Gandolph Game Company has established the following standards for the prime costs of one unit of its chief product, dartboards. Standard Cost Standard Quantity Standard Price or Rate Direct material $ 5.00 5.00 kilograms $ 1.00 per kilogram Direct labor 1.00 0.20 hour $ 5.00 per hour Total $ 6.00 During September, Gandolph purchased 195,000 kilograms of direct material at a total cost of $214,500. The total wages for September were $40,404, 75 percent of which were for direct labor. Gandolph manufactured 37,000 dartboards during September, using 177,600 kilograms of the direct material purchased in September and 7,770 direct-labor hours. Required: Compute the following variances for September. Please indicate whether each variance is favorable or unfavorable.

A perfectly competitive market exists for wheat. The inverse demand is P = 200 − Q where P is the price of wheat and Q is the total quantity of wheat. The private total cost for the unregulated market is C = 50 + 80Q + 0.5Q2 . The production of wheat creates an externality where the total external cost is E = 0.5Q2 .

(a) Solve for the unregulated competitive equilibrium of wheat and the socially optimal level of wheat.

(b) Derive the Pigouvian tax (per unit of output of wheat) that results in the social optimum.

(c) One big company, WheatsRUs, buys out all the farmers of wheat and becomes a monopolist. Using the same functional forms, solve for the unregulated monopoly equilibrium.

(d) Given the socially optimal level of wheat in (a), what is the optimal tax that should be placed on the monopolist?

**PLEASE MAKE SURE TO LIST ALL ANSWERS CLEARLY****

INCLUDE ALL ANSWERS

You must show the financial statement in all its parts including header, dollar signs and double line in the totals. Points will be subtracted from the exercises if these parts are not completed properly.

7-14 Complete the balance sheet and sales information in the table that follows for Isberg Industries using the following finanacial data:

Debt ratio: 50%

Quick ratio: 0.80x

Total assets turnover: 1.5x

Days sales outstanding: 36.0 days

Gross profit margin on sales: ( Sales - cost of goods sold) / Sales = 25%

inventory turnover ratio: 5.0x

Balance sheet:

Cash _______________ Accounts payable _____________

Accounts receivable _______________     Long - term debt $60,000

Fixed assets _______________ Common stock _____________

Total assets $ 300,000 Retained earnings $97,500

sales ______________ Total liabilities and equity _____________

Cost of goods sold _____________

Ford Corporation is pulling together its direct labor budget for the next two months. Each unit of output requires 0.05 direct labor-hours. The direct labor rate is $7.80 per direct labor-hour. The production budget calls for producing 5,200 units in June and 5,700 units in July.

Required:

Prepare the direct labor budget for the next two months, assuming that the direct labor work force is fully adjusted to the total direct labor-hours needed each month. (Round your answers to 2 decimal places.)

Maria consumes only two goods: pens and notebooks. Currently, pens cost $1 each and notebooks cost $3 each. Maria’s income is $15. The tables below show the total utility Maria receives from consuming various quantities of each of the goods. calculate the optimal consumption bundle for Maria. (Note: for full credit you must provide the correct quantities of pens and notebooks AND fill in as much of Table 3 as was necessary to arrive at your answer.)

#of Notebooks Total Utility # of Pens Total Utility

0    0 0 0

1    75 1 40

2    135 2 60

3      185 3 75   

4 230     4 87

5 . 270 5 97

6 300 6 105

7 320 7 111

Waterway Company is a manufacturer of smart phones. Its controller resigned in October 2020. An inexperienced assistant accountant has prepared the following income statement for the month of October 2020.

Prior to October 2020, the company had been profitable every month. The company’s president is concerned about the accuracy of the income statement. As her friend, you have been asked to review the income statement and make necessary corrections. After examining other manufacturing cost data, you have acquired additional information as follows.

1. Inventory balances at the beginning and end of October were:

2. Only 75% of the utilities expense and 60% of the insurance expense apply to factory operations. The remaining amounts should be charged to selling and administrative activities.

Prepare a schedule of cost of goods manufactured for October 2020.

Prepare a correct income statement for October 2020.

1) Suppose two firms operate a duopoly-cartel. They decide they do not trust each other enough to form a cartel and act like a monopoly. They agree acting only in their self-interest is harms them both. By compromising, the price they sell their product as will be

Select one:

a. equal to the monopoly price

b. less than the monopoly price

c. equal to the perfectly competitive market price

d. more than the monopoly price

2) When total revenue is greater than total variable cost, a firm in a competitive market will

Select one:

a. shut down if average revenue exceeds marginal cost

b. shut down

c. continue to operate at a loss

d. continue to operate as long as average revenue exceeds average fixed cost

3) Profit-maximising firms enter a competitive market when:

Select one:

a. total revenue for existing firms in the market exceeds their total fixed costs

b. price exceeds average total cost for existing firms in the market

c. total revenue for existing firms in the market exceeds their total variable costs

d. average revenue is less than average total cost for existing firms in the market

4) Suppose a competitive market experiences an increase in demand. This induces an increase in producer costs. Which of the following is most likely to occur?

Select one:

a. The condition of free entry into the market will be violated

b. The long-run market supply curve will be upward sloping

c. Some firms will not be price-takers

d. Producer profits must fall in the long run

5) An important difference between natural monopolies and other forms of monopoly, is they are

Select one:

a. unable to make a profit without a government subsidy

b. not subject to regulations by the government

c. typically unconcerned about competition eroding their monopoly position

d. not subject to barriers to entry

6) Suppose a monopoly changes changes its pricing strategy. It now uses a price-discrimination strategy. This will cause

Select one:

a. the consumer surplus to increase

b. the output sold to increase

c. the deadweight loss to increase

d. the profit to decrease

7) Economic losses in a monopolistically competitive market are

Select one:

a. only possible of collusion between firms cannot be maintained

b. a signal to some incumbent firms to exit the market

c. a signal for new firms to enter the market

d. are never possible in the short run

8) The only way a cartel is able to maintain its market power is if:

Select one:

a. the government uses competition laws to break-up the cartel

b. the product has an inelastic demand curve

c. the product has a horizontal demand curve

d. all the cartel members continue to cooperate

9) What is the monopolist's profit under the following conditions?

• The profit-maximising price charged for the goods is $60
• Marginal cost and marginal revenue intersect at an output of 30
• The marginal cost at at output of 30 is $40 and the average cost is $45

Select one:

a. $1350

b. $1800

c. $1200

d. $450

10)

Suppose a Government agency is undertaking a cost-benefit analysis on a new toll road. Which of the following costs or benefits would be the hardest to estimate?

Select one:

a. The cost of adding cycle lanes to the road.

b. The reduction in road deaths generated by the improved road design

c. The labour costs of building the road

d. The reduction in fuel spending by trucking companies using the road

11)

Suppose a farmer decides to convert their sheep farm to a vineyard to grow grapes. The amount of money the farmer could have earned by sheep farming instead is called

Select one:

a. an accounting cost

b. an explicit cost

c. an implicit cost

d. a variable cost

12)

Tamati owns a car-detailing business. In summer demand for detailing is highest. Tamati hires students to help him detail cars in summer. If Tamati works by himself he can detail 20 cars in a week. If he hires one worker, the two of them will detail 35 cars over a week. A second worker increases that to 47 cars. The third worker increases that to 57 cars. The fourth worker increases the total to 65 cars.

The marginal product of the first worker is

Select one:

a. 8 cars per week

b. 15 cars per week

c. 12 cars per week

d. 10 cars per week

Snoopy Company uses a job order costing system. The following inventory balances are available on January 1, 2020:

Raw Materials $22,400

Work in Process $92,500

Finished Goods $145,600

The Work in Process Inventory consisted of 3 jobs: #401 $33,800; #402 $21,400; and #403 $37,300

The Finished Goods Inventory consisted of 2 jobs: #399 $76,200 and #400 $69,400

Snoopy uses a normal costing system with an overhead rate based on machine hours. The following budgeted information was available for the year 2020: Factory overhead costs $245,000 and machine hours 35,000.

During 2020, the following transactions took place:

1. Raw materials costing $120,000 were purchased on account.
2. Total factory labor charges accrued were $257,400.
3. A summary of material requisitions and time tickets appeared as follows:

4. Other factory overhead costs include $42,500 depreciation on factory equipment, $8,300 of expired factory insurance, $9,500 of accrued property taxes, and $46,000 of miscellaneous factory costs paid in cash.

5. Job Nos. 401, 402, 403, 405, and 407 were completed.

6. Job Nos. 399, 400, 401, 403, and 407 were sold for $650,000 cash.

Required:

A. Complete the cost flow diagram and job order cost sheets in the attached work paper. Be sure to enter the beginning balances of the inventory accounts and be sure to compute and SHOW the ending balances of the accounts.

B. Verify the ending work in process and ending finished goods inventory balances by reconciling to the job cost sheets and SHOW this on your sheet.

Using the information from Question 6, prepare the required journal entries to record the transactions below:

Required:

Using the information from Question 6, prepare a manufacturing statement and a partial income statement.

All of the company's manufacturing overhead costs are fixed—it does not incur any variable manufacturing overhead costs. The predetermined overhead rate is based on a cost formula that estimated $2,882,000 of fixed manufacturing overhead for an estimated allocation base of 288,200 direct labor-hours. Wallis does not maintain any beginning or ending work in process inventory.The company’s beginning balance sheet is as follows:

The company’s standard cost card for its only product is as follows:

During the year Wallis completed the following transactions:

Purchased (with cash) 231,000 pounds of raw material at a price of $29.70 per pound.

Added 215,500 pounds of raw material to work in process to produce 95,200 units.

Assigned direct labor costs to work in process. The direct laborers (who were paid in cash) worked 245,400 hours at an average cost of $16.00 per hour to manufacture 95,200 units.

Applied fixed overhead to work in process inventory using the predetermined overhead rate multiplied by the number of direct labor-hours allowed to manufacture 95,200 units. Actual fixed overhead costs for the year were $2,741,000. Of this total, $1,342,000 related to items such as insurance, utilities, and salaried indirect laborers that were all paid in cash and $1,399,000 related to depreciation of equipment.

Transferred 95,200 units from work in process to finished goods.

Sold (for cash) 92,200 units to customers at a price of $170 per unit.

Transferred the standard cost associated with the 92,200 units sold from finished goods to cost of goods sold.

Paid $2,121,000 of selling and administrative expenses. Closed all standard cost variances to cost of goods sold.

1. Compute all direct materials, direct labor, and fixed overhead variances for the year.

2. Record transactions a through i for Wallis Company.

3. Compute the ending balances for Wallis Company’s balance sheet.

4. Prepare Wallis Company’s income statement for the year.

Record transactions a through i for Wallis Company.

Wallis Company Income Statement For the Year Ended 12/31/XX (dollars in thousands)

Sales

Cost of goods sold at standard

Total variance adjustments

Cost of goods sold

Gross margin   

Selling and administrative expenses

Net operating income