Information from the records of the Bridgeview Manufacturing Company for August 2017 follows:

Prepare a statement of cost of goods manufactured and an income statement for August 2017.
Do not use negative signs with any of your answers below.

using the information below:

1.What is the cost of direct materials used?

2.How much is the total amount of manufacturing overhead cost?

3.What is the cost of goods manufactured?

4.What is the cost of goods sold?

5.What is total amount of period costs?

1. What is another term for the cost-volume-profit analysis?

   • ratio analysis
   • liquidity analysis
   • trend analysis
   • breakeven analysis

2. The cost-volume-profit analysis is a ________________ tool, something used by those internal to an organization for budgeting, planning, and decision-making purposes.

   • revenue
   • managerial accounting
   • liquidity
   • traditional financial accounting

3. Sales commission is an example of a fixed cost.

   • True
   • False

4. Utilities are an example of ___________ costs.

   • mixed
   • fixed
   • variable
   • All of the above.

5. Revenues – total variable costs – total fixed costs = _______________.

   • market value
   • selling price
   • profit or loss
   • efficiency

6. The denominator in the breakeven formula – average sales price minus average variable cost – is known as the _________________.

   • current ratio
   • unit contribution margin
   • return on investment
   • accounts payable turnover ratio

7. Some products or services have what is known as ______________ in economics, where demand does not change much in response to increases in prices.

   • price inelasticity
   • price elasticity
   • price character
   • commodity price

Determine if the following statements are true or false.

A. Suppose for a particular production function that MPL = 36(K/L) and MPK = 36(L/K) The price of capital is $5 per unit and the price of labor is $125 per unit. At the cost-minimizing combination of capital and labor, the firm should employ five times as much capital as labor.

B. The lower is the elasticity of substitution between capital and labor, the more inelastic labor demand will be.

C. The short-run total cost of producing some level of output can never be lower than long-run total cost.

D. Suppose in a particular production process that capital and labor are perfect substitutes so that three units of labor can always be substituted for one unit of capital. If the price of capital is $4 per unit and the price of labor is $1 per unit, the firm should employ only capital to minimize the cost of producing its output level.

1. What is likely to increase in a monopoly market compared to a competitive market?

A. Consumer surplus is likely to increase

B. Community surplus is likely to increase

C. Producer surplus is likely to increase

D. Social welfare is likely to increase

2. A deadweight social burden triangle (allocative inefficiency) occurs if a business produces an output where:

A. The total benefit to society equals the total cost

B. There is the biggest possible negative difference between marginal benefit and marginal cost on the last unit produced

C. The social marginal benefit of the last unit produced equals the social marginal cost

D. The social marginal benefit of the last unit produced is greater than the social marginal cost

3. The cobweb model of agricultural prices assumes that farmers base their production levels on what?

A. Last year's price

B. The government's price

C. The expected price next year

D. The output level set by the government

3. Chavez Company is considering purchasing new equipment or overhauling its existing equipment. The manager has gathered the following information: Current machinery: Original cost $ 50,000 Accumulated depreciation 40,000 Annual operating costs 5,000 Current market value 1,500 Salvage value at the end of five years - Cost of overhauling machinery: Cost of overhaul $ 12,000 Annual operating costs after overhauling 2,000 Salvage value at the end of five years - New machinery: Cost $ 56,000 Annual operating costs 1,000 Salvage value at the end of five years -

Required:

a) Identify the sunk costs associated with this decision.

b) Compute the increase or decrease in total income over the five-year period if the company chooses to buy the new equipment.

c) Compute the increase or decrease in total income over the five-year period if the company chooses to overhaul its existing machinery. d) What is your recommendation for this decision

Pablo Company calculates the cost for an equivalent unit of production using process costing.

Required:

1. Compute the cost per equivalent unit for both the weighted-average and FIFO methods. (Round your answers to 3 decimal places.)