Question 37

1. A monopolist maximizes profits by

   	a.	producing an output level where marginal revenue equals marginal cost.
   	b.	charging a price equal to marginal revenue and marginal cost.
   	c.	charging a price where marginal cost equals average total cost.
   	d.	Both a and b are correct.

Question 38

1. A monopoly is an inefficient way to produce a product because

   	a.	it faces a downward-sloping demand curve.
   	b.	it can earn both short-run and long-run profits.
   	c.	the cost to the monopolist of producing one more unit exceeds the value of that unit to potential buyers.
   	d.	it produces a smaller level of output than would be produced in a competitive market.

Question 39

1. A movie theater can increase its profits through price discrimination by charging a higher price to adults and a lower price to children if it

   	a.	can prevent children from buying the lower-priced tickets and selling them to adults.
   	b.	has some degree of monopoly pricing power.
   	c.	can easily distinguish between the two groups of customers.
   	d.	All of the above are correct.

Raphael Ltd. is a small engineering business that has annual credit sales revenue of $2.4 million. In recent years, the business has experienced credit control problems. The average collection period for sales has risen to 50 days even though the stated policy of the business is for payment to be made within 30 days. In addition, 1.5% of sales are written off as bad debts each year. The accounts receivable are currently financed through a bank overdraft, which has an interest rate of 12% a year.

The business has recently communicated with a factor that is prepared to make an advance to the business equivalent to 80% of receivables, based on the assumption that customers will, in future, adhere to a 30-day payment period. The interest rate for the advance will be 11% a year. The factor will take over the credit control procedures of the business and this will result in a saving to the business of $18,000 a year; however, the factor will charge 2% of sales revenue for this service. The use of the factoring service is expected to eliminate the bad debts incurred by the business.

Required:

Calculate the net cost of the factor agreement to the business and state whether the business should take advantage of the opportunity to factor its accounts receivables.

1.Calculate the Chi-Squared value for the observed data

2. Calculate the degree of freedom

3. Find the critical value using the Chi-Square critical value table linked below

Pato Corporation produces leather sandals. The company uses a standard costing system and has set the following standards for direct materials and direct labor (for one pair of sandals): Leather (3 strips @ $5) $15 Direct labor (2 hrs. @ $6) 12 Total prime cost $27 During the year, Pato produced 4,000 pairs of sandals. The actual leather purchased was 12,400 strips at $4.98 per strip. There were no beginning or ending inventories of leather. Actual direct labor was 8,400 hours at $6.25 per hour. Required: 1. Compute the costs of leather and direct labor that should have been incurred for the production of 4,000 pairs of sandals. 2. Compute the total budget variances for direct materials and direct labor. 3. Break down the total budget variance for direct materials into a price variance and a usage variance. Prepare the journal entries associated with these variances. 4. Break down the total budget variance for direct labor into a rate variance and an efficiency variance. Prepare the journal entries associated with these variances.

Inventory Costing Methods

Morrison Inc. reported the following information for the month of October:

During October, Morrison sold 138 units. The company uses a periodic inventory system.

Required:

What is the value of ending inventory and cost of goods sold for October under the following assumptions.

ASSUMPTIONS:

Answer with $

1. Cost of Goods Sold=

Ending Inventory=

2. Cost of Goods Sold=

Ending Inventory=

3. Cost of Goods Sold=

Ending Inventory=

4. Cost of Goods Sold=

Ending Inventory=

1. If the Ortiz Corporation purchases 100 washing machines from the Whirlpool Corporation FOB Shipping Point, who pays for the cost of shipping the machines from Whirlpool to Ortiz?

2. Rodriguez Company reported the following balances at November 30, 2019:

                                Gross Sales Revenue                                                 $16,000

                                Sales Returns and Allowances                                          600

                                Sales Discounts                                                                300

                                Cost of Goods Sold                                                        7,600

1. What are the net sales for the month?

2. What is the gross margin for the month?

3. Reid Supply sells backpacks and other school supplies. The company uses a perpetual inventory system. During June, the following transactions and events occurred:

June           4 Sold 70 backpacks at $25 each to Hunter Company, terms 2/10, n/30, F.O.B. Shipping Point.

June           6 Gave credit of $150 for the return of 6 backpacks purchased on Sept. 4 that were defective.

June 14 Received a check as payment in full from Hunter Company.

Instructions: Please write the journal entries for the June sales transactions for Reid Supply.

For the following investments, identify whether they are:

      A. Trading                                                           

      B. Available-for-Sale                                          

      C. Held-to-Maturity

      D. None of the above

A letter may be used more than once or not at all. (5 points)

____    1. Preferred stock was purchased in the previous year. The company intends to hold it

                 for several more years.

____    2. 5-year bonds were purchased this year. The company plans to sell the bonds

                 immediately after the next interest payment which will occur one month after the

                 purchase.

____    3. 5% of the common stock of Atkinson, Inc. is owned as an investment. The holding

                 company intends sell the stock as soon as the price increases which is expected to

                 occur in two weeks.

____    4.    A bond that matures in ten years was purchased. The company intends to hold the bond for the full ten years in order to receive the interest revenue. Cash needs, however, may result in the bond being sold in the next year.

____   5.    A bond that matures in two years was purchased as a means of funding the purchase

                  of new capital equipment that is projected to be needed two years from now.

1. Last month a manufacturing company's profit was NS2 000, calculated using absorption costing principles. If marginal costing principles has been used, a loss of N$3 000 would have occurred. The company's fixed production cost is N$2 per unit. Sales last month were 10 000unit.

What was last month's production (in units)?

2. HELAO Ltd uses a process costing system. During the month they put 250 units of total manufacturing costs of N$16 875. The company has estimated that the normal loss would be 10%

What's the unit cost of a "good unit" ?

3. For the current year Paxman Company incurred N$150 000 in actual manufacturing overhead cost. The manufacturing overheads account showed that overheads were over-applied to the amount of N$6 000 for the year. If the predetermined overhead rate was N$ 8 per direct labour hour, how many hours were worked during the year?

4. You are the management accountant at one of the famous NWR Resorts offering special packages for holidaymakers. Accommodation facilities are in the form of chalets with a capacity of five (5) family members per chalet. For the whole month of December 2019, it hosted 300 holidaymakers, which only 95% of full capacity, and all Chalets were fully occupied. Package 1 has a daily rate of N$ 120.00 per person. Package 2 has a daily rate of N$ 200,00 per person, and the sales mix ratio is 60:40, respectively. Monthly variable costs are N$ 350 000 for package 1 and N$ 400 000 for package 2 with combined fixed costs of N$ 300 000.

a)How much revenue was required to break even in December?

b)Due to the Covid-19 impact on the tourism industry, revenue is projected to decrease by 30% and variable costs by 15% Using the same information how much revenue will be required to break even in the next month?

5. A company has the following budgeted costs and revenues:

Sales = N$ 50
Variable production cost = N$ 18
Fixed production cost =N$ 10

In the most recent period, 2000 units were produced and 1 000 units were sold. Actual sales price, variable production cost per unit and total fixed production costs were all as budgeted. Fixed production costs were over-absorbed by N$4000. There was no opening inventory for the period.

What would be the reduction in profit for the period if the company has used marginal costing rather than absorption costing?

. The following quote is from Mallet J (2006) What does Drosophila genetics tell us about speciation? Trends in Ecology & Evolution 21:386-393

“Studies [in] Drosophila have given insight into the genetic changes that result in reproductive isolation. Here, I survey some extraordinary and important advances in Drosophila speciation research. However, ‘reproductive isolation’ is not the same as ‘speciation’, and this Drosophila work has resulted in a lopsided view of speciation.”

Focus in on the last sentence in this quote and answer the following questions:

a. What is speciation? (4 points)

b. What is reproductive isolation? (4 points)

c. Define species according to the Biological Species Concept (BSC). (4 points)

d. Given the BSC, what does the author mean that speciation and reproductive isolation are not synonymous? (4 points)

e. In any event, species concepts are difficult to deal with. The definitions we have for species do not often work for all species. Give an example of how the Biological Species Concept “breaks down” in some cases. (4 points)