Use the following information to answer questions 1-7
Consider a firm that daily rents machinery for the cost of $1000 and employs workers at the cost of $100 for a full day of work. The following table describes the production function of the firm. Fill the table such that you can make some production decisions for this firm.
|
Units of Labor |
Units of Production |
Fixed Costs |
Variable Costs |
Total Costs |
Average Variable Costs |
Average Total Costs |
Marginal Cost |
|
1 |
11.00 |
||||||
|
2 |
16.24 |
||||||
|
3 |
19.89 |
||||||
|
4 |
22.48 |
||||||
|
5 |
24.48 |
||||||
|
6 |
26.13 |
||||||
|
7 |
27.51 |
||||||
|
8 |
28.71 |
||||||
|
9 |
29.78 |
||||||
|
10 |
30.72 |
||||||
|
11 |
31.58 |
||||||
|
12 |
32.36 |
||||||
|
13 |
33.08 |
||||||
|
14 |
33.75 |
||||||
|
15 |
34.37 |
1. At what approximate level of production is the marginal cost of production equal to the average total cost?
2. What would be the firm’s level of production if the price of the good was $60?
3. What would be the firm’s profits at equilibrium if the price of the good was $60?
4. What would be the price of the good if the firm is employing 8 workers at equilibrium?
5. What would be the profit of the firm if the firm is employing 8 workers at equilibrium?
6. What would be the price of the good if the firm is employing 9 workers at equilibrium?
7. What would be the profit of the firm if the firm is employing 9 workers at equilibrium?
In: Economics
Liu, Inc. creates DVDs for major film companies. Over the past two years, Liu has only used one machine to burn the DVDs. This machine had the capacity to burn 50,000 DVDs per month. This year Liu purchased a brand new machine for burning the DVDs that had a capacity of 60,000 DVDs per month and a cost of $2,275,000. He estimates the machine has a useful life of five years. Before production of DVDs, Liu purchases blank DVDs from a domestic supplier at a cost of $0.25 / DVD. The manufacturing process requires two line workers; one to run the machine and one to package the DVDs. These employees are paid $0.05 / DVD produced (each). Cost of packaging is $1.75 / DVD. Additionally, Liu hired a production supervisor and is paying her $ 65,000 / year in salary and pays $ 9,000 / year in insurance. This year Liu estimates he will produce and sell a total of 1,000,000 DVDs (sales price = $5.50 / DVD). Please answer the following questions using Excel.
What will be Liu’s before-tax profit if he meets his sales goal?
What will be his total cost / DVD at this level of sales?
What will be Liu’s before-tax profit if he produces and sells 1,200,000 DVDs annually?
What will be his total cost / DVD at this level of sales?
What is his break-even point in units and sales dollars?
In: Accounting
Liu, Inc. creates DVDs for major film companies. Over the past two years, Liu has only used one machine to burn the DVDs. This machine had the capacity to burn 50,000 DVDs per month. This year Liu purchased a brand new machine for burning the DVDs that had a capacity of 60,000 DVDs per month and a cost of $2,275,000. He estimates the machine has a useful life of five years. Before production of DVDs, Liu purchases blank DVDs from a domestic supplier at a cost of $0.25 / DVD. The manufacturing process requires two line workers; one to run the machine and one to package the DVDs. These employees are paid $0.05 / DVD produced (each). Cost of packaging is $1.75 / DVD. Additionally, Liu hired a production supervisor and is paying her $ 65,000 / year in salary and pays $ 9,000 / year in insurance. This year Liu estimates he will produce and sell a total of 1,000,000 DVDs (sales price = $5.50 / DVD). Please answer the following questions using Excel.
What will be Liu’s before-tax profit if he meets his sales goal?
What will be his total cost / DVD at this level of sales?
What will be Liu’s before-tax profit if he produces and sells 1,200,000 DVDs annually?
What will be his total cost / DVD at this level of sales? What is his break-even point in units and sales dollars?
I need to know every step
In: Accounting
One tents has provided their per-unit sales and cost information for the year ended December 31, 2018. All per-unit costs below are based on the production and sale of 3,000 name tents. the relevant range is 0 - 3,500 tents
Sales $45
Costs
variable costs
direct materials 5
direct labor 7
Manufacturing Overhead 13
Period Costs 4
Fixed Costs
Manufacturing Overhead 5
Period cost 7
1. if 2000 tents are produced and sold, what is the product cost per tent?
2. what is the fixed cost per tent at 1000 tents( including costs) produced and sold?
3. what are the total fixed costs in this example at 2000 name tent (produced and sold)?
4. what are the total variable costs in this example at 2000 name tents (produced and sold)?
5. what are the total period costs at 2000 name tents(produced and sold)?
6. will Nancy's turn a profit if they sell 2000 name tents?
7. what is the cost equation of nancy's?
8. what is the contribution margin per unit?
9. how many units does nancy need to sell in order to break even if she them at the price listed at above?
10. if nancy expects to sell only 2000 tents, what price should she charge to break even?
In: Accounting
Complete the required tasks utilizing excel and label everything. All work must be shown to receive credit. A 20% late penalty will be assessed for each 24 hours submitted late. Below is the activity (purchases and Sales) for inventory held by Random Creations for the month of January, 2020: Beginning Inventory: January 1, 2020 80 Units @ $50 per unit Total $ 4,000 Purchases: January 18, 2020 40 Units @ $51 per unit Total $ 2,040 January 28, 2020 40 Units at $52 per unit Total $ 2,080 Sales: January 12, 2020 Sold 30 Units January 22, 2020 Sold 30 Units January 31, 2020 Sold 45 Units Using the information above, answer the following:
a) Compute the January 31, 2020 Ending Inventory and Cost of Goods Sold assuming Random Creations uses FIFO
b) Compute the January 31, 2020 Ending Inventory and Cost of Goods Sold assuming Random Creations uses LIFO and the Perpetual System
c) Compute the January 31, 2020 Ending Inventory and Cost of Goods Sold assuming Random Creations uses LIFO and the Periodic System
d) Compute the January 31, 2020 Ending Inventory and Cost of Goods Sold assuming Random Creations uses Average Cost and the Perpetual System REMEMBER ALL WORK MUST BE SHOWN TO RECEIVE CREDIT
In: Accounting
The following data pertain to the Vesuvius Tile Company for July.Work in process, July 1 (in units) .......................................................................................................................20,000Units started during July ...................................................................................................................................?Total units to account for ..................................................................................................................................65,000Units completed and transferred out during July ................................................................................................?Work in process, July 31 (in units) .....................................................................................................................15,000Total equivalent units: direct material .................................................................................................................65,000Total equivalent units: conversion ......................................................................................................................?Work in process, July 1: direct material .............................................................................................................$164,400Work in process, July 1: conversion ...................................................................................................................?Costs incurred during July: direct material .........................................................................................................?Costs incurred during July: conversion ..............................................................................................................659,400Work in process, July 1: total cost .....................................................................................................................244,200Total costs incurred during July .........................................................................................................................1,031,250Total costs to account for ..................................................................................................................................1,275,450Cost per equivalent unit: direct material .............................................................................................................8.25Cost per equivalent unit: conversion ..................................................................................................................?Total cost per equivalent unit ............................................................................................................................21.45Cost of goods completed and transfered out during July ......................................................................................?Cost remaining in ending work-in-process inventory: direct material ...................................................................?Cost remaining in ending work-in-process inventory: conversion .........................................................................79,200Total cost of July 31 work in process .................................................................................................................202,950Additional Information: a. Direct material is added at the beginning of the production process, and conversion activity occurs uniformly throughout the process. b. The company uses weighted-average process costing.
The July 1 work in process was 30 percent complete as to conversion. d. The July 31 work in process was 40 percent complete as to conversion. Required: Compute the missing amounts, and prepare the firm’s July production report.
In: Accounting
|
Work in process inventory
|
?$0
|
|
Raw materials inventory
|
$ 28
comma 200$28,200
|
|
Finished goods inventory
|
$ 40
comma 000$40,000
|
In: Accounting
Benson Company manufactures molded candles that are finished by hand. The company developed the following standards for a new line of drip candles:
| Amount of direct materials per candle | 1.70 | pounds | |
| Price of direct materials per pound | $ | 0.60 | |
| Quantity of labor per unit | 1.10 | hours | |
| Price of direct labor per hour | $ | 8.00 | /hour |
| Total budgeted fixed overhead | $ | 159,100 | |
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During 2017, Benson planned to produce 37,000 drip candles. Production lagged behind expectations, and it actually produced only 30,000 drip candles. At year-end, direct materials purchased and used amounted to 52,500 pounds at a unit price of $0.56 per pound. Direct labor costs were actually $7.70 per hour and 35,500 actual hours were worked to produce the drip candles. Overhead for the year actually amounted to $135,000. Overhead is applied to products using a predetermined overhead rate based on estimated units.
Required
a.&b. Compute the standard cost per candle for direct materials, direct labor, overhead and also the total standard cost for one drip candle.
c.&d. Compute the actual cost per candle for direct materials, direct labor, overhead and also the total actual cost per candle.
e. Compute the price and usage variances for direct materials and direct labor.
f. Compute the fixed cost spending and volume variances.
In: Accounting
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In: Accounting
Walton Company manufactures molded candles that are finished by hand. The company developed the following standards for a new line of drip candles:
| Amount of direct materials per candle | 1.70 | pounds | |
| Price of direct materials per pound | $ | 0.60 | |
| Quantity of labor per unit | 0.90 | hours | |
| Price of direct labor per hour | $ | 7.10 | /hour |
| Total budgeted fixed overhead | $ | 182,400 | |
During 2017, Walton planned to produce 32,000 drip candles. Production lagged behind expectations, and it actually produced only 25,000 drip candles. At year-end, direct materials purchased and used amounted to 43,900 pounds at a unit price of $0.56 per pound. Direct labor costs were actually $6.40 per hour and 24,900 actual hours were worked to produce the drip candles. Overhead for the year actually amounted to $150,000. Overhead is applied to products using a predetermined overhead rate based on estimated units.
Required
a.&b. Compute the standard cost per candle for direct materials, direct labor, overhead and also the total standard cost for one drip candle.
c.&d. Compute the actual cost per candle for direct materials, direct labor, overhead and also the total actual cost per candle.
e. Compute the price and usage variances for direct materials and direct labor.
f. Compute the fixed cost spending and volume variances.
In: Accounting