| Output | Price | Total Cost |
| 0 | $300 | $250 |
| 1 | 275 | 260 |
| 2 | 250 | 290 |
| 3 | 225 | 350 |
| 4 | 200 | 500 |
| 5 | 175 | 680 |
Refer to the demand and cost data for a pure monopolist given in the table. If the monopolist perfectly price-discriminated and sold each unit of the product at the maximum price the buyer of that unit would be willing to pay, and if the monopolist maximized profits, then the total profit received would be
$675.
$450.
$1,125.
$325.
In: Economics
Direct materials: 0.3 metres @ $15 = $4.50
Direct labour: 0.5 hour @ $20 = $10
The following actual results were recorded for the period:
Direct materials: 3500 metres purchased and used; total cost $53,900
Direct labour: 5000 hours; total labour cost $105,000
Production = 12,000 units
Compute the materials price and usage variances, and the labour rate and
efficiency variances, for your company.
In: Accounting
|
Item |
Beginning of Year |
End of Year |
|
Raw Materials Inventory |
$15,000 |
$25,000 |
|
Work in Process Inventory |
$40,000 |
$31,000 |
|
Finished Goods Inventory |
$10,000 |
$25,000 |
|
During the Year |
||
|
Purchases of Raw Material |
$82,000 |
|
|
Direct Labor Costs |
$95,000 |
|
|
Manufacturing Overhead |
$50,000 |
Answer……………………………………..Calculations
$__________1. Direct Materials Used
________________________________
$__________2. Total Manufacturing Costs Incurred
____________________________
$__________3. Total Manufacturing Cost__________________
$__________4. Cost of Goods
Manufactured___________________________
$__________5. Cost of Goods
Sold___________________________________
In: Accounting
True/False/Uncertain
Answer each of the following statements True/False/Uncertain. Give a full explanation of your answer including graphs where appropriate. (When in doubt, always include a fully labeled graph.)
A) Average variable cost is equal to average total cost in the long-run.
B) Firms in a perfectly competitive market can earn positive profits in the short and long-run.
C) A monopolist conducting perfect price discrimination does not maximize total surplus.
In: Economics
Your company buys a piece of equipment for a cost of 225k including tires. Freight costs are 4k. Tire replacement costs 25k and lasts 4000 hours. The equipment has a total life of 10000 hours and the plan is to use it 1000 hrs per year. Fuel costs 2.35 per gallon and equipment usage is 5gal/hr. The equipment will be used for 5 years and sold for 100k. Company overhead and interest is 20%. Determine he total ownership and operating cost.
In: Accounting
The following data pertain to Dana Industries:
Interest rate on debt capital: 9%
Cost of equity capital: 12%
Before-tax operating income: P35 million
Market value of debt capital: P60 million
Market value of equity capital: P120 million
Total assets: P150 million
Income tax rate: 30%
Total current liabilities: P15 million
Required:
Compute Dana’s weighted-average cost of capital.
Compute Dana’s economic value added.
In: Accounting
The standard costs and actual costs for factory overhead for the manufacture of 2,500 units of actual production are as follows:
Standard Costs
Fixed overhead (based on 10,000 hours)3 hours per unit at $0.74 per hour
Variable overhead3 hours per unit at $1.93 per hour
Actual Costs
Total variable cost, $18,000
Total fixed cost, $8,200
The variable factory overhead controllable variance is
a.$2,820 favorable
b.$3,525 favorable
c.$3,525 unfavorable
d.$0
In: Accounting
For a newsvendor product the probability distribution of demand X (in units) is as follows:
xi 0 1 2 3 4 5 6
pi 0.05 0.1 0.2 0.3 0.2 0.1 0.05
The newsvendor orders Q = 4 units.
a) Derive the probability distributions and the cumulative distribution functions of lost sales as well as leftover inventory.
b) Knowing that the expected total cost function is convex in the order quantity Q, demonstrate that Q = 4 gives the minimal expected total cost.
In: Math
A monopolist faces a market demand curve given by P(y)=100-y. Its cost function is C(y)=y2+20.
a) Find its profit-maximizing output level and market price.
b) Calculate its total revenue, total cost and profit at that output.
c) Calculate CS, PS and DWL? d) What is the efficient amount of output?
e) Plot the graph for this monopolist indicating P(y), MR, MC, y*, p(y*), CS, PS, and DWL.
In: Economics
Cartwell Products has compiled the data shown in the following table for the current costs of its three basic sources of capital—long-term debt, preferred stock, and common stock equity—for various ranges of new financing.
|
Source of capital |
Range of new financing |
After tax cost |
|
Long term debt |
$0 to $ 320 000 $320 000 and above |
6% 8% |
|
Preferred stock |
$0 and above |
17% |
|
Common stock equity |
$0 to $ 200 000 $ 200 000 and above |
20% 24% |
The company’s capital structure weights used in calculating its weighted average cost of capital are shown in the following table.
|
Sources of capital |
Weight |
|
Long term debt |
40% |
|
Preferred stock |
20% |
|
Common stock equity |
40% |
|
Total |
100% |
a. Determine the break points and ranges of total new financing associated with each source of capital.
b. Using the data developed in part a, determine the break points (levels of total new financing) at which the firm’s weighted average cost of capital will change.
c. Calculate the weighted average cost of capital for each range of total new financing found in part b above (Hint: There are three ranges.)
d. Using the results of part c, along with the following information on the available
In: Finance