9. If a fishing boat owner brings 10,000 fish to market and the market price is $7 per fish, she will have $70,000 in total revenue. If the average variable cost of 10,000 fish is $4 and the fixed cost of the boat is $20,000, what is her profit?

a. $1.
b. $3.
c. $1,000.

d. $3,000.

e. $10,000.

10. A firm is currently operating where the MC of the last unit produced = $64, and the MR of this unit = $70. What would you advise this firm to do?

a. Shut down.
b. Increase output.
c. Stay at current output.

d. Decrease output.
e. Decrease price.

11. When choosing the production level for tomorrow you find that at an output of 100 units, the total variable costs are $20,000 and the average fixed cost is only $50. If the market price is $200, you should:

a. b or e.
b. shut down.
c. produce more than 100 units.

d. produce fewer than 100 units.

e. produce where MC = MR.

12. If ABC Printing is producing an output level of 100, where MR is $5 and MC is $3, then the firm is:

a. maximizing total profit.
b. making too much profit.
c. making $200 total profit.
d. making $200 total loss.
e. making an unknown amount of profit or loss.

Amy’s Binders produces and sells both custom and ordinary binders. The company has four departments: Marketing, HR, Custom Binders, and Ordinary Binders. The Marketing and HR departments provide support services for each other as well as for the operating departments. The two operating departments run completely independently of each other. Amy uses the number of employees to allocate HR costs, and the total dollars spent to allocate Marketing costs. The following data is available for the year just ended: Support Departments Operating Departments Marketing HR Custom Ordinary Costs incurred before allocations 800,000 500,000 1,400,000 1,600,000 Total dollars spent - 120,000 650,000 730,000 Number of employees 15 - 310 675 REQUIRED: a) Assume that Amy allocates the costs of its support departments to the operating departments using the direct method. Calculate the total cost, including allocations, of each of the two operating departments. b) Disregard your answer to (a). Assume that Amy allocates the costs of its support departments to the operating departments using the step-down method based on the percentage of their services provided to other support departments. Calculate the total cost, including allocations, of each of the two operating departments. c) Disregard your answers to (a) and (b). Assume that Amy allocates the costs of its support departments to the operating departments using the reciprocal method. Calculate the total cost, including allocations, of each of the two operating departments.

Rosenthal Company manufactures bowling balls through two processes: Molding and Packaging. In the Molding Department, the urethane, rubber, plastics, and other materials are molded into bowling balls. In the Packaging Department, the balls are placed in cartons and sent to the finished goods warehouse. All materials are entered at the beginning of each process. Labor and manufacturing overhead are incurred uniformly throughout each process. Production and cost data for the Molding Department during June 2020 are presented below.

(a)

Prepare a schedule showing physical units of production.

b) Determine the equivalent units of production for materials and conversion costs

c) Compute the unit costs of production

d) Determine the costs to be assigned to the units transferred out and in process for June

e) Prepare a production cost report for the Molding Department for the month of June

Kubin Company’s relevant range of production is 24,000 to 31,000 units. When it produces and sells 27,500 units, its average costs per unit are as follows:

3. Assume the cost object is the company’s various sales representatives. Furthermore, assume that the company spent $107,250 of its total fixed selling expense on advertising and the remainder of the total fixed selling expense comprised the fixed portion of the company's sales representatives’ compensation.

b. When the company sells 27,500 units, what is the total indirect selling expense that cannot be readily traced to individual sales representatives?

Good morning,

Yes I did post part a

Someone answered part (a) and (c) already. Here is the answered part (A).

Can you complete part B please

Thank you

Here is part (A) again

Comprehensive Problem 5
Part A:

Note: You must complete part A before completing parts B and C.

Genuine Spice Inc. began operations on January 1 of the current year. The company produces 8-ounce bottles of hand and body lotion called Eternal Beauty. The lotion is sold wholesale in 12-bottle cases for $100 per case. There is a selling commission of $20 per case. The January direct materials, direct labor, and factory overhead costs are as follows:

Part A—Break-Even Analysis

The management of Genuine Spice Inc. wishes to determine the number of cases required to break even per month. The utilities cost, which is part of factory overhead, is a mixed cost. The following information was gathered from the first six months of operation regarding this cost:

Required:

1. Determine the fixed and variable portions of the utility cost using the high-low method. Round the per unit cost to the nearest cent.

2. Determine the contribution margin per case. Enter your answer to the nearest cent.

Contribution margin per case $

3. Determine the fixed costs per month, including the utility fixed cost from part (1).

4. Determine the break-even number of cases per month.
cases

This is a part of question A

Comprehensive Problem 5
Part B:

Note: This section is a continuation from Part A of the comprehensive problem. Be sure you have completed Part A before attempting Part B. You may have to refer back to data presented in Part A and use answers from Part A when completing this section.

Genuine Spice Inc. began operations on January 1 of the current year. The company produces 8-ounce bottles of hand and body lotion called Eternal Beauty. The lotion is sold wholesale in 12-bottle cases for $100 per case. There is a selling commission of $20 per case. The January direct materials, direct labor, and factory overhead costs are as follows:

Part B—August Budgets

During July of the current year, the management of Genuine Spice Inc. asked the controller to prepare August manufacturing and income statement budgets. Demand was expected to be 1,500 cases at $100 per case for August. Inventory planning information is provided as follows:

Finished Goods Inventory:

Materials Inventory:

There was negligible work in process inventory assumed for either the beginning or end of the month; thus, none was assumed. In addition, there was no change in the cost per unit or estimated units per case operating data from January.

Required:

5. Prepare the August production budget. Enter all amounts as positive numbers.

6. Prepare the August direct materials purchases budget. Enter the unit price to the nearest cent. Enter all amounts as positive numbers.

7. Prepare the August direct labor cost budget. For hours required, round to nearest whole hour. For hourly rate, enter to the nearest cent, if required.

8. Prepare the August factory overhead cost budget. If an amount box does not require an entry, leave it blank.

9. Prepare the August budgeted income statement, including selling expenses. Enter all amounts as positive numbers.

1. A key part of understanding a market is to understand something about the supply of products and services produced by profit-maximizing firms; firms that try to maximize the value of revenues minus costs. The core profit equation is thus:

Profit = Price x Quantity – Variable Costs – Fixed Costs

1. What are the distinctions between fixed costs, sunk costs, variable costs and marginal costs?

2. What is the difference between economic profit and accounting profit? Why should managers focus mainly on economic profits?

3. What is the basic profit maximization rule in relation to MC for businesses when trying to choose production levels for most market structures?

4. Complete the following table:

5. Referring to the cost table you calculated above:

• If the product being produced is currently priced at $2.00 comment on the short-term and long-term operating choices faced by the firm.

• If the product is currently selling for $10.00 what would you anticipate happening in the long-run for this firm?

• If the ATC represents the long-term average total costs for the industry, and the market is perfectly competitive, what would you predict as the long-run price of the product?

1)If a perfectly competitive firm is producing a quantity where P < MC, then profit:

Group of answer choices

a)can be increased by increasing production.

b)is maximized.

c)can be increased by decreasing the price.

d)can be increased by decreasing production.

2)Which of the following accurately explains why firms in perfectly competitive markets are price takers?

Group of answer choices

a)prices in perfectly competitive markets are set by government regulation.

b)prices in perfectly competitive markets are determined by the costs of production, which firms cannot control.

c)consumers in markets for perfectly competitive goods determine the price that firms must take based on their individual demands.

d)the pressure of competition forces all firms to accept the prevailing equilibrium price in the market.

3)In the case of Snack Corp, when the price they sell their product at is _______ average cost of production, profits are ______ due to ________ average profit.

Group of answer choices

a)below; negative; positive

b)below; negative; negative

c)below; positive; positive

d)above; negative; negative

4)A firms supply curve is equal to _________________ above the minimum point on the ________________curve.

Group of answer choices

a)marginal cost; average variable cost

b)marginal revenue; average total cost

c)average variable cost, average total cost

d)average total cost, marginal cost

5)In a perfectly competitive market in long-run equilibrium, a decrease in demand creates economic ________ in the short run and _________________ in the long run.

a)Group of answer choices

b)losses, induces entry

c)losses, forces some firms to exit

d)profits, induces entry

profits, forces some firms to exit

Activity Base Costing (ABC)

Mango Mancam has two produce lines for it well marketed Milk Shake drink: Regular and Deluxe size. The company assigns $340,000.00 in manufacturing overhead costs to three departments; Purchasing, Mixing and Packing.

Additional information about each product line is shown below;

The following cost pool and cost driver was used

The amount of driver activity corresponding to each product line is as follow

(a) Allocate manufacturing overhead costs to each product line using machine hours as a single cost driver.

(b) Allocate manufacturing overhead costs to each product line using the ABC approach.

(c) Compute the total manufacturing costs assigned to each product line when using ABC and traditional method.

(d) As a manager advice the CEO of the company what is the most cost effective method for the company. Give some key example. (Hint: keep your answer short, sweet and simple)

FIFO Perpetual Inventory

The beginning inventory at Dunne Co. and data on purchases and sales for a three-month period ending June 30 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 3, using the first-in, first-out method. Under FIFO, if units are in inventory at two different costs, enter the units with the LOWER unit cost first in the Cost of Goods Sold Unit Cost column and in the Inventory Unit Cost column.

2. Determine the total sales and the total cost of goods sold for the period. Journalize the entries in the sales and cost of goods sold accounts. Assume that all sales were on account.

3. Determine the gross profit from sales for the period.
4. Determine the ending inventory cost as of June 30.
5. Based upon the preceding data, would you expect the ending inventory using the last-in, first-out method to be higher or lower?

Required information

Information for Pueblo Company follows:

The total fixed costs are $42,000.

Determine target sales needed to earn a $21,000 target profit.