Exercise 2-9 (Part Level Submission) Crane, Inc., has collected the following information on its cost of electricity: Machine Hours Total Electricity Costs January 500 $230 February 540 $280 March 340 $190 April 430 $200 May 640 $260 June 690 $330 July 300 $160 August 500 $250 September 220 $100 October 730 $320 November 820 $340 December 600 $300 Collapse question part (a) Correct answer. Your answer is correct. Using the high-low method, compute the variable cost of electricity per machine hour. (Round unit cost to 2 decimal places, e.g. 52.75.) Variable cost $Entry field with correct answer 0.4 per machine hour Click if you would like to Show Work for this question: Open Show Work SHOW SOLUTION LINK TO TEXT LINK TO VIDEO Attempts: 1 of 2 used Collapse question part (b) Incorrect answer. Your answer is incorrect. Try again. Compute the total fixed cost of electricity. (Round answer to 2 decimal places, e.g. 52.75.) Fixed cost $Entry field with incorrect answer 0.40 Click if you would like to Show Work for this question: Open Show Work SHOW SOLUTION LINK TO TEXT LINK TO VIDEO Attempts: 2 of 2 used Collapse question part (c) Correct answer. Your answer is correct. Represent the electricity cost function in equation form. (Round answers to 2 decimal places, e.g. 52.75.) Total cost = $Entry field with correct answer 0.4 × MH + $Entry field with correct answer 12 Click if you would like to Show Work for this question: Open Show Work SHOW SOLUTION LINK TO TEXT LINK TO VIDEO Attempts: 2 of 2 used Collapse question part (d) What is the expected electricity cost when 730 machine hours are used? (Round answer to 2 decimal places, e.g. 52.75.) Total cost $

Brass Department Store stocks toy cars. Recently, the store was given a quantity discount schedule for the cars, as shown in Table below. Thus, the normal cost for the cars is $5. For orders between 1,000 and 1,999 units, the unit cost is $4.80, and for orders of 2,000 or more units, the unit cost is $4.75. Furthermore, the ordering cost is $49 per order, the annual demand is 5,000 race cars, and the inventory carrying charge as a percentage of cost is 20%. What order quantity will minimize the total cost?

Combat Fire, Inc. manufactures steel cylinders and nozzles for two models of fire extinguishers: (1) a home fire extinguisher and (2) a commercial fire extinguisher. The home model is a high-volume (54,000 units), half-gallon cylinder that holds 2 1/2 pounds of multi-purpose dry chemical at 480 PSI. The commercial model is a low-volume (10,200 units), two-gallon cylinder that holds 10 pounds of multi-purpose dry chemical at 390 PSI. Both products require 1.5 hours of direct labor for completion. Therefore, total annual direct labor hours are 96,300 or [1.5 hours × (54,000 + 10,200)]. Estimated annual manufacturing overhead is $1,569,238. Thus, the predetermined overhead rate is $ 16.30 or ($ 1,569,238 ÷ 96,300) per direct labor hour. The direct materials cost per unit is $18.50 for the home model and $26.50 for the commercial model. The direct labor cost is $19 per unit for both the home and the commercial models.

The company’s managers identified six activity cost pools and related cost drivers and accumulated overhead by cost pool as follows.

(a)

Under traditional product costing, compute the total unit cost of each product. (Round answers to 2 decimal places, e.g. 12.50.)

2.)Under ABC, complete the schedule showing the computations of the activity-based overhead rates (per cost driver). (Round your answers to 2 decimal places, e.g. 2.25.)

3.)Complete the schedule assigning each activity's overhead cost pool to each product based on the use of cost drivers. (Use rates from part b above and round cost assigned to 0 decimal places, e.g. 12,250. Round overhead per unit to 2 decimal places, e.g. 2.25. Note that due to rounding your total cost assigned will be slightly different than calculated above.)
Cost Driver Home Model
Commercial Model
Cost Assigned

4.) Compute the total cost per unit for each product under ABC. (Round your answers to 2 decimal places, e.g. 12.25.)
Home Model $
Commercial Model $

5.)Classify each of the activities as a value-added activity or a non-value-added activity.
Activity
Receiving value-addednon-value-added
Forming non-value-addedvalue-added
Assembling value-addednon-value-added
Testing value-addednon-value-added
Painting non-value-addedvalue-added
Packing and shipping value-addednon-value-added

Combat Fire, Inc. manufactures steel cylinders and nozzles for two models of fire extinguishers: (1) a home fire extinguisher and (2) a commercial fire extinguisher. The home model is a high-volume (54,000 units), half-gallon cylinder that holds 2 1/2 pounds of multi-purpose dry chemical at 480 PSI. The commercial model is a low-volume (10,200 units), two-gallon cylinder that holds 10 pounds of multi-purpose dry chemical at 390 PSI. Both products require 1.5 hours of direct labor for completion. Therefore, total annual direct labor hours are 96,300 or [1.5 hours × (54,000 + 10,200)]. Estimated annual manufacturing overhead is $ 1,590,008. Thus, the predetermined overhead rate is $ 16.51 or ($ 1,590,008 ÷ 96,300) per direct labor hour. The direct materials cost per unit is $18.50 for the home model and $26.50 for the commercial model. The direct labor cost is $19 per unit for both the home and the commercial models.

The company’s managers identified six activity cost pools and related cost drivers and accumulated overhead by cost pool as follows.

(a)

Under traditional product costing, compute the total unit cost of each product. (Round answers to 2 decimal places, e.g. 12.50.)

2.)Under ABC, complete the schedule showing the computations of the activity-based overhead rates (per cost driver). (Round your answers to 2 decimal places, e.g. 2.25.)

3.)Complete the schedule assigning each activity's overhead cost pool to each product based on the use of cost drivers. (Use rates from part b above and round cost assigned to 0 decimal places, e.g. 12,250. Round overhead per unit to 2 decimal places, e.g. 2.25. Note that due to rounding your total cost assigned will be slightly different than calculated above.)
Cost Driver Home Model
Commercial Model
Cost Assigned

4.) Compute the total cost per unit for each product under ABC. (Round your answers to 2 decimal places, e.g. 12.25.)
Home Model $
Commercial Model $

5.)Classify each of the activities as a value-added activity or a non-value-added activity.
Activity
Receiving value-addednon-value-added
Forming non-value-addedvalue-added
Assembling value-addednon-value-added
Testing value-addednon-value-added
Painting non-value-addedvalue-added
Packing and shipping value-addednon-value-added

I just need question 2 & 3?

Weighted Average Cost Method with Perpetual Inventory

The beginning inventory at Midnight Supplies and data on purchases and sales for a three-month period ending March 31, are as follows:

Required:

1. Record the inventory, purchases, and cost of merchandise sold data in a perpetual inventory record similar to the one illustrated in Exhibit 5, using the weighted average cost method. Round unit cost to two decimal places, if necessary.

2. Determine the total sales, the total cost of merchandise sold, and the gross profit from sales for the period.

3. Determine the ending inventory cost as of March 31.
$fill in the blank 75

Case 1 airbnb, inc in 2017 mcgraw hill education connect

How would you illustrate and compare the business models for Airbnb, large hotels chains such as Marriott and Hilton, and bed & breakfast operators?

Select “true” for those statements that are accurate and choose “false” for those that are not.

1. Airbnb has a unique customer value proposition in its use of technology, shorter, more intimate stays, varying and different locales, and cheaper and unique accommodations.
     (Click to select)   True   False  
   
2. A chain hotel/motel’s customer value proposition is similar to that of Airbnb by its use of technology, unique accommodations, and varying prices.  
     (Click to select)   True   False  
   
3. A bed & breakfast’s profit formula is based on renting rooms and overall occupancy, the cost structure associated with operating brick and mortar locations, and possibly wages if it is large enough to need staff.
     (Click to select)   True   False  
   
4. Airbnb’s profit formula is based on transaction fees charged to users, the cost structure associated with developing and updating software and technology, marketing, and wages for engineers, professional management, and staff.
     (Click to select)   True   False  
   
5. A bed & breakfast is owned by a sole proprietor; their profit margin is not impacted if they do not rent rooms or have overall occupancy.
     (Click to select)   True   False  
   
6. Chain hotels/motels’ profit margin is dependent on generating sufficient revenues across multiple locations to cover fixed and variable costs globally. Profitable locations may be used to offset losses in unprofitable locations.
     (Click to select)   True   False  
   
7. Airbnb’s profit margin is contingent upon the fixed costs associated with operating hotels and bed & breakfasts.
     (Click to select)   True   False  
   
8. A bed & breakfast’s profit margin is dependent on generating revenues sufficient to cover fixed and variable costs.
     (Click to select)   True   False

Next Visit question map

Question 1 linked to 2 3 and 4of4Total

In the context of this course, you will be asked to address the issues/questions below for Marriott International, Inc. (MAR), www.marriott.com. When addressing the issues/questions, be sure to do so in the context of this course and Marriott. You have been appointed as the special assistant to the Chief Executive Officer (CEO), Arne Sorenson, who has asked you to address the following five situations:

(a) A fellow MBA alum from Lynn University, who now works in Admission at Lynn University would like to give each MBA student a benefit, which is programmed into the Lynn University ID card. This benefit would allow the student one night each month, depending on availability, for a room at the Marriott Courtyard for $40. Normally the room rate is $100 and the full cost of a night’s stay is $50. Discuss whether or not this would be feasible, i.e. Marriott is able to do this transaction without it being a donation.

(b) Marriott currently buys its ice machines from a manufacturer in China. A representative from a company in Vietnam is offering to sell them for 20% less than cost from the manufacturer in China. Discuss the issues that you would consider in deciding whether or not to accept this offer.

(c) The CEO wishes to develop an incentive plan for the hotel managers.

Before this is put into place, the CEO wishes you to make sure that budgeting

in the hotels is done correctly. He has asked you to submit a document discussing

the key points that you have learned in MBA 640. Be as thorough as possible.

(d) Marriott has only used absorption costing. The CEO has asked you

to explain the merits of using variable costing under certain circumstances.

(e) The CEO has asked you to explain how target costing/pricing would be used in

Marriott’s pricing policies.

Welfare analysis can get complicated if there are multiple market failures. “The General Theory of the Second Best,” by Lipsey and Lancaster (Review of Economic Studies 24 (1956–57): 11–32) argues that when there are multiple market failures, fixing only one market failure may make things worse than doing nothing. Two market failures may work in opposite directions; for instance, fixing one may have unintended consequences for the other. For example, consider a monopolist that pollutes. When a firm is a monopolist, it reduces its production so that it can increase price; although it sells fewer units, the higher price more than makes up for the reduced volume. Consumers lose, and total welfare is reduced, due to the higher price and lower quantity. The pollution problem, in contrast, is excess production.

a. Draw a supply-demand figure for a firm with the demand curve Q = 10 - P, and marginal cost curve MC = 2 (based on total costs C = 2 * Q). If this were not a monopoly, what would be the equilibrium price and quantity? Calculate the firm’s total revenue, total cost, and profit. Also calculate consumer surplus. Net benefits are consumer surplus plus producer surplus, which equals profit in this case; calculate that value.

b. Suppose that, instead, the firm decided to act like a monopolist and restrict output. It produces 4 units and charges $6 for each unit. Calculate the firm’s total revenue, total cost, and profit; consumer surplus; and net benefits. Are net benefits higher or lower? Is the firm better or worse off?

c. Now let’s consider the pollution problem. Suppose the firm produces marginal damages of $4/unit. For (a) and (b), recalculate net benefits to account for the social damages.

d. Find the new efficient equilibrium, now that social marginal costs are $6/unit. Calculate the firm’s total revenue, total cost (including the pollution cost), and profit; consumer surplus; and net benefits.

e. The monopolist, if forced to pay social marginal costs, will produce 2  units and charge $8 for each unit. Calculate the firm’s total revenue, total cost (including the pollution cost), and profit; consumer surplus; and net benefits.

f.Compare the results for (c), (d), and (e). Rank them from the highest net benefits to the lowest.

g. A regulator who can break up monopolies is examining this situation. Compare net benefits for the monopolist who pollutes [the recalculation for the monopolist in Part (c)] with the competitive firm that pollutes [the recalculation for the competitive firm in Part (c)]. Will the regulator improve net benefits by breaking up the monopoly?

h. A regulator who addresses pollution separately examines the situation. Compare net benefits for the monopolist who pollutes [the recalculation for the monopolist in (c)] with net benefits for the monopolist who pays the full costs of pollution in (e). Will this regulator increase net benefits by taxing pollution?

i. Does the Theory of the Second Best apply here? Does fixing a market failure always improve welfare, compared to not fixing it?

1. For 2018, X Company estimated production of 3,000 units of finished product and direct material cost of $20,550. Actual production in 2018 was 2,800 units of finished product, and actual direct material cost was $14,520.

What was the direct material static budget for 2018?

2. At the start of 2018, X Company developed the following budgeted total cost function: $8.53X + $229,700, where X is number of units produced. Budgeted production for the year was 10,800 units.

Actual total costs and actual production in 2018 were different than the budgeted amounts. The actual total cost function turned out to be $9.03X + $206,930, and actual production was 12,000 units.

What was the 2018 flexible budget variance for total fixed cost [a positive number means a favorable variance and a negative number means an unfavorable variance]?

What was the 2018 flexible budget variance for total variable costs [a positive number means a favorable variance and a negative number means an unfavorable variance]?

3. X Company started business on June 1 and prepares monthly financial statements. The following were June transactions:

1. received $44,000 from a group of investors
2. bought $8,386 of merchandise, $3,270 for cash and $5,116 on account
3. sales were $41,900, of which $37,675 were for cash and $4,225 were on account; Cost of Goods Sold was $24,302
4. paid $3,543 to suppliers for merchandise previously bought on account
5. collected $2,888 from customers on account
6. paid expenses totalling $8,506

What were total assets on June 30?

What was Net Income in June?

4.

X Company prepares monthly financial statements. The following is the company's July 1 Balance Sheet:

The following were the company's July transactions:

1. borrowed $25,000 from a bank
2. bought equipment costing $9,800, paying the manufacturer $5,400 in cash and signing a note for $4,400
3. purchased a $6,000, five-year insurance policy, paying for two years in advance

What was the balance in the Cash account on July 31 [ignore adjusting entries]?

What were total assets on July 31 [ignore adjusting entries]?

5. X Company prepares monthly financial statements. Its accountant recorded the following October 1 transactions and the appropriate adjusting entries on October 31:

1. On October 1, the company paid rent for the final three months of the year. Rent was $1,275 per month.
2. On October 1, the company purchased equipment that cost $10,000, borrowing the full amount from a bank. The equipment has a life of three years and a salvage value at that time of $1,000. The company will repay the loan on December 31, along with interest at $104 per month.

What was the effect of the accountant's entries on total assets?

What was the effect of the accountant's entries on Net Income in October?