total Debt and costing 8.0% while its Long-term debt is costing 6.0%. The cost of Equity is found using D1 = $2.00, Po = $20.00 while its growth is 2.0%. Find the Cost of Capital for the Company if the Corporate Tax is 45.00%.

Question 7 options:

Question 8

A Company has a Cost of Capital of 25.25%, and has decided to invest into a new project costing $27,451. It expects the total cash flow to be in year 1 = $50,000, year 2 = -$5,000, year 3 = -$15,326, year 4 = $98,500 and the final year to be: -$40,000. Find the NPV of the project and decide if you should: Accept or Reject it.

Question 8 options:

Basic Cost-Volume-Profit Concepts

Klamath Company produces a single product. The projected income statement for the coming year is as follows:

Required:

1. Compute the unit contribution margin and the units that must be sold to break even.

2. Suppose 10,000 units are sold above breakeven. What is the operating income?
$

3. Compute the contribution margin ratio. Use the contribution margin ratio to compute the break-even point in sales revenue.

Suppose that revenues are $200,000 more than expected for the coming year. What would the total operating income be?
$

A Mechanical design company produces an innovative design Component Z100 design of producing one(1) unit of component Z100 is provided in the bill of materials BOM which requires mix shown in Table Q3-1. The current monthly production of Component Z100 is consumption shown in Table Q3-2. Determine the following;

(i) Material usage variance;

(ii) Material price variance;

(iii) Total material cost variance;

(iv) Discuss at least two(2) importance of variance analysis in a manufacturing company

Table Q3-1

Table Q3-2

1. Factory Overhead Cost Budget

   Sweet Tooth Candy Company budgeted the following costs for anticipated production for August:

   Advertising expenses	$277,360
   Manufacturing supplies	15,200
   Power and light	45,340
   Sales commissions	306,540
   Factory insurance	26,400
   Production supervisor wages	133,350
   Production control wages	34,670
   Executive officer salaries	282,690
   Materials management wages	38,130
   Factory depreciation	21,600

   Prepare a factory overhead cost budget, separating variable and fixed costs. Assume that factory insurance and depreciation are the only fixed factory costs.

   Sweet Tooth Candy Company
   Factory Overhead Cost Budget
   For the Month Ending August 31
   Variable factory overhead costs:
   	$
   Total variable factory overhead costs		$
   Fixed factory overhead costs:
   	$
   Total fixed factory overhead costs
   Total factory overhead costs		$

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Cost of Units Transferred Out and Ending Work in Process

The costs per equivalent unit of direct materials and conversion in the Rolling Department of Oak Ridge Steel Company are $2.15 and $1.60, respectively. The equivalent units to be assigned costs are as follows:

The beginning work in process inventory on July 1 had a cost of $1,150. Determine the cost of completed and transferred-out production, the ending work in process inventory, and the total costs assigned by the Rolling Department.

Factory Overhead Cost Budget

Sweet Tooth Company budgeted the following costs for anticipated production for August:

Prepare a factory overhead cost budget, separating variable and fixed costs. Assume that factory insurance and depreciation are the only fixed factory costs.

1- A carpenter purchased 50 ft of redwood and 70 ft of pine for a total cost of $259. A second purchase, at the same prices, included 80 ft of redwood and 50 ft of pine for a total cost of $340. Find the cost per foot of redwood and of pine.

2- An investment club placed $27,000 into two simple interest accounts. On one account, the annual simple interest rate is 6.5%. On the other, the annual simple interest rate is 2.5%. How much should be invested in each account so that both accounts earn the same annual interest?

3-Two investments earn an annual income of $422. One investment earns an annual simple interest rate of 8.9%, and the other investment earns an annual simple interest rate of 6.1%. The total amount invested is $6000. How much is invested in each account?