Exercise 15-16

An analysis of the accounts of Roberts Company reveals the following manufacturing cost data for the month ended June 30, 2017.

Costs incurred: raw materials purchases $56,410, direct labor $50,600, manufacturing overhead $23,980. The specific overhead costs were: indirect labor $6,520, factory insurance $4,810, machinery depreciation $4,590, machinery repairs $2,330, factory utilities $3,910, and miscellaneous factory costs $1,820. Assume that all raw materials used were direct materials.

(a) Prepare the cost of goods manufactured schedule for the month ended June 30, 2017.

(Drop down options) Cost of Goods Manufactured, Direct Labor, Direct Materials, Direct Materials Used, Facility Insurance, Factory Utilies, Indirect Labor, Machinery Depreciation, Machinery Repairs, Manufacturing Overhead, Misc. Factory Costs, Raw Materials Inventory June 1, Raw Materials Inventory June 30, Raw Materials Purchases, Total Cost of Work in Process, Total Manufacturing Costs, Total Manufacturing Overhead, Total Raw Materials available for Use, Work in Process Inventory June 1st, Work in Process Inventory June 30, Finished Goods Inventory June 1, Finished Goods Inventory June 30

Fleurant, Inc., manufactures and sells two products: Product W2 and Product P8. Data concerning the expected production of each product and the expected total direct labor-hours (DLHs) required to produce that output appear below: Expected Production Direct Labor-Hours Per Unit Total Direct Labor-Hours Product W2 600 6 3,600 Product P8 900 4 3,600 Total direct labor-hours 7,200 The direct labor rate is $42.10 per DLH. The direct materials cost per unit is $208.60 for Product W2 and $145.30 for Product P8. The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity: Estimated Expected Activity Activity Cost Pools Activity Measures Overhead Cost Product W2 Product P8 Total Labor-related DLHs $ 223,576 3,600 3,600 7,200 Production orders orders 19,038 530 430 960 Order size MHs 333,386 3,930 3,730 7,660 $ 576,000 If the company allocates all of its overhead based on direct labor-hours using its traditional costing method, the overhead assigned to each unit of Product W2 would be closest to: Multiple Choice $261.14 per unit $186.31 per unit $480.00 per unit $118.99 per unit

The type of market structure most likely to be allocatively efficient is

pure monopoly.

monopolistic competition.

a purely price discriminating auction.

Which of the following changes will not affect the market supply or the market demand in a purely competitive industry?

a change in the number of firms

a change in the number of buyers

a change in fixed costs

a change in marginal costs

The prices of raw materials increase in a purely competitive industry. This change will result in a(n)

decrease (downward shift) in the average total cost curve for firms in the industry.

increase (rightward shift) in the short-run supply curve for firms in the industry.

increase (upward shift) in the marginal cost curve for firms in the industry.

decrease (downward shift) in the marginal revenue curve for firms in the industry.

As long as its total revenues are greater than its total costs, a firm will earn positive economic profits.

True

False

A purely competitive firm is producing at the point where its marginal cost equals the price of its product. If the firm increases its output, then total revenue will

decrease and profits will decrease.

decrease and profits will increase.

increase and profits will decrease.

increase and profits will increase.

BBB Company specializes in computer manufacturing. BBB takes many orders from multiple customers per year. For 2019, BBB estimates total manufacturing overhead costs throughout the plant to amount to $900,000. The company anticipates that total direct labor hours worked for all jobs throughout the year will amount to 40,000 hours and also predicts that total machine hours will amount to 60,000 hours. The company uses direct labor hours as its allocation base. Make sure to show all work!!!!

1. Compute the pre-determined overhead rate:

2) Use your answer from Question #1 to solve this question. During the year, BBB has worked on two jobs, which are listed as follows:

                                                            Job 101                                               Job 102

Actual DM Cost                                   $33,000                                                           $47,500

Actual DL Cost                                    $16,700                                                           $22,550

Actual Direct Labor Hours                   1,200                                                   1,900

Actual Machine Hours                            660                                                      426

Units Produced                                         40                                                        50

1. Apply overhead to Jobs 101 and 102.

2. Compute total manufacturing costs for Jobs 101 and 102.

c) Compute unit cost for Jobs 101 and 102.

8.Now suppose country A imposes a tax T on A's production of qA to curb emissions. Country B, however, is not taxed. A's cost function is now CA (qA)=46qA, while B's cost function is CB(qB)= 4qB . World demand is p=99-Q. The amount of greenhouse gas emissions per unit is still 0.5, such that total world emissions are given by 0.5Q. What are total world emissions after country A enacts a carbon tax?

This question will show how incomplete regulation can lead to "carbon leakage". Despite A reducing output (and thus emissions), total world emissions are only partially reduced, since B responds by increasing its output (and thus emissions). Estimation of carbon leakage is an active area of research in environmental economics.\

9. Consider the oil-producing countries of A, B, and C. Each has a marginal cost of zero. World demand is given by Q=674-P. Suppose the three countries form a cartel, and that none of them has an incentive to deviate from the cartel. By how many units lower is the total output of oil under the cartel relative to the Cournot solution?

Suppose there are only two firms, firm1 and firm2, in the market. They both choose
a quantity to produce simultaneously. The market price is determined by the market
demand:
p =130-(Q1+Q2)
where Q1 is the output quantity of firm1 and Q2 is the output quantity of firm2. Firm1’s
total cost of production is 10Q1 and firm2’s total cost of production is 10Q2. That is, both
firms have a constant marginal cost of 10.

Task 1. What’s firm 1’s best response function? Plot it with Firm 1’s choice on the horizontal axis and firm2’s choice on the vertical axis.

Task 2. What’s firm2’s best response function? Plot it in the figure from Task 2. Clearly
label which curve is which firm’s best response function.

Task 3. What’s the Nash equilibrium outcome? Howmuch is the profit of firm1 at the
Nash equilibrium?

Task 4. If the two firms collude and jointly decide on the total output quantity that
maximizes the joint profit, what is this total quantity? Howmuch profit does firm1 make if
each produces half of this quantity?

Suppose there are only two firms, firm1 and firm2, in the market. They both choose
a quantity to produce simultaneously. The market price is determined by the market
demand:
p =130-(Q1+Q2)
where Q1 is the output quantity of firm1 and Q2 is the output quantity of firm2. Firm1’s
total cost of production is 10Q1 and firm2’s total cost of production is 10Q2. That is, both
firms have a constant marginal cost of 10.

Task 1. What’s firm 1’s best response function? Plot it with Firm 1’s choice on the horizontal axis and firm2’s choice on the vertical axis.

Task 2. What’s firm2’s best response function? Plot it in the figure from Task 2. Clearly
label which curve is which firm’s best response function.

Task 3. What’s the Nash equilibrium outcome? Howmuch is the profit of firm1 at the
Nash equilibrium?

Task 4. If the two firms collude and jointly decide on the total output quantity that
maximizes the joint profit, what is this total quantity? Howmuch profit does firm1 make if
each produces half of this quantity?

A Hospital has a budget of 75,795,000 and must reduce expenses by 12,000,000 in the upcoming year so service lines must be eliminated.One group of board members want to prioritize lines by financial performance. (cut something ) and the second group want to maximize the number of patients served. Make two program budgets. A-Rank programs by the financial performance, what program (s) should be cut
B-Rank the programs by the cost per patient, What programs(s) should be cut to get the most patients seen

Pitt Company has the following data for 20X4 concerning its manufacturing operations. PITT COMPANY DATA FOR 20X4 SALES AND MANUFACTURING OPERATIONS Selling price per unit $ 120 Variable manufacturing cost per unit 95 Variable operating cost per unit 15 Total fixed manufacturing costs 500,000 Total fixed operating costs 100,000 The company produced 100,000 units during the year and sold 90,000 of those units. REQUIRED: Answer the following questions related to the above data, showing appropriate calculations to support your answers. (1) What is the company's total revenue for the year? (2) What is the company's full absorption cost per unit? (3) What is the company's contribution margin per unit? (4) What is the company's total gross profit for the year? (5) What is the company's net income for the year under variable costing? (6) What is the value of the company's ending inventory under variable costing? (7) What is the company's net income for the year under full absorption costing? (8) What is the value of the company's ending inventory under full absorption costing?