Veronica Mars, a recent graduate of Bell’s accounting program,
evaluated the operating performance of Dunn Company’s six
divisions. Veronica made the following presentation to Dunn’s board
of directors and suggested the Percy Division be eliminated. “If
the Percy Division is eliminated,” she said, “our total profits
would increase by $25,700.”
| The Other Five Divisions |
Percy Division |
Total | ||||||
|---|---|---|---|---|---|---|---|---|
| Sales | $1,663,000 | $100,400 | $1,763,400 | |||||
| Cost of goods sold | 977,000 | 76,200 | 1,053,200 | |||||
| Gross profit | 686,000 | 24,200 | 710,200 | |||||
| Operating expenses | 528,400 | 49,900 | 578,300 | |||||
| Net income | $157,600 | $ (25,700 | ) | $131,900 |
In the Percy Division, cost of goods sold is $59,100 variable and
$17,100 fixed, and operating expenses are $30,500 variable and
$19,400 fixed. None of the Percy Division’s fixed costs will be
eliminated if the division is discontinued.
Is Veronica right about eliminating the Percy Division? Prepare a
schedule to support your answer. (Enter negative
amounts using either a negative sign preceding the number e.g. -45
or parentheses e.g. (45).)
| Continue | Eliminate | Net Income Increase (Decrease) |
|||||
|---|---|---|---|---|---|---|---|
| Sales | $enter sales in dollars | $enter sales in dollars | $enter sales in dollars | ||||
| Variable costs | |||||||
| Cost of goods sold | enter the cost of goods sold in dollars | enter the cost of goods sold in dollars | enter the cost of goods sold in dollars | ||||
| Operating expenses | enter operating expenses in dollars | enter operating expenses in dollars | enter operating expenses in dollars | ||||
| Total variable | enter a subtotal of the two previous amounts | enter a subtotal of the two previous amounts | enter a subtotal of the two previous amounts | ||||
| Contribution margin | enter contribution margin in dollars | enter contribution margin in dollars | enter contribution margin in dollars | ||||
| Fixed costs | |||||||
| Cost of goods sold | enter the cost of goods sold in dollars | enter the cost of goods sold in dollars | enter the cost of goods sold in dollars | ||||
| Operating expenses | enter operating expenses in dollars | enter operating expenses in dollars | enter operating expenses in dollars | ||||
| Total fixed | enter a subtotal of the two previous amounts | enter a subtotal of the two previous amounts | enter a subtotal of the two previous amounts | ||||
| Net income (loss) | $enter net income or loss in dollars | $enter net income or loss in dollars | $enter net income or loss in dollars |
| Veronica is select an option incorrect/correct? |
In: Accounting
Veronica Mars, a recent graduate of Bell’s accounting program, evaluated the operating performance of Dunn Company’s six divisions. Veronica made the following presentation to Dunn’s board of directors and suggested the Percy Division be eliminated. “If the Percy Division is eliminated,” she said, “our total profits would increase by $26,500.”
| The Other Five Divisions |
Percy Division |
Total | ||||||
|---|---|---|---|---|---|---|---|---|
| Sales | $1,663,000 | $100,000 | $1,763,000 | |||||
| Cost of goods sold | 978,100 | 76,800 | 1,054,900 | |||||
| Gross profit | 684,900 | 23,200 | 708,100 | |||||
| Operating expenses | 529,000 | 49,700 | 578,700 | |||||
| Net income | $155,900 | $ (26,500 | ) | $129,400 |
In the Percy Division, cost of goods sold is $60,500 variable and
$16,300 fixed, and operating expenses are $29,100 variable and
$20,600 fixed. None of the Percy Division’s fixed costs will be
eliminated if the division is discontinued.
Is Veronica right about eliminating the Percy Division? Prepare a
schedule to support your answer. (Enter negative
amounts using either a negative sign preceding the number e.g. -45
or parentheses e.g. (45).)
| Continue | Eliminate | Net Income Increase (Decrease) |
|||||
|---|---|---|---|---|---|---|---|
| Sales | $enter sales in dollars | $enter sales in dollars | $enter sales in dollars | ||||
| Variable costs | |||||||
| Cost of goods sold | enter the cost of goods sold in dollars | enter the cost of goods sold in dollars | enter the cost of goods sold in dollars | ||||
| Operating expenses | enter operating expenses in dollars | enter operating expenses in dollars | enter operating expenses in dollars | ||||
| Total variable | enter a subtotal of the two previous amounts | enter a subtotal of the two previous amounts | enter a subtotal of the two previous amounts | ||||
| Contribution margin | enter contribution margin in dollars | enter contribution margin in dollars | enter contribution margin in dollars | ||||
| Fixed costs | |||||||
| Cost of goods sold | enter the cost of goods sold in dollars | enter the cost of goods sold in dollars | enter the cost of goods sold in dollars | ||||
| Operating expenses | enter operating expenses in dollars | enter operating expenses in dollars | enter operating expenses in dollars | ||||
| Total fixed | enter a subtotal of the two previous amounts | enter a subtotal of the two previous amounts | enter a subtotal of the two previous amounts | ||||
| Net income (loss) | $enter net income or loss in dollars | $enter net income or loss in dollars | $enter net income or loss in dollars |
| Veronica is select an optioncorrectincorrect correctincorrect |
In: Accounting
A travel agent arranged a payment plan for a client. It required a down payment of $300 and 12 monthly payments of $567. What was the total cost of the plan?
In: Accounting
A government can reduce the welfare inefficiencies caused by a monopoly by
|
imposing tariffs. |
||
|
setting the price to the Average Total Cost. |
||
|
taxing the monopoly. |
||
|
All of the above. |
In: Economics
The records of Alaska Company provide the following information for the year ended December 31. At Cost At Retail January 1 beginning inventory $ 469,010 $ 928,950 Cost of goods purchased 3,376,050 6,381,050 Sales 5,595,800 Sales returns 42,800 Required 1.Use the retail inventory method to estimate the company’s year-end inventory at cost. Check (1) Inventory, $924,182 cost 2.A year-end physical inventory at retail prices yields a total inventory of $1,686,900. Prepare a calculation showing the company’s loss from shrinkage at cost and at retail. (2) Inventory shortage at cost, $36,873
In: Accounting
Cost of Competitive Firm
In Vienna, there is a competitive market for the production of upright pianos. David’s piano production firm can make at most six pianos per week.
|
Quantity |
Fixed Cost ($) |
Variable Cost ($) |
Total Cost ($) |
Marginal Cost ($) |
|
0 |
2000 |
--- |
||
|
1 |
5000 |
|||
|
2 |
2000 |
11000 |
||
|
3 |
18000 |
|||
|
4 |
8000 |
|||
|
5 |
37000 |
|||
|
6 |
45000 |
Complete the four cost columns in the table above.
If the market price of pianos is $8000 this week, how many pianos should David’s firm produce to maximise profit?
What would David’s profit be this week? $
8 points
In: Economics
1.
If the market price is greater than _______ cost, a perfectly competitive firm can earn economic profits in the short run.
|
average variable |
||
|
marginal |
||
|
average fixed |
||
|
average total |
2.
The ___________ cost curve is closely associated with the firm's short-run supply curve in perfect competition.
|
marginal |
||
|
average fixed |
||
|
average variable |
||
|
average total |
3.
Which of the following will not occur if demand falls in the competitive market?
|
Less than normal profits are being earned during the adjustment to long-run equilibrium. |
||
|
Supply decreases. |
||
|
Firms leave the market. |
||
|
Firms enter the market. |
In: Economics
Given the following demand and cost functions, answer the questions below. ??(?) = 150 − 3? ?(?) = 5? a) What is the perfectly competitive long-run equilibrium price and quantity? b) Suppose the market is served by a monopolist, what is the long-run equilibrium price and quantity? c) Graph the demand, marginal cost, and marginal revenue curves. Indicate the equilibrium price and quantity pairs under perfect competition and monopoly. d) What are consumer, producer, and total surplus under perfect competition? e) What are consumer, producer, and total surplus under monopoly? f) What is the size of the deadweight loss under monopoly?
In: Economics
Efficiency:
Paul Heyne's definition:
Efficiency = value of output / value of input
Note that this definition is subjective, incorporating value judgements.
Mateer's definition:
Efficiency: the property of a resource allocation of maximizing the total surplus received by all members of society.
Maximize: Total Surplus = Value to Buyers less Cost to sellers
Other concepts:
Allocative Efficiency - Producing the combination of goods and services that satisfies society's wants to the greatest degree.
Technical Efficiency - Producing goods and services for the least possible cost while maintaining full utilization of resources.
Assignment: Just let me know that you understand the basic ideas.
In: Economics
FIFO and LIFO Costs Under Perpetual Inventory System The following units of an item were available for sale during the year: Beginning inventory 23 units at $44 Sale 8 units at $68 First purchase 23 units at $46 Sale 23 units at $69 Second purchase 11 units at $47 Sale 11 units at $69 The firm uses the perpetual inventory system, and there are 15 units of the item on hand at the end of the year. a. What is the total cost of the ending inventory according to FIFO? $ b. What is the total cost of the ending inventory according to LIFO? $
In: Accounting