Royal Lawncare Company produces and sells two packaged products—Weedban and Greengrow. Revenue and cost information relating to the products follow:

Common fixed expenses in the company total $103,000 annually. Last year the company produced and sold 38,500 units of Weedban and 23,000 units of Greengrow.

Required:

Prepare a contribution format income statement segmented by product lines.

Royal Lawncare Company produces and sells two packaged products—Weedban and Greengrow. Revenue and cost information relating to the products follow:

Product

Weedban Greengrow

Selling price per unit $8.00 $30.00

Variable expenses per unit $2.80 $13.00

Traceable fixed expenses per year $128,000 $35,000

Last year the company produced and sold 35,500 units of Weedban and 19,500 units of Greengrow. Its annual common fixed expenses are $96,000.

Required:

Prepare a contribution format income statement segmented by product lines.

Gunst Company produces three video games: Android, Bio-Mutant, and Cyclops. Cost and revenue data pertaining to each product are as follows.

Android Bio-Mutant Cyclops

Selling price $100 $65 $125

Direct labor 48 24 60

Direct materials 9 8 16  

Variable overhead 7 4 9

At the present time, demand for each of the company's products far exceeds its capacity to produce them. Thus, management is trying to determine which of its games to concentrate on next week in filling its backlog of orders. Gunst's direct labor rate is $12 per hour, and only 1,000 hours of direct labor are available each week.

Determine the maximum total contribution margin the company can make by its best use of the 1,000 available hours. (Do not round intermediate calculations.)

Total contribution Margin ________________?

isty Company reported the following before-tax items during the current year:

Misty's effective tax rate is 40%.

What is Misty's income from continuing operations?

Multiple Choice

$290.

$370.

$174.

$390.

Royal Lawncare Company produces and sells two packaged products—Weedban and Greengrow. Revenue and cost information relating to the products follow:

Common fixed expenses in the company total $113,000 annually. Last year the company produced and sold 39,000 units of Weedban and 22,000 units of Greengrow.

Required:

Prepare a contribution format income statement segmented by product lines.

Product Line Total Company Weedban Greengrow

Sales $1,094,000 $390,000 $704,000

Variable expenses 375,70089 ________________ 286000

Traceable fixed income _____________ ______________ ______________

Contribution margin 718,300 300, 300    418,000

Traceable fixed expenses _________________ ______________________ ______________

7Product line segment margin7 718,300 $300,300 $418,000

Common fixed expenses not traceable to products __________________ ____________________ ______________

Net operating income $718,300 _____________________ __________________

Royal Lawncare Company produces and sells two packaged products—Weedban and Greengrow. Revenue and cost information relating to the products follow:

Common fixed expenses in the company total $111,000 annually. Last year the company produced and sold 39,000 units of Weedban and 17,500 units of Greengrow.

Required:

Prepare a contribution format income statement segmented by product lines.

1. Average Cost for Producing Microwaves

Let the total cost function C(x) be defined as follows.

C(x) = 0.0003x³ − 0.02x² + 103x + 3,600

Find the average cost function C.

C(x) =

Find the marginal average cost function C '.

C '(x) =

2. Marginal Revenue for Producing Loudspeakers

The management of Acrosonic plans to market the ElectroStat, an electrostatic speaker system. The marketing department has determined that the demand for these speakers is represented by the following function, where p denotes the speaker's unit price (in dollars) and x denotes the quantity demanded. Find the following functions (in dollars), find the value (in dollars) and interpret your results.

p = −0.02x + 890      (0 ≤ x ≤ 20,000)

(a)

Find the revenue function R.

R(x) =

(b)

Find the marginal revenue function R'(x).

R'(x) =

(c)

Compute the following value.

R'(8,200) =

Interpret your results.

When the level of production is  units, the production of the next speaker system will bring an additional revenue of  dollars.

3.Marginal Cost, Revenus, and Profit for Producing LCD TVs

A company manufactures a series of 20-in. flat-tube LCD televisions. The quantity x of these sets demanded each week is related to the wholesale unit price p by the following equation.

p = −0.007x + 190

The weekly total cost (in dollars) incurred by Pulsar for producing x sets is represented by the following equation. Find the following functions (in dollars) and compute the following values.

C(x) = 0.000001x³ − 0.02x² + 140x + 75,000

(a)

Find the revenue function R.

R(x) =

Find the profit function P.

P(x) =

(b)

Find the marginal cost function C'.

C'(x) =

Find the marginal revenue function R'.

R'(x) =

Find the marginal profit function P'.

P'(x) =

(c)

Compute the following values. (Round your answers to two decimal places.)

C'(1,500)=R'(1,500)=P'(1,500)=

For a monopolist:

Price is greater than marginal revenue.

Marginal revenue equals zero.

Marginal cost equals zero.

Average total cost equals marginal cost.

1. Fill in the missing data for price (P), total revenue (TR), marginal revenue (MR), total cost (TC), marginal cost (MC), profit (π), and marginal profit (Mπ) in the following table:

Graph the firm’s demand curve and marginal revenue curve.

Graph the firm’s total cost curve, total revenue curve, and total profit curve.