16. A firm with total costs of $1,400,000 and sales of $2,000,000 merges with a smaller firm with total costs of $700,000 and sales of $1,200,000 million. Calculate the difference in average cost of production expressed in percent. A. 4.38 percent B. 15 percent C. 9 percent D. 6.72 percent

The production supervisor of the Machining Department for Hagerstown Company agreed to the following monthly static budget for the upcoming year:

The actual amount spent and the actual units produced in the first three months in the Machining Department were as follows:

The Machining Department supervisor has been very pleased with this performance because actual expenditures for May–July have been significantly less than the monthly static budget of 519,000. However, the plant manager believes that the budget should not remain fixed for every month but should “flex” or adjust to the volume of work that is produced in the Machining Department. Additional budget information for the Machining Department is as follows:

a. Prepare a flexible budget for the actual units produced for May, June, and July in the Machining Department. Assume depreciation is a fixed cost. If required, use per unit amounts carried out to two decimal places.

b. Compare the flexible budget with the actual expenditures for the first three months.

Information pertaining to Noskey Corporation’s sales revenue follows:

Management estimates 5% of credit sales to be uncollectible. Of collectible credit sales, 60% is collected in the month of sale and the remainder in the month following the month of sale. Purchases of inventory each month include 70% of the next month’s projected total sales (stated at cost) plus 30% of projected sales for the current month (stated at cost). All inventory purchases are on account; 25% is paid in the month of purchase, and the remainder is paid in the month following the month of purchase. Purchase costs are approximately 60% of the selling price.

Required:

Determine for Noskey:

1. Budgeted cash collections in December 2018 from November 2018 credit sales.

2. Budgeted total cash receipts in January 2019.

3. Budgeted total cash payments in December 2018 for inventory purchases.

Information pertaining to Noskey Corporation’s sales revenue follows: November 2018 (Actual) December 2018 (Budgeted) January 2019 (Budgeted) Cash sales $ 80,000 $ 100,000 $ 60,000 Credit sales 240,000 360,000 180,000 Total sales $ 320,000 $ 460,000 $ 240,000 Management estimates 5% of credit sales to be uncollectible. Of collectible credit sales, 60% is collected in the month of sale and the remainder in the month following the month of sale. Purchases of inventory each month include 70% of the next month’s projected total sales (stated at cost) plus 30% of projected sales for the current month (stated at cost). All inventory purchases are on account; 25% is paid in the month of purchase, and the remainder is paid in the month following the month of purchase. Purchase costs are approximately 60% of the selling price. Required: Determine for Noskey: 1. Budgeted cash collections in December 2018 from November 2018 credit sales. 2. Budgeted total cash receipts in January 2019. 3. Budgeted total cash payments in December 2018 for inventory purchases.

West End Industrial Gas Corporation supplies acetylene and other compressed gases to industry. Data regarding the store's operations follow:

• Sales are budgeted at $360,000 for November, $380,000 for December, and $370,000 for January.
• Collections are expected to be 75% in the month of sale and 25% in the month following the sale.
• The cost of goods sold is 70% of sales.
• The company desires an ending merchandise inventory equal to 85% of the cost of goods sold in the following month.
• Payment for merchandise is made in the month following the purchase.
• Other monthly expenses to be paid in cash are $20,000.
• Monthly depreciation is $19,800.
• Ignore taxes.

Required:

a. Prepare a Schedule of Expected Cash Collections for November and December.

b. Prepare a Merchandise Purchases Budget for November and December.

c. Prepare Cash Budgets for November and December.

d. Prepare Budgeted Income Statements for November and December.

e. Prepare a Budgeted Balance Sheet for the end of December.

the only variable input a janitorial service uses to clean offices are workers who are paid a wage of $20 an hour, known as w. each worker is capable of cleaning 10 offices in one hour.

A) determine the average variable cost and marginal cost of cleaning one extra office

b) draw the diagram of the total cost, average variable cost, and marginal cost curves showing their relationships

c) how will these curves change with a lump sum franchise tax of $40?

1. Quantitative factors vs Qualitative factors, how useful are these two factors in decision making and what is the differences?

2. In a case of make-or-buy decision when there is an alternative uses for capacity, what is the significant of the opportunity cost in the decision of either to make or buy?

3. What is Cost Function? And how it can be used to calculate total cost?

4. What is the most important assumption frequently made in cost behavior estimation?

Consider the following for Columbia Street Manufacturing: Change in finished goods inventory$1,201increase Change in work-in-process inventory$494decrease Total manufacturing costs$1,080 What are the cost of goods manufactured and cost of goods sold? Cost of goods manufactured Cost of goods sold A.$1,101 $1,374 B.$1,574 $373 C.$1,993 $1,249 D.$1,574 $781 Multiple ChoiceOption A Option B Option C Option D

10. Prime costs are the combination of direct labor costs and factory overhead costs. (T/F) 11. Indirect costs can be specifically traced to a cost object. (T/F) 12. If the cost of materials is not a significant portion of the total product cost, the materials may be classified as part of factory overhead cost. (T/F) 13. Prime costs consist of direct materials, indirect materials, and direct labor. (T/F)

A home owner has a utility function of U (m) = √m, where m is income. The home owner is considering buying flood insurance because they live near a river that has flooded in the past. If it is a dry year, she will have an income of $60,000 to spend on other things. If it is a rainy year and there is a flood, then she has to pay for repairs to her house. Then her income will only be $20,000 to spend on non-flood costs. The probability of a flood based on historical data is 4%.

(a) (a) If the home owner can buy insurance for a premium of $0.04 per dollar of coverage, how large of an insurance policy should the homeowner buy? Set up the expected utility maximization problem and solve for K, the optimal insurance policy size.

(b) Now suppose we do not know the cost of the insurance policy. But you now know that in the event of a flood, that the insurance policy will pay you 75% of damages. What is the maximum amount the homeowner would be willing to pay for such an insurance policy?

(c) Explain in words how to generally calculate expected utility. What information do you need? What terms do you multiply versus add? Be clear in your explanation.

V & T Faces, Inc., would like to open a retail store in Miami. The initial investment to purchase the building is $420,000, and an additional $50,000 in working capital is required. Since this store will be operating for many years, the working capital will not be returned in the near future. V & T Faces expects to remodel the store at the end of 3 years at a cost of $100,000. Annual net cash receipts from daily operations (cash receipts minus cash payments) are expected to be as follows:

Year 1 $80,000

Year 2 $115,000

Year 3 $118,000

Year 4 $140,000

Year 5 $155,000

Year 6 $167,000

Year 7 $175,000

The company’s required rate of return is 13 percent.

Assume management decided to limit the analysis to 7 years.

Questions:

1) What is the weakness of using the payback period method to evaluate long-term investments?

2)Assume the manager of the company wanted to live in Miami and intentionally inflated the projected annual cash receipts so that the proposal would be accepted. The proposal would otherwise have been rejected. Explain how the company’s use of a post audit would help to prevent this type of unethical behavior.