Diesel: At an activity volume of 60,000 units per year, the unit cost of production of this part is calculated as follows:

An outside supplier offered to sell Carthage Inc. this electrical component at only $ 10 per unit. One-third of the specific fixed manufacturing overhead is made up of foremen's wages and other costs that can be eliminated if the part is purchased. The other two thirds of the specific fixed indirect manufacturing costs consist of the depreciation of the equipment used, which has no resale value. The decision to purchase the part in question from an outside supplier would have no effect on the company's common overhead, and the space currently used for this production could be rented at $ 80,000 per year.

1.a In addition to the quantitative analysis ($), the company must take into account what qualitative consideration.

a. The quality of the component in the event of purchase

b. the reliability of the supplier in terms of compliance with the specifics of the product and delivery.

c. the change in supplier prices during the next periods

d. All the foregoing

1.b Should Carthage Inc. Purchase the Part from the External Supplier? Yes or No.

1.c How much would increase or decrease the company's profits if it decided to buy the component rather than make it itself.
a. profits will decrease by $ 80,000.           b. profits will increase by $ 80,000.            c. profits will increase by $ 25,000. d. profits will decrease by $ 25,000.

1.d The relevant unit cost of production is :

a. 6,75 $            b. 10,25 $         c. 8,25 $            d. 7,25 $

Opportunity cost of your resource is defined as "the value associated with the next best use of that resource (which you must give up)." Decisions you make should reflect your opportunity cost, and not just your out-of-pocket costs. For example, if you decide to spend two hours of your time watching TV, the opportunity cost of your time is the value associated with its next best use (studying, sleeping, or another use).

When the I-395 Express Lanes first opened in November 2019, the toll was expected to reach up to $30 for drivers in the Northbound lanes to travel a distance of only 8 miles during the morning rush hour.

Using the principles of Opportunity Cost and Rational Decision Making, explain why (or why not) drivers might pay up to $30 to save 30 minutes of travel time during the rush hour.

Assume that you own an exhaustible resore that is sold competitive,and the marginal cost of extraction at year t is given by:
Ct=5+0.5t+0.05t^2,
where t=0 at the beginning of 2010.it is also known that the interest rate is 7% per annum and the demand for the resource is:
Qt=100-Pt,
where Qt and Pt represent output level in,tons and price in year t respectively.
a)suppose that the price in year 2020 is anticipated to be 100, what were the prices,user costs and production level of the resource in 2015 and 2016?
b)if the market were monopolized in2017,what were the optimal production rule in that period?

1. The Weighted Average Cost of Capital (WACC) is

a.  the rate at which a company’s future cash flows need to be discounted

b. to arrive at a present value for the business.

c. all of the above reflect the WACC

d. the value of a company equals the present value of its future cash flows

2.  Flotation Cost is

a. the cost for servicing equity capital

b. the cost for using debt capital

c. the cost for using retained earnings

d. the cost for raising the new capital

1. Because of the difficulty of calculating the cost of byproducts and combined products, so how do you calculate byproducts and combined products?
2. Is this effective for judging no.1, what are its weaknesses?

Calculate the effective cost of the following trade credit terms when payment is made on the net due date. Use approximate​ cost-of-credit formula. Note​: Assume a​ 30-day month and​ 360-day year.

a. 4​/5​, net 45

b. 4​/10​, net 30

c. 3​/10​, net 60

d. 4​/10​, net 60

Suppose there is a perfectly competitive industry where all the firms are identical with identical cost curves.

Furthermore, suppose that a representative firm’s total revenue is given by the equation TR = q.p; where q is the quantity of output produced by the firm and p the market price (=P).

The market demand for this product is given by the equation P = 5000 – 9Q where Q is the market quantity.

In addition you are told that the market supply curve is given by the equation P = 1000 + Q.

a. What is the equilibrium quantity and price in this market given this information?

b. The firm’s MC equation based upon its TC equation is MC = 5q + 4. Given this information and your answer in part (a), what is the firm’s profit maximizing level of production, total revenue, total cost and profit at this market equilibrium?

Is this a short-run or long-run equilibrium? Explain your answer.

c. Given your answer in part (b), what do you anticipate will happen in this market in the long-run?

Explain the two seemingly contradictory statements “The greater the quality the greater the cost and greater the price” and “The greater the quality the lower the cost and lower the price.”

The Starr Company has established a standard cost system for the manufacture of a single consumer product, which is branded under the name Vinbit. The standard costs of producing one Vinbit are shown below:

Standard Cost Card:

Direct Materials: 20 pounds @ $.30                                         $6.00

Direct Labor: 3 hours @ $15.00                                             $45.00

At the beginning of the year, Starr Company established a monthly flexible overhead budget as follows:

Flexible Overhead Budget:

Variable Charges - $.60 per direct labor hour

Fixed Charges - $5,000.00 per month

Budgeted Volume – 10,000 direct labor hours      

The costs of operations to produce 4,500 Vinbits during May are stated below (there were no initial inventories):

            Actual Costs:

            Materials purchased: 110,000 pounds @ $.31                    $34,100

            Materials used: 105,000 pounds

            Direct Labor: 13,750 hours @ $15.20                                 $209,000

            Variable overhead incurred                                                     $8,500

            Fixed overhead incurred                                                          $6,000

Required:

1. Prepare a calculation of the direct material price and quantity variances for the month of May. Variances are calculated as soon as possible.

2. Prepare a calculation of the direct labor wage rate and efficiency variances for the month of May.