The following data from the just completed year are taken from the accounting records of Mason Company:

Required:

1. Prepare a schedule of cost of goods manufactured. Assume all raw materials used in production were direct materials.

2. Prepare a schedule of cost of goods sold. Assume that the company's underapplied or overapplied overhead is closed to Cost of Goods Sold.

3. Prepare an income statement.

• Required 1

Prepare a schedule of cost of goods manufactured. Assume all raw materials used in production were direct materials.

Prepare a schedule of cost of goods manufactured. Assume all raw materials used in production were direct materials.

Prepare a schedule of cost of goods sold. Assume that the company's underapplied or overapplied overhead is closed to Cost of Goods Sold.

Prepare an income statement.

1. Prepare a schedule of cost of goods manufactured. Assume all raw materials used in production were direct materials.

2. Prepare a schedule of cost of goods sold. Assume that the company's underapplied or overapplied overhead is closed to Cost of Goods Sold.

3. Prepare an income statement.

Prepare an income statement.

As the manager of restaurant, you estimate the total product of labor used to cook metals. Use these data to calculate the marginal product of labor

-What effect does the law of diminishing marginal returns have on these schedules? What underlies the law of diminishing the marginal returns?

2As a result of increasing student population at the University of Pittsburg the nearby Pizza Hut restaurant is realizing record sales. It is considering adding a new ovem to bake additional pizzas. However, the daytime supervisor recommends simply employing more workers. How should the manager decide which course of action to take?

-Suppose that a perfectly competitive firm sells 300 batteries at $10 each. At this output, the firm's total variable cost is $1,800 and its total fixed cost is $600. Calculate the firm's profit per unit and total profit from this information.

-Why does the market system provide goods such as Pepsi-Cola, while the govenment provides goods such as highways and lighthouses?

In 20x0, the Tyra Corporation obtained the mining rights for a property in Northern Ontario for

$10,000,000. During the year 20x0, Tyra invested another $5,000,000 to build the infrastructure

of the mine. The mine became operational on December 31, 20x0. Tyra expects that the mine

will be operational for 15 years after which the site will have to be restored at a cost of

$8,000,000. The total output of the mine is expected to be 500,000 tonnes of ore. Tyra will be

using the units of production method of depreciation for both the mining rights and the

infrastructure.

Required –

a) During 20x1 and 20x2, the total tonnes of ore mined was 27,300 and 36,000 respectively.

Assuming a discount rate of 5%, prepare all journal entries for the years ended December

31, 20x0, 20x1 and 20x2.

b) In 20x8, Tyra estimates that the total output of the mine will be 450,000 tonnes and that

the mine will be closing on December 31, 20x12. The cost to restore the site is now

estimated to be $8,500,000. Total tonnes mined to December 31, 20x7 was 210,000

tonnes. A total of 31,000 tonnes were extracted in 20x8. Assuming a discount rate of 4%,

prepare all journal entries for the year ended December 31, 20x8.

Q73. the price is 3, the quantity demanded is 8. When the price is 6, the quantity demanded is 4. What is the price elasticity of When demand?      -------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Q74. A perfectly inelastic demand curve will be ---------------- on a graph while a perfectly elastic demand curve will be ------------------on a graph.        a. vertical; horizontal             b. horizontal; vertical           c. vertical; vertical                       d. horizontal; horizontal

Q75. When demand is price-inelastic, a price decrease will result in:

a. an increase in total cost.   b. an increase in total revenue.       c. a decrease in total cost.      d. a decrease in total revenue.

Q76. The practice of charging different prices to different buyers is called:

a. total revenue.             b. price discrimination.                 c. price elasticity.                 d. an increase in demand.

Q77. A percentage change in quantity supplied divided by a percentage change in price is called:

a. income elasticity.              b. price elasticity of demand.            c. price elasticity of supply.        d. elasticity of substitution.

Q78. When governments restrict agricultural production, the supply curve to shifts to the ----------, the equilibrium price ---------------, and the result is --------------------------------- revenue for farmers.

a. right; decreases; higher         b. left; decreases; higher             c. left; increases; lower               d. left; increases; higher

1. Suppose two landowners have land that can be set aside for habitat preservation purposes, although at a cost. Farm 1’s marginal costs from setting aside habitat is MC₁ = 2q₁, where q₁ is the units of land set aside. Farm 2’s marginal costs from setting aside habitat is MC₂ = q₂, where q₂ is the units of land set aside.

For parts a, b, and c, below, please assume that the government wants to preserve 1200 units of land from these two landowners, that is, q1 + q2 = 1200.

1. What is the cost-effective (meaning minimal-cost) allocation of habitat preservation between the two landowners? Calculate and show this graphically using the appropriate graph. Label (do not calculate) the associated total cost.  

2. Identify graphically, and explain (both algebraically and intuitively), the efficiency loss (here, meaning increase in total costs) that would occur if only Farm 1’s land was used to satisfy the habitat goal.

2. For the cost-effective allocation computed in part a, what are the imputed marginal benefits of habitat preservation, and why?

Thompson Motors specializes in producing one specialty vehicle. It is called Turner and is styled to easily fit multiple surfboards in its back area and top-mounted storage racks. Thompson has the following manufacturing costs:

Plant management costs, $1,200,000 per year

Cost of leasing equipment, $1,300,000 per year

Workers’ wages, $700 per Surfer vehicle produced

Direct materials costs: Steel, $1,500 per Turner, Tires, $125 per tire, each Turner takes 5 tires (one spare).

City license, which is charged monthly based on the number of tires used in production:

0 – 500 tires                      $50,000

501 – 1,000 tires              $74,500

More than 1,000 tires    $200,000

Thompson currently produces 110 vehicles per month.

1. What is the variable manufacturing cost per vehicle?
2. What is the fixed manufacturing cost per month?
3. What is the total manufacturing cost of each vehicle if 100 vehicles are produced each month?
4. What is the increase in total manufacturing cost if 225 vehicle are produced each month?

Ramada Company produces one golf cart model. A partially complete table of company costs follows:

Number of Golf Carts Produced and Sold 800 Units 1000 Units 1200 Units

Total costs   

Variable Cost $600,000

Fixed costs per year $360,000

Total costs $960,000

Cost per unit

Variable cost per unit

Fixed cost per unitTotal cost per unit

1. Ramada sells its carts for $1,500 each. Prepare a contribution margin income statement for each of the three production levels given in the table.

2.Calculate Ramada’s break-even point in number of units and in sales revenue.

3. Assume Ramada sold 450 carts last year. Without performing any calculations, determine whether Ramada earned a profit last year.?

4. Calculate the number of carts that Ramada must sell to earn $90,000 profit.

5. Using the degree of operating leverage, calculate the change in Ramada’s profit if sales are 15 percent less than expected.