In 2018, X Company's revenue-based profit function was 0.35R - $76,800. Only one change is expected in 2019, a 10% decrease in total fixed costs. What must revenue be in 2019 for X Company to earn $38,000?

In 2018, X Company sold 5,000 units of its only product for $35.70 each. Unit costs were as follows:

In 2019, the selling price, variable costs per unit, and total fixed costs are not expected to change. Assuming a tax rate of 31%, how many units must X Company sell in 2019 in order to earn $64,000 after taxes?

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X Company, a merchandiser, had the following income statement for 2018:

$97,828 of the cost of goods sold were variable, and $28,423 of the other operating expenses were variable. If cost behavior in 2019 is expected to continue as it did in 2018, what must total sales be in 2019 in order for X Company to break even?

Montreal Manufacturing Inc. has the following cost and production data for the month of April.

The beginning inventory was 60% complete for conversion costs. The ending inventory was 40% complete for conversion costs. Materials are added at the beginning of the process.

Costs pertaining to the month of April are as follows:

The Bowman Corporation has a bond obligation of $16 million outstanding, which it is considering refunding. Though the bonds were initially issued at 13 percent, the interest rates on similar issues have declined to 11.8 percent. The bonds were originally issued for 20 years and have 10 years remaining. The new issue would be for 10 years. There is a call premium of 9 percent on the old issue. The underwriting cost on the new $16,000,000 issue is $460,000, and the underwriting cost on the old issue was $350,000. The company is in a 35 percent tax bracket, and it will use an 10 percent discount rate (rounded aftertax cost of debt) to analyze the refunding decision. Use Appendix D for an approximate answer but calculate your final answer using the formula and financial calculator methods.

A. Calculate the present value of total outflows to 2 decimal places

PV of total outflows_____________

B. Calculate the present value of total inflows to 2 decimal places

PV of total outflows __________________

c. Calculate the net present value. (Negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places.)

NPV ______________

D. should the old issue be refunded with new debt?

yes or no

The human resources department for your company needs a program that will determine how much to deduct from an employee’s paycheck to cover healthcare costs. Health care deductions are based on several factors. All employees are charged at flat rate of $150 to be enrolled in the company healthcare system. If they are married there is an additional charge of $75 to cover their spouse/partner. If they have children, the cost is $50 per child. In addition, all employees are given a 10% deduction in the total cost if they have declared to be a “non-smoker”.

Your goal is to create a program that gathers the employee’s name, marital status, number of children and whether or not they smoke tobacco for a single employee. While gathering this information, if the user enters at least one invalid value, the program must display one error message telling the user they made a mistake and that they should re-run the program to try again. The program must then end at this point. However, if all valid values are entered, the program should calculate the total cost of the healthcare payroll deduction and then print a well-formatted report that shows the employee’s name, marital status, total number of children, and smoker designation, and total deduction amount.

Please write a pseudocode for the above problem. Don't forget to validate the inputs as necessary.

Consider the production function F(L,K) = L^2/3 K^2/3 .

(f) Does this production function exhibit increasing, decreasing or constant returns to scale? Explain.

(g) Find the total cost, average cost and marginal cost of producing y units of output. Is the average cost increasing or decreasing in y? Is the marginal cost higher or lower than the average cost?

Question 2 The production of magic chairs requires only two inputs: seats (S) and legs (L) (no other inputs are required as magic chairs assemble themselves). Each chair requires 1 seat and 4 legs. Thus the production function is given by F(S,L) = min{S, L/4}. 4 You may assume that seats, legs and magic chairs are infinitely divisible. (That is. it is possible to use 0.3 seat or 3.4 legs or produce 2.3 chairs.)

(a) Does this production function exhibit increasing, decreasing or constant returns to scale? Explain. (Hint: min{2x, 2y} = 2 min{x, y}.)

(b) Suppose seat costs $5 each while legs costs $1 each. Find the total cost, average cost and marginal cost of producing y magic chairs.

1. A company is trying to decide between making or buying a component in one of their products. The fixed and variable costs for both options are given below:

Cost                                                           Make Option                                  Buy Option

Fixed Cost                                                   $25000                                             $3000

Variable Cost                                                 $8                                                     $12

a. Find the break-even quantity and the total cost at the break-even point.

b. If the requirement is 4,500 units, is it more cost-effective for the firm to buy or make the components? What is the cost savings for choosing the cheaper option?

c. If the requirement is 6,000 units, is it more cost-effective for the firm to buy or make the components? What is the cost savings for choosing the cheaper option?

Problem 19-01

Management believes it can sell a new product for $8.50. The fixed costs of production are estimated to be $5,500, and the variable costs are $3.50 a unit.

1. Complete the following table at the given levels of output and the relationships between quantity and fixed costs, quantity and variable costs, and quantity and total costs. Round your answers to the nearest dollar. Enter zero if necessary. Use a minus sign to enter losses, if any.

   Quantity		Total Revenue	Variable Costs	Fixed Costs	Total Costs	Profits (Losses)
   0		$	$	$	$	$
   500		$	$	$	$	$
   1,000		$	$	$	$	$
   1,500		$	$	$	$	$
   2,000		$	$	$	$	$
   2,500		$	$	$	$	$
   3,000		$	$	$	$	$

2. Determine the break-even level using the above table and use the Exhibit 19.5 to confirm the break-even level of output. Round your answers for the break-even level to the nearest whole number. Round your answers for the fixed costs, variable costs, total costs, and profits (losses) to the nearest dollar. Enter zero if necessary. Use a minus sign to enter losses, if any.

   Quantity	Total Revenue	Variable Costs	Fixed Costs	Total Costs	Profits (Losses)
   	$	$	$	$	$

3. What would happen to the total revenue schedule, the total cost schedule, and the break-even level of output if management determined that fixed costs would be $7,500 instead of $5,500? Round your answer for the break-even level of output to the nearest whole number.

   If fixed costs were $7,500 instead of $5,500 the total revenue schedule does not change and the total cost schedule increases.

   The new break-even level of output is   units.