Elfalan Corporation produces a single product. The cost of producing and selling a single unit of this product at the company's normal activity level of 58,000 units per month is as follows:

The normal selling price of the product is $122.10 per unit.

An order has been received from an overseas customer for 3,800 units to be delivered this month at a special discounted price. This order would not change the total amount of the company's fixed costs. The variable selling and administrative expense would be $3.00 less per unit on this order than on normal sales.

Direct labor is a variable cost in this company.

Suppose there is ample idle capacity to produce the units required by the overseas customer and the special discounted price on the special order is $94.40 per unit. The monthly financial advantage (disadvantage) for the company as a result of accepting this special order should be:

Garrison 16e Rechecks 2017-12-15

Multiple Choice

• $25,460

• ($92,000)

• $104,880

• ($84,740)

Industry demand is given by :

  P = 100-2Q

The total cost for the individual firm of which there are 4, is given by:

TCi = 10qi + qi^2

If the 4 firms form a cartel what will be the price and output if

1. the cartel is centralized and

2. the cartel is decentralized

As we know cheating is a problem with cartels what would happen to price and output if the cartel breaks down?

Ivanhoe Ltd. purchased a new machine on April 4, 2014, at a cost of $188,000. The company estimated that the machine would have a residual value of $18,000. The machine is expected to be used for 10,000 working hours during its four-year life. Actual machine usage was 1,400 hours in 2014; 2,200 hours in 2015; 2,300 hours in 2016; 2,100 hours in 2017; and 2,000 hours in 2018. Ivanhoe has a December 31 year end.

2. Cost of Goods Manufactured and Income Statement Following is information from the record of the Savoy Company for July. Purchases: Raw materials $90,000 Manufacturing supplies 3,500 Office supplies 1,200 Sales 445,800 Administrative salaries 12,000 Direct labor 117,500 Production employees’ fringe benefits 4,000 Sales commissions 55,000 Production supervisors’ salaries 7,200 Plant depreciation 14,000 Office depreciation 22,000 Plant maintenance 10,000 Plant utilities 35,000 Office utilities 8,000 Office maintenance 2,000 Production equipment rent 6,000 Office equipment rent 1,300 Inventories: July 1 July 31 Raw materials 18,000 27,000 Manufacturing supplies 2,500 4,000 Office supplies 1,600 2,000 Work in process 52,000 41,000 Finished goods 36,000 28,100

Required: Prepare a statement of cost of goods manufactured and an income statement. Actual overhead costs are assigned to products.

A truck acquired at a cost of $260,000 has an estimated residual value of $12,550, has an estimated useful life of 49,000 miles, and was driven 3,900 miles during the year. Determine the following. If required, round your answer for the depreciation rate to two decimal places.

Do you think the cost of space exploration is justified? To answer this question with facts do the following: Listed below are two lists. List A has astronomy-related projects and List B has other entities. Choose one item from each list, research their budgets and give a link to the data. Next give your frank assessment about the numbers you discovered. Do you think the costs are justified?   Support your answer with reasons.

List A

Apollo Moon Landings, International Space Station, Hubble Space Telescope, Mars Rover Spirit, Mars Rover Opportunity, Mars Rover Curiosity, Chandra X-ray Observatory, Spitzer Infrared Telescope, SOHO, Voyager missions, Cassini-Huygens Missions, Dawn Spacecraft, New Horizons Project, Keck Telescopes, McDonald Observatory, Very Large Array (VLA), WISE Mission.

List B

Dallas Independent School District, Dallas County Community Colleges, Parkland Hospital, University of Texas at Austin, Texas A & M University at College Station, Dallas Cowboys, Dallas Mavericks, Texas Rangers Baseball, Dallas Stars, Texas Instruments, Walmart, Microsoft, Apple, Blackboard, Exxon-Mobil, LBJ Frwy Expansion Project, American Red Cross, Salvation Army.

Waterways has discovered that a small fitting it now manufactures at a cost of $1.00 per unit could be bought elsewhere for $0.81 per unit. Waterways has fixed costs of $0.20 per unit that cannot be eliminated by buying this unit. Waterways needs 446,000 of these units each year.

If Waterways decides to buy rather than produce the small fitting, it can devote the machinery and labor to making a timing unit it now buys from another company. Waterways uses approximately 400 of these units each year. The cost of the unit is $13.28. To aid in the production of this unit, Waterways would need to purchase a new machine at a cost of $2,356, and the cost of producing the units would be $10.30 a unit.

Without considering the possibility of making the timing unit, evaluate whether Waterways should buy or continue to make the small fitting.

What is Waterways’ opportunity cost if it chooses to buy the small fitting and start manufacturing the timing unit?

Would it be wise for Waterways to buy the fitting and manufacture the timing unit?

Edwards Construction currently has debt outstanding with a market value of $82,500 and a cost of 7 percent. The company has EBIT of $5,775 that is expected to continue in perpetuity. Assume there are no taxes.

a-1. What is the value of the company's equity? (Do not round intermediate calculations. Leave no cell blank - be certain to enter "0" wherever required.) Value of equity

a-2. What is the debt-to-value ratio? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) Debt-to-value ratio

b. What are the equity value and debt-to-value ratio if the company's growth rate is 3 percent? (Do not round intermediate calculations and round your "Debt-to-value" answer to 3 decimal places, e.g., 32.161.) Equity value $ Debt-to-value

c. What are the equity value and debt-to-value ratio if the company's growth rate is 5 percent? (Do not round intermediate calculations and round your "Debt-to-value" answer to 3 decimal places, e.g., 32.161.) Equity value $ Debt-to-value

Entries for Sale of Fixed Asset

Equipment acquired on January 8 at a cost of $128,910 has an estimated useful life of 14 years, has an estimated residual value of $7,950, and is depreciated by the straight-line method.

a. What was the book value of the equipment at December 31 the end of the fourth year? $

b. Assume that the equipment was sold on April 1 of the fifth year for $86,090.

1. Journalize the entry to record depreciation for the three months until the sale date. If an amount box does not require an entry, leave it blank. Round your answers to the nearest whole dollar if required. (Accounts Payable, Accumulated Depreciation-Equipment, Cash, Depreciation Expense-Equipment, Equipment, Equipment Expense)

_______ ____ _____

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2. Journalize the entry to record the sale of the equipment. If an amount box does not require an entry, leave it blank. Do not round intermediate calculations. (Accounts Payable, Cash, Depreciation Expense-Equipment, Equipment, Gain on Sale of Equipment)

_______ ____ _____

_______ ____ _____

_______ ____ _____

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