Answer:
Heuristic is a way to deal with critical thinking, learning, or revelation that utilizes a functional strategy not destined to be ideal or great, however adequate for the quick objectives. As it were, heuristics are systems gotten from past encounters with comparable issues. These procedures depend on utilizing promptly available, however freely material, data to control critical thinking in individuals, machines, and unique issues. The re-appropriating heuristic is like the work process mix which implies that it considers the work processes of different gatherings. The fundamental point of re-appropriating heuristic is that it will produce less cost. Anyway the quality may diminish. Let me clarify to sum things up about the interfacing heuristic methodology: it is considered as a normalized interface with customers and accomplices. One of the proportions of heuristic upgrade work process is Devil's quadrangle. Four primary measurements in the impacts of overhaul gauges in Devil's quadrangle are time, cost, quality and adaptability. This model alludes that an upgrade of a work process diminishes the time required to finish the undertaking, it improves nature of the administration conveyed, and it improves the capacity of the work process by lessening the expense. Be that as it may, in this methodology, an impromptu creation in one measurement will prompt a debilitating impact on another measurement. The re-appropriating heuristic methodology for bigger exercises will prompt various outcomes dependent on the Devil's quadrangle.
Time-Throughput time is a significant idea. It alludes to the time it takes to complete an errand/venture from begin to end. The target may be to diminish the normal throughput time for the finish of the case. In the re-appropriating heuristic methodology, the downside for the decrease of the throughput time is that the case might be dynamic. Quality-The nature of the case can be seen both from the customer's and from the laborer's side. This alludes to outside quality and interior quality. The outer quality can be estimated as the customer's fulfillment with either the item or the procedure. Inner quality alludes to the state of working in the work process. Cost-The cost engaged with the case/venture is the principle factor that is considered by everybody to lessen the expense. The customer would haggle with the operator for giving diminished expense to the task. Flexibility- It is the capacity to respond to changes. It is imperative to recognize the adaptability of the work process from different measurements. The customer and the operator ought to have the option to adjust to the evolving pattern.
Tom is the quality control manager for the company XYZ. XYZ recently received some complaints about its product A's quality and the general manager Steve requested Tom to investigate it. To gain a better understanding of the production process, Tom decided to use p-chart to monitor and identify the assignable cause variations. For the next 8 working days, Tom collected 8 samples (each of the size 100 units) and found the following number of defects, 4, 6, 0, 1, 3, 5, 8, 3.
a. What is the defect rate for sample 2? Ignore the percentage sign, and round your answer to the nearest integer. For example, if your answer is 12.34%, input 12.
Your answer is .
b. What is p-bar? Ignore the percentage sign, and round your answer to two decimals. For example, if your answer is 12.34%, input 12.34. (Note that this is different from question a.)
Your answer is .
c. What is sigma? Ignore the percentage sign, and round your answer to two decimals. For example, if your answer is 12.34%, input 12.34.
Your answer is .
d. What is upper control limit UCL for this p-chart? Ignore the percentage sign, and round your answer to two decimals. For example, if your answer is 12.34%, input 12.34.
Your answer is .
e. What is lower control limit LCL? (If LCL is negative, input 0) Ignore the percentage sign, and round your answer to two decimals. For example, if your answer is 12.34%, input 12.34. If your answer is -1.234%, input 0.
Your answer is .
f. How many outlier(s) is(are) identified? Round your answer to the nearest whole number. For example, if the answer is 3.12, input 3.
Your answer is
Answer:
Answer a= Defect rate of sample 2= 6/100 =6
Answer b=
Data % defect % defect
4 4/800 0.005
6 6/800 0.0075
0 0/800 0
1 1/800 0.00125
3 3/800 0.00375
5 5/800 0.00625
8 8/800 0.01
3 3/800 0.00375
Sum 0.0375
p bar =0.0375
Answer c= sigma = [p bar(1-p bar) / sample size]]0.5
Sigma = (0.0375*(1-0.0375)/100)^0.5 =0.019
Answer d= UCL=p bar + 3*(Estimated standard deviation) = 0.0375+3*0.019 =0.0945
Answer e= LCL=p bar - 3*(Estimated standard deviation) =0.0375-3*0.019 =-0.0195=0
Kelvie Inc. is a manufacturing company and held the following investments during 2012. Show how each investment would impact/change Kelvie’s 2012 year-end financial statements using the template provided on Blackboard. Indicate the type of activity for each line reported on the Statement of Cash Flows.Kelvie Inc. purchased Mao & Co.’s 5-year, 5%, $100,000 bond. The bond was purchased on January 1, 2012 for $95,788 to yield 6% interest. The bond pays annual interest on December 31. Kelvie intends to hold the bond to maturity. At December 31, 2012, the bond had a fair market value of $96,500.Kelvie Inc. purchased 6,000 shares of Dalton Ltd. common stock at a cost of $255,000 on July 31, 2012. These shares do not give Kelvie significant influence over Dalton. On October 31, 2012, Dalton Ltd. paid a $2 per share cash dividend. At December 31, 2012, Dalton Ltd. was trading at $40 a share.On January 1, 2012, Kelvie Inc. invested in ASP Industries by acquiring 30% of ASP’s outstanding stock for $21,500,000. During 2012, ASP Industries reported net income of $5,000,000 and paid cash dividends totaling $1,000,000. At December 31, 2012, ASP Industries had a market value of $75,000,000. Note: Ignore any excess price issues.
Answer:
Explanation:
Investments Impact in Type of activity
financial statement
1 Purchase of Mao &Co's Increase the investments Investing
bond of $ 100,000 in Balance sheet activity
Cost of bond $ 95788 Debit to the investments
account $ 95,788
Annual interest on Credit to the income account
Bond of $ 5000 - interest income
No impact of fair market value
in financial statement
2 Purchase of 6000 Debit $ 255,000 to the Investing activity
shares of Dalton ltd investment account
Receipt of dividend Credit $ 12,000 to the
dividend income account
3 Acquisition of 30% Debit $ 21,500,000 to the Investing activity
ASP's outstanding stock investment account
Receipt of dividend Credit $ 1,000,000 to the
dividend income account
The payback method is often more useful than the net present value method for evaluating systems projects because the effective lives of information system tend to be short and shorter payback projects are often desirable.
True/False
Answer:
True
Explanation:
Payback method considers the time that a project takes to payback the capital invested in it from its net cash flows.
Projects that have a short payback period are preferred by investors because the capital invested takes a shorter time to be repaid. That is shorter risk period.
Net present value is a consideration of the expected future cash flows in a project. It is the difference between the net present value of an asset and the present value of cash flows over a certain period. It's calculation is based on a lot of assumptions so it is probe to error.
Payback method is preferred because the effective lives of information system tend to be short and shorter payback projects are often desirable.
Answer:
True
Explanation:
The payback method of evaluating capital expenditure projects is very popular because it's easy to calculate and understand. It has severe limitations, however, and ignores many important factors that should be considered when evaluating the economic feasibility of projects.
In finance, the net present value or net present worth applies to a series of cash flows occurring at different times. The present value of a cash flow depends on the interval of time between now and the cash flow. It also depends on the discount rate. NPV accounts for the time value of money.
Payback method considers the time that a project takes to payback the capital invested in it from its net cash flows.
The payback method is often more useful than the net present value method for evaluating systems projects because the effective lives of information system tend to be short and shorter payback projects are often desirable.
Suppose Hubert and Kate form a cartel and behave as a monopolist. The profit-maximizing price is $ per gallon, and the total output is gallons. As part of their cartel agreement, Hubert and Kate agree to split production equally. Therefore, Hubert's profit is $ , and Kate's profit is $ .
Consider a town in which only two residents, Hubert and Kate, own wells that produce water safe for drinking. Hubert and Kate can pump and sell as much water as they want at no cost. For them, total revenue equals profit.
The following table shows the town's demand schedule for water,
Quantity Demanded Total Revenue (Dollars per gallon) (Gallons of water) (Dollars) $247.50 $450.00 $607.50 4.00 180 $720.00 $787.50 3.00 270 $810.00 $787.50 2.00 $720.00 $607.50 $450.00 $247.50 (Look at attached image for clearer image)
Answer:
$3, $810
Explanation:
By carefully examining the table above we can infer that Hubert and Kate's profit is maximised at $3 unit price.
The total output at this point is 270 with a total Revenue of $810, implying that they will share the amount equally 810/2= $405 for Kate and $405 for Hubert.
Hubert and Kate forming a cartel means they behave as a monopoly, choosing an output at which marginal cost equals marginal revenue. Given the average cost equals the marginal cost, they would split the positive economic profit. However, in reality, collusion such as this often leads to overproduction and lesser profits due to the prisoner's dilemma.
Explanation:In instances where firms like Hubert and Kate's form a cartel, they effectively behave as a
monopoly
. The cost and profit dynamics of monopolies are such that they attempt to maximize profit by choosing an output where the Marginal Cost (MC) equals Marginal Revenue (MR). The monopoly price is ascertained by drawing a line from this output quantity up to the demand curve. If indeed the cost remains steady (i.e., marginal cost curve is horizontal), average cost is the same as marginal cost. Thus, the joint profit to be shared by Hubert and Kate, would be calculated as the rectangle's area equating the monopoly quantity and the difference between the demand price and the average cost. In a
perfectly competitive market
, the forces of competition would likely erode these supernormal profits over time. However, barriers to entry often ensure that monopolists retain their profits.
To calculate total revenue, total cost, and profit:The total revenue would be the total price that consumers are willing to pay, times the quantity sold. Total cost is simply the quantity produced multiplied by the average cost. The profit is found by subtracting total cost from total revenue.
In real-world scenarios, this monopolistic cooperation is often likened to the prisoner's dilemma. Even though firms could theoretically cooperate to maximize combined profits, they often end up overproducing and earning less as a result.
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Linda Day George Company had bonds outstanding with a maturity value of $300,000. On April 30, 2014, when these bonds had an unamortized discount of $10,000, they were called in at 104. To pay for these bonds, George had issued other bonds a month earlier bearing a lower interest rate. The newly issued bonds had a life of 10 years. The new bonds were issued at 103 (face value $300,000). Issue costs related to the new bonds were $3,000.Ignoring interest, compute the gain or loss. (Round answer to 0 decimal places, e.g. 38,548.)Loss on redemption $Linda Day George Company had bonds outstanding witIgnoring interest, record this refunding transaction. (Round answers to 0 decimal places, e.g. 38,548. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)Account Titles and ExplanationDebitCreditLinda Day George Company had bonds outstanding witLinda Day George Company had bonds outstanding witLinda Day George Company had bonds outstanding witLinda Day George Company had bonds outstanding witLinda Day George Company had bonds outstanding witLinda Day George Company had bonds outstanding witLinda Day George Company had bonds outstanding witLinda Day George Company had bonds outstanding witLinda Day George Company had bonds outstanding witLinda Day George Company had bonds outstanding witLinda Day George Company had bonds outstanding witLinda Day George Company had bonds outstanding wit(To record redemption of bonds payable.)Linda Day George Company had bonds outstanding witLinda Day George Company had bonds outstanding witLinda Day George Company had bonds outstanding witLinda Day George Company had bonds outstanding witLinda Day George Company had bonds outstanding witLinda Day George Company had bonds outstanding witLinda Day George Company had bonds outstanding witLinda Day George Company had bonds outstanding witLinda Day George Company had bonds outstanding witLinda Day George Company had bonds outstanding witLinda Day George Company had bonds outstanding witLinda Day George Company had bonds outstanding wit
Answer:
Explanation:
Attach is the solution
SAP Inc. received a $1 million grant under its Small Business Innovation program. SAP invested the grant money and developed a system to remove metal contaminants from storm water in shipyards. The firm estimates that each shipyard spends $500,000 a year on storm water clean-up efforts. If SAP is able to sign up and retain four shipyards from the first year onwards, what is the present value (PV) of the project (net of investment) if the cost of capital for SAP is 20% per year
Answer:
$4,000,000
Explanation:
The computation of the present value of the project is shown below:
Since it is given that for four shipyards and it is signed
Therefore,
Total revenue = $500,000 × 4 = $2,000,000
And we assume
Cost of operations and other costs is
= 50% of revenue
= $1,000,000
Now
Net revenue is
= $2,000,000 - $1,000,000
= $1,000,000
So, the present value of the project is
= Present Value of net revenues - Initial cost
= ($1,000,000 ÷ 0.20) - $1,000,000
= $4,000,000
A message using the indirect writing strategy ________. provides the explanation before the bad news is usually shorter than one using the direct method uses ambiguous language to cushion the effect of the bad news restates company policy
Answer:
The correct answer is letter "A": provides the explanation before the bad new.
Explanation:
The indirect method of writing messages imply providing details of speech first and end with the conclusion of the matter. This is achieved using passive voice and subordinate sentences. This strategy is more often used while providing bad news to give the audience the reasons why the bad news is taking place. Otherwise, it is more likely that people will be discouraged to find information on the reasons for bad news if it is provided at the beginning of the message.
An indirect writing strategy provides the context before the bad news, often using language that is clear but softened to consider the reader's feelings and potentially to reduce backlash. It includes an explanation and could contain modal verbs and rhetorical strategies.
Explanation:A message using the indirect writing strategy typically provides the explanation before delivering any bad news. This approach is taken to prepare the reader for the upcoming negative information and often includes an explanation of the context or reasoning behind the decision. Indirect strategies can involve subtly downplaying the bad news or presenting it after a detailed explanation.
When crafting an indirect message, it is essential to maintain a balance in communication. One should fairly represent uncertainty while conveying credible concern, avoiding language that may appear to 'boss' the reader. It can be helpful to include modal verbs such as 'may,' 'might,' 'could,' which introduce a degree of uncertainty and soften the impact of the message.
An indirect writing strategy is characterized by a clear, but sometimes carefully phrased, language that considers the reader's feelings. The use of rhetorical strategies such as parallelism and repetition may be observed, although they must be used more judiciously compared to other forms of writing. This method is also likely to be longer than the direct method because it includes more background and justification before getting to the point.
The banking system currently has $50 billion of reserves, none of which are excess. People hold only deposits and no currency, and the reserve requirement is 10 percent. If the Fed raises the reserve requirement to 12.5 percent and at the same time sells $10 billion worth of bonds, then by how much does the money supply change?
Answer:
Total money supply charge is $180billion
Explanation:
See attached files
The money supply decreases by $1.25 billion.
Explanation:The change in money supply can be calculated by considering the change in required reserves. Initially, required reserves are $5 billion (10% of $50 billion). If the reserve requirement is increased to 12.5%, the new required reserves will be $6.25 billion (12.5% of $50 billion). This means that an additional $1.25 billion of reserves must be held, which reduces the excess reserves by the same amount. Since the money supply is equal to the sum of currency in circulation and deposits, and there is no change in currency in this scenario, the money supply will decrease by $1.25 billion.
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Both Bond Bill and Bond Ted have 11.2 percent coupons, make semiannual payments, and are priced at par value. Bond Bill has 4 years to maturity, whereas Bond Ted has 21 years to maturity. Both bonds have a par value of 1,000. If interest rates suddenly rise by 3 percent, what is the percentage change in the price of these bonds
Answer:
3.33% increase in the price of bond.
Explanation:
Price of the bond is the present value of all cash flows of the bond. These cash flows include the coupon payment and the maturity payment of the bond. Price of the bond is calculated by following formula:
According to given data
Price at par means the the bond have face equal to par which is $1,000 and the yield to maturity is also equals to the the coupon rate.
Coupon payment = C = $1,000 x 11.2 = $112 annually = $56 semiannually
Number of periods = n = 2 x 4 years = 8 periods
As the interest rate rises by 3%
Revised discount rate = r = 11.2% + 3% = 14.2 annually = 7.1% semiannually
Price of the Bond = $56 x [ ( 1 - ( 1 + 7.1% )^-8 ) / 7.1% ] + [ $1,000 / ( 1 + 7.1% )^8 ]
Price of the Bond = 455.63 + $577.68 = 1,033.31
Change in price = $1,033.31 - $1,000 = $33.31
Percentage change = $33.31 / $1,000 = 0.03331 = 3.33%
Answer:
Bond Bill = (value of bond - par value) / par value
= ( 910.78 - 1000) / 1000 = -0.0892 = -8.92%
Bond Ted = ( $800 - $1000 ) / $1000 = -0.1994 = -19.94%
Explanation:
The value of coupon rate for both bonds = 11.2 %
when there is an increase of 3% coupon rate = 14.2%
percentage change in the value of the bonds =
( value of bond - par value) / par value
value of bond = present value of coupon + present value of face value
the semiannual coupon payments = (1000 * 11.20) / 2 = $56
semi-annual coupon rate when increased = 14.20% / 2 = 7.10%
number of payments for Bond bill = 4 years * 2 = 8
number of payments for Bond Ted = 21 years * 2 = 42
value of Bond Bill = $56 * ( PVIFA*7,10% *8 ) + $1000 * (PVIFA*7.10%*8 )
= $910.78
Value of Bond Ted = $56 * (PVIFA*7.10%*42 ) + $1000 * ( PVIFA * 7.10%*42)
= $800.58
calculate the individual percentage change in value of each bonds
Bond Bill = (value of bond - par value) / par value
= ( 910.78 - 1000) / 1000 = -0.0892 = -8.92%
Bond Ted = ( $800 - $1000 ) / $1000 = -0.1994 = -19.94%
Helix Company has been approached by a new customer to provide 2,000 units of its regular product at a special price of $6 per unit. The regular selling price of the product is $8 per unit. Helix is operating at 75% of its capacity of 10,000 units. Identify whether the following costs are relevant to Helix's decision as to whether to accept the order at the special selling price. No additional fixed manufacturing overhead will be incurred because of this order. The only additional selling expense on this order will be a $0.50 per unit shipping cost. There will be no additional administrative expenses because of this order Calculate the operating income from the order Relevant Not Relevant Relevant Revenues Costs Revenue (cost) per unit a. Selling price b. Direct materials cost C. Direct labor cost d. Variable manufacturing overhead e. Fixed manufacturing overhead f. Regular selling expenses g. Additional selling expenses h. Administrative expenses 6.00 (2.00) (0.75) (0.50) (0.60) 2,000 Total operating income(loss) from special order Based on financial considerations alone, should Helix accept this order at the special price?
Answer:
1.)
Selling price - Relevant
Direct materials cost - Relevant
Direct labor cost - Relevant
Variable manufacturing overhead - Relevant
Fixed manufacturing overhead - Not relevant
Regular selling expenses - Not relevant
Additional selling expenses - Relevant
Administrative expenses - Not relevant
2.) Helix should accept the deal, with a net operating income of $2,000
Explanation:
Explanation to Question 2 can be found in the attached picture
The analysis of Helix Company's special order decision shows that accepting the order at a special price of $6 per unit results in a positive operating income of $3,300. Therefore, it is financially advantageous for Helix to accept this order, as the relevant costs are outweighed by the revenue generated.
The question involves determining the financial impact of accepting a special order below the regular selling price and identifying which costs are relevant to Helix Company's decision-making process. The analysis should consider only those costs and revenues that change as a result of accepting the order. Here, the relevant costs include the selling price of $6 per unit, direct material, direct labor, variable manufacturing overhead, and the additional selling expense of $0.50 per unit for shipping. Fixed manufacturing overhead and administrative expenses are not relevant since they do not change with the order. The calculation of operating income from this special order involves subtracting the relevant per-unit costs from the special selling price and multiplying by the number of units (2,000).
To calculate the total operating income from the special order:
Relevant revenue: $6.00 x 2,000 units = $12,000Total relevant costs = ($2.00 + $0.75 + $0.50 + $0.60 + $0.50) x 2,000 units = $8,700Total operating income from the order = $12,000 - $8,700 = $3,300Since the special order generates positive operating income without increasing fixed costs or administrative expenses, it is financially beneficial for Helix to accept the order.
A flexible budget: Multiple Choice presents a statement of expectations for a period of time but does not present a firm commitment. presents the plan for only one level of activity and does not adjust to changes in the level of activity. classifies budget requests by activity and estimates the benefits arising from each activity. presents the plan for a range of activity so that the plan can be adjusted for changes in activity levels.
Answer:
presents the plan for a range of activity so that the plan can be adjusted for changes in activity levels.
Explanation:
A flexible budget presents the plan for a range of activity so that the plan can be adjusted for changes in activity levels.
In order to ensure the flexibility of a budget, it is usually updated to reflect the actual level of activity during the period and this helps to compare actual results with respect to the budget based on the actual activity over a period of time.
At the beginning of the year, manufacturing overhead for the year was estimated to be $285,690. At the end of the year, actual direct labor-hours for the year were 30,500 hours, the actual manufacturing overhead for the year was $373,620, and manufacturing overhead for the year was overapplied by $18,000. If the predetermined overhead rate is based on direct labor-hours, then the estimated direct labor-hours at the beginning of the year used to calculate the predetermined overhead rate was:
Answer:
the estimated direct labor-hours at the beginning of the year used to calculate the predetermined overhead rate was 22,250 hours
Explanation:
Manufacturing overheads are allocated to production on a predetermined basis as no business can wait to know its profit to properly allocate costs to the products sold.
It is usually based on a certain predetermined activity level (usually direct labour hours) which is then coated into the product material and labor costs to determine its manufacturing costs.
We are told the Actual overhead was over applied by $18,000, and the Actual Manufacturing overhead was $373,620.
This implies the Overhead charged to production was;
$373,620 + $18,000 = $391,620
At an activity level of 30,500 direct labor hours.
The Predetermine direct labour rate is:
$391,620 / 30,500 = $12.84
And this implies the direct labor hours at the beginning of the year is
$285,690 divided by $12.84 = 22,250 hours
A toy manufacturer uses approximately 32,000 silicon chips annually. The chips are used at a steady rate during the 240 days a year that the plant operates. Annual holding cost is $3 per silicon chip. The optimal ordering quantity is 1600 chips per order. a. What is the total annual carrying cost under the optimal inventory management policy?
Answer:
$2,400
Explanation:
The computation of the total annual carrying cost is shown below:
The total Annual Carrying cost = Average Inventory × Holding cost per chip
= (1,600 chips ÷ 2) × $3
= $2,400
First we simply find out the average inventory by dividing the optimal ordering quantity by 2 and then it multiplied with the holding cost per chip so that the correct amount could arrive
A downtown bank is advertising that if you deposit $1,000 with them, and leave it there for 65 months, you can get $2,000 back at the end of the period. Assuming monthly compounding, what is the interest rate paid by the bank
Answer:
Rate of interest = 1.07% (Approx)
Explanation:
Given:
Future deposit value (FV) = $2,000
Present deposit value (PV) = $1,000
Total number of period (n) = 65 month
Rate of interest (r) = ?
Computation of Rate of interest :
[tex]Future\ deposit\ value = PV(1+r)^n[/tex]
[tex]2,000=1,000(1+r)^{65}[/tex]
[tex]\frac{2,000}{1,000} =(1+r)^{65}[/tex]
[tex]2 =(1+r)^{65}[/tex]
[tex]1+r = 1.01072086[/tex]
[tex]r = 1.01072086-1\\\\r = 0.01072086[/tex]
r = 1.072086%
Rate of interest = 1.07% (Approx)
A project is composed of many elements and includes a variety of tools to manage all of the elements of the project. Which of the following best defines the relationship between organizational culture and estimating?
M. Cotteleer Electronics supplies microcomputer circuitry to a company that incorporates microprocessors into refrigerators and other home appliances. One of the components has an annual demand of 250 units, and this is constant throughout the year. Carrying cost is estimated to be $1 per unit per year, and the ordering (setup) cost is $20 per order.
To minimize cost, how many units should be ordered each time an order is placed?
Answer:
Order size per time = 100 units
Explanation:
To minimize cost, M Cotteleer Electronics Supplies should adopt the EOQ.
The Economic Order Quantity (EOQ) is the order size that minimizes the balance of ordering cost and holding cost. At the EOQ, the carrying cost is equal to the holding cost.
It is computed using he formula below
EOQ = √ (2× Co× D)/Ch
C0- ordering cost per order- 20, Ch-carrying cost per per unit per annum- $1, D- annual demand 250 units
EOQ= √ (2× 20× 250)/1
=100 units
To minimise cost, the M Cotteleer Electronics Supplies should order 100 units per time
Four grams of musk oil are required for each bottle of Mink Caress, a very popular perfume made by a small company in western Siberia. The cost of the musk oil is $1.90 per gram. Budgeted production of Mink Caress is given below by quarters for Year 2 and for the first quarter of Year 3.
Y2 First Y2 Second Y2 Third Y2 Fourth Y3 First
Budgeted production, in bottles 96,000 126,000 186,000 136,000 104,000
Required:
Prepare a direct materials budget for musk oil, by quarter and in total, for Year 2.
Answer and Explanation:
The preparation of Direct material budget is shown below:-
First Second Third Fourth Year
Required production
in units of
Finished Goods $96,000 $126,000 $186,000 $136,000 $544,000
Units of raw material
needed per unit of
Finished Goods 4 4 4 4 4
Units of raw material
needed to meet
production $384,000 $504,000 $744,000 $544,000 $2,176,000
Add: Desired ending
Finished goods $100800 $148,800 $108,800 $84,800 $84,800
Total units of
Raw material
needed $484,800 $652,800 $852,800 $628,800 $2,260,800
Less: Beginning
inventory ($76,800) ($100,800) ($148,800) ($108,800) ($76,800)
Units of raw material
to be purchased $408,000 $552,000 $704,000 $520,000 $2,184,000
Units cost of Raw
Material $1.90 $1.90 $1.90 $1.90 $1.90
Cost of Raw Material
Purchased $775,200 $1,048,800 $1,337,600 $988,000 $4,149,600
In total for Year 2, the direct materials budget for musk oil is:
[tex]\[ \$729,600 + \$957,600 + \$1,411,600 + \$1,035,200 = \$4,133,000 \][/tex]
To prepare a direct materials budget for musk oil for Year 2, we need to calculate the total quantity of musk oil required for each quarter based on the budgeted production of Mink Caress perfume and then multiply it by the cost per gram of musk oil. Let's break it down quarter by quarter:
1. **First Quarter (Y2 First):**
- Budgeted production: 96,000 bottles
- Musk oil required per bottle: 4 grams
- Total musk oil required: [tex]\( 96,000 \times 4 = 384,000 \)[/tex] grams
2. **Second Quarter (Y2 Second):**
- Budgeted production: 126,000 bottles
- Musk oil required per bottle: 4 grams
- Total musk oil required: [tex]\( 126,000 \times 4 = 504,000 \)[/tex]grams
3. **Third Quarter (Y2 Third):**
- Budgeted production: 186,000 bottles
- Musk oil required per bottle: 4 grams
- Total musk oil required: [tex]\( 186,000 \times 4 = 744,000 \)[/tex] grams
4. **Fourth Quarter (Y2 Fourth):**
- Budgeted production: 136,000 bottles
- Musk oil required per bottle: 4 grams
- Total musk oil required: [tex]\( 136,000 \times 4 = 544,000 \)[/tex] grams
Now, let's calculate the cost of musk oil for each quarter and in total for Year 2:
- Cost per gram of musk oil: $1.90
1. **First Quarter (Y2 First):**
- Total musk oil required: 384,000 grams
- Cost of musk oil: [tex]\( 384,000 \times \$1.90 = \$729,600 \)[/tex]
2. **Second Quarter (Y2 Second):**
- Total musk oil required: 504,000 grams
- Cost of musk oil: [tex]\( 504,000 \times \$1.90 = \$957,600 \)[/tex]
3. **Third Quarter (Y2 Third):**
- Total musk oil required: 744,000 grams
- Cost of musk oil: [tex]\( 744,000 \times \$1.90 = \$1,411,600 \)[/tex]
4. **Fourth Quarter (Y2 Fourth):**
- Total musk oil required: 544,000 grams
- Cost of musk oil:[tex]\( 544,000 \times \$1.90 = \$1,035,200 \)[/tex]
In total for Year 2, the direct materials budget for musk oil is:
[tex]\[ \$729,600 + \$957,600 + \$1,411,600 + \$1,035,200 = \$4,133,000 \][/tex]
We have the following data for a hypothetical open economy: GNP = $9,0009,000 Consumption (C) = $7,5007,500 Investment (I) = $1,4001,400 Government Purchases (G) = $1,6001,600 Tax Collections (T) = $1,200what is the value of total savings S?what is the value of current account balance CA?
Answer:
-$100 and -$1,500
Explanation:
The computation is shown below:
As we know that
Total saving = Private saving + public saving
where,
Private saving is
= Y - T - C
= $9,000 - $1,200 - $7,500
= $300
And, public saving is
= T - G
= $1,200 - $1,600
= -$400
So, the total saving is
= $300 - $400
= -$100
And, the value of current account balance is
= GNP - C - I - G
= $9,000 - $7,500 - $1,400 - $1,600
= -$1,500
Final answer:
To calculate Country A's GDP, sum up Consumption, Investment, Government Purchases, and net Exports, resulting in a GDP of $3,030 billion.
Explanation:
The Gross Domestic Product (GDP) of a country can be calculated using the formula: GDP = Consumption (C) + Investment (I) + Government Purchases (G) + (Exports (X) - Imports (M)). For Country A, given the data: Consumption (C) is $2,000 billion, Investment (I) is $50 billion, Government Purchases (G) are $1,000 billion, Exports (X) are $20 billion, and Imports (M) are $40 billion, the GDP calculation would be:
GDP = C + I + G + (X - M) = $2,000 billion + $50 billion + $1,000 billion + ($20 billion - $40 billion) = $3,030 billion.
Thus, the dollar value of GDP for Country A would be $3,030 billion.
Jones, who is currently unemployed, is a participant in three means-tested welfare programs: food stamps, rent stamps, and day care stamps. Each program grants him $150 per week in stamps, which can be used like cash to purchase the good or service they cover. a. If benefits in each program are reduced by 40 cents for each additional dollar Jones earns in the labor market, how will Jones’s economic position change if he accepts a job paying $120 per week? Jones would be by $ 24 per week. b. Using your findings in part a, the effective marginal tax rate on Jones's earnings from this job would be .
Answer:
(a) J was at first getting $450 for example $150 from every mean tried program. Presently as he begins winning, he will lose $0.40 from each program for each dollar earned. As his gaining is $120, so the decrease in from one program will be 0.4x 120 = $48 and all out decrease in pay from each of the three projects is 3x 48 = $144 . Consequently, it tends to be seen that he is procuring $120 yet losing $144. Along these lines, he is at loss of $24 on the off chance that he acknowledges the activity.
(b) When individuals are getting pay for not doing anything then the opposition towards working increments. The model above shows that there are situations when member is at genuine fiscal misfortune on the off chance that he joins a vocation which is an extremely solid disincentive for working. In this way, these methods tried projects will in general decrease the motivating force of doing tasks and working.
If Jones accepts a job paying $120 per week, his economic position will change by $72 per week. The effective marginal tax rate on Jones's earnings from this job would be 40%.
Explanation:To calculate how Jones's economic position will change if he accepts a job paying $120 per week, we need to determine the change in his benefits from the welfare programs. Each program grants him $150 per week, but benefits are reduced by 40 cents for each additional dollar he earns in the labor market. Therefore, for each dollar he earns, his benefits are reduced by 40 cents. If he accepts the job paying $120 per week, he will earn an additional $120 and his benefits will be reduced by $48 (40% of $120).
Therefore, Jones's economic position will change by $120 - $48 = $72 per week. He will be $72 per week better off than if he were unemployed and solely relying on welfare benefits.
The effective marginal tax rate on Jones's earnings from this job can be calculated by dividing the reduction in benefits ($48) by the increase in earnings ($120). This gives us a marginal tax rate of 40% ($48 / $120 = 0.4). Therefore, the effective marginal tax rate on Jones's earnings from this job would be 40%.
Suppose Tim and Alyssa are playing a game in which both must simultaneously choose the action Left or Right. The payoff matrix that follows shows the payoff each person will earn as a function of both of their choices. For example, the lower-right cell shows that if Tim chooses Right and Alyssa chooses Right, Tim will receive a payoff of 9 and Alyssa will receive a payoff of 5.
Alyssa
Left Right
Tim Left 6, 6 8, 5
Right 3, 6 9, 5
The only dominant strategy in this game is for _____ to choose ______ .
The outcome reflecting the unique Nash equilibrium in this game is as follows: Tim chooses _____ and Alyssa chooses _________
Alyssa
Left Right
6,6 8,5
3,6 9,5
Answer:
1. The only dominant strategy in this game is for Alyssa to choose left.
2. Tim chooses right and Alyssa chooses right.
Explanation:
A dominant strategy is that strategy that always provides the best outcome for a player regardless of what the opponent's strategy is.
Nash equilibrium is a set of strategies, one for each player, such that no player has incentive to change his or her strategy given what the other players are doing.
Now in this game, the dominant strategy is for Alyssa to choose left. If Tim chooses left Alyssa will choose left to earn a payoff of 6. If Tim chooses right the Alyssa will still choose left to earn a payoff of 6. Whatever strategy Tim uses, Alyssa continues to pick left.
Let us consider if there's a dominant strategy for Tim. When Alyssa chooses left Tim chooses left to earn a higher payoff of 6 instead of 3. If Alyssa chooses right then Tim will choose right to earn a payoff of 9 which is higher than 8 (if he had chosen left), we can therefore conclude Tim has no dominant strategy, as his decisions are based on what Alyssa does.
The outcome reflecting the unique Nash equilibrium in this game is as follows: Tim chooses right and Alyssa chooses right. There's no incentive to change at this point.
On May 7, Juanita Construction provides services on account to Michael Wolfe for $4,000. Michael pays for those services on May 13. Required: For Juanita Construction, record the service on account on May 7 and the collection of cash on May 13.
Explanation:
May 7
Credit sales of $4,000 which means accounts receivable will increase by $4,000 and Sales revenue will also raise b y the same amount
May 13
Collection on account of May 7th sales which means the account receivable will go down by $4,000 and cash will increase by $4,000
Journal entries
DATE Particulars Amount
May 7th Account receivable (+A) Dr. $4,000
to Sales revenue (+Equity) $4,000
( To record the credit sales)
May 13th Cash (+A) Dr. $4,000
to Accounts receivable(-A) $4,000
(To record the receipt of cash)
When Juanita Construction provides services on credit, they increase Accounts Receivable and Service Revenue by the same amount. When the customer pays, they decrease Accounts Receivable by the payment amount and increase Cash by the same amount.
Explanation:On May 7, Juanita Construction would record a debit (increase) to Accounts Receivable for $4,000 and a credit (increase) to Service Revenue for $4,000. This is because the company has provided a service on account, meaning they have earned revenue but have not yet collected the cash.
On May 13, when Michael Wolfe pays, Juanita Construction would record a debit (increase) to Cash for $4,000 and a credit (decrease) to Accounts Receivable for $4,000. This reflects the collection of cash, reducing the amount outstanding in the accounts receivable.
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Assuming that total dividends declared in 2017 were $64,000, and that the preferred stock is not cumulative but is fully participating, common stockholders should receive 2017 dividends of what amount?
Common stockholders should receive $
Answer:
$40,235
Explanation:
Dividend distributed to preferred share is based on the predetermined rate associated with these share. When the dividend is declared preferred share dividend is paid first. The remainder is distributed between the common stockholders.
Dividend Declared = $64,000
Preferred Dividend = $100,000 x 7% = $7,000
Participation
Preferred Shares = $100,000 / $20 = 5,000 shares
Common shares = 12,000 shares
Total Shares = 12,000 + 5,000 = 17,000 shares
on Pro-rata basis
Participation dividend to preferred stockholder = ($64,000 - $7,000) x 5000 / 17000 = $16,765
Dividend to common stock holders = $64,000 - $7,000 - $16,765 = $40,235
Consider a town in which only two residents, Kevin and Maria, own wells that produce water safe for drinking. Kevin and Maria can pump and sell as much water as they want at no cost. For them, total revenue equals profit. The following table shows the town's demand schedule for water.
Price Quantity Demanded Total Revenue
(Dollars per gallon) (Gallons of water) (Dollars)
6.00 0 0
5.50 45 $247.50
5.00 90 $450.00
4.50 135 $607.50
4.00 180 $720.00
3.50 225 $787.50
3.00 270 $810.00
2.50 315 $787.50
2.00 360 $720.00
1.50 405 $607.50
1.00 450 $450.00
0.50 495 $247.50
0 540 0
Suppose Kevin and Maria form a cartel and behave as a monopolist. The profit-maximizing price is $
––––– per gallon, and the total output is
––––– gallons. As part of their cartel agreement, Kevin and Maria agree to split production equally. Therefore, Kevin's profit is $
––––– .
Suppose Kevin and Maria form a cartel and behave as a monopolist. The profit-maximizing price is $
––––– per gallon, and the total output is
––––– gallons. As part of their cartel agreement, Kevin and Maria agree to split production equally. Therefore, Kevin's profit is $
––––– , and Maria's profit is $
––––– .
Suppose that Kevin and Maria have been successfully operating as a cartel. They each charge the monopoly price and sell half of the monopoly quantity. Then one night before going to sleep, Kevin says to himself, "Maria and I aren't the best of friends anyway. If I increase my production to 45 gallons more than the cartel amount, I can increase my profit even though her profit goes down. I will do that starting tomorrow."
After Kevin implements his new plan, the price of water
–––––––––– to $
––––– per gallon. Given Maria and Kevin's production levels, Kevin's profit becomes $
––––– and Maria's profit becomes $
––––– .
Because Kevin has deviated from the cartel agreement and increased his output of water to 45 gallons more than the cartel amount, Maria decides that she will also increase her production to 45 gallons more than the cartel amount.
After Maria increases her production, Kevin's profit becomes $
––––– , Maria's profit becomes $
––––– , and total profit (the sum of the profits of Kevin and Maria) is now $
––––– .
True or False: Based on the fact that both Kevin and Maria increase production from the initial cartel quantity, you know that the output effect was larger than the price effect at that quantity.
Note that Kevin and Maria started by behaving cooperatively. However, once Kevin decided to cheat, Maria decided to cheat as well. In other words, Maria's output decisions are based on Kevin's actions.
This behavior is an example of
–––––––––– .
Kevin and Maria initially form a profit-maximizing cartel, but when each independently increases production, the price falls and overall profits decrease. This behavior is an example of the 'prisoner's dilemma'.
Explanation:Suppose Kevin and Maria form a cartel and behave as a monopolist. The profit-maximizing price is $3 per gallon, and the total output is 270 gallons. As part of their cartel agreement, Kevin and Maria agreed to split production equally. Therefore, Kevin's profit and Maria's profit are $405 each, which is half the total revenue at the given price and quantity.
However, if Kevin increases his production by 45 gallons, the supply increases and the price falls to $2.5 per gallon. Given Kevin's increased production, his net profit is $446.25 (180 gallons × $2.5), and Maria's profit decreases to $393.75 (135 gallons× $2.5).
Assuming Maria responds in the same way and also increases her output by 45 gallons, the price falls further to $2 per gallon. Their profits then become $360 each (180 gallons × $2).
Therefore, based on the fact that both Kevin and Maria increase production from the initial cartel quantity, we can say that the output effect was larger than the price effect at that quantity. This behavior is an example of the 'prisoner's dilemma', prevalent in situations of strategic interdependence where each party's best move depends on what the other party does.
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Labor costs represent a large percentage of total costs for many firms. According to data from the Bureau of Labor Statistics, U.S. labor costs were up 2.0% in 2015, compared to 2014.
a. When labor costs increase, what happens to average total cost and marginal cost? Consider a case in which labor costs are only variable costs and a case in which they are both variable and fixed costs. An increase in labor productivity means each worker can produce more output. Recent data on productivity show that labor productivity in the U.S. nonfarm business sector grew by 1.7% between 1970 and 1999, by 2.6% between 2000 and 2009, and by 1.1% between 2010 and 2015.
b. When productivity growth is positive, what happens to the total product curve and the marginal product of labor curve? Illustrate your answer with a diagram.
c. When productivity growth is positive, what happens to the marginal cost curve and the average total cost curve? llustrate your answer with a diagram.
d. If labor costs are rising over time on average, why would a company want to adopt equipment and methods that increase labor productivity?
Answer: Labor cost is a representative of greater percentage of total cost for many firms. From the data of Bureau of Labor statistics, the U.S labour cost up to 2% in 2015 in comparison to 2014.
Explanation:
A. As labor increases, average total cost and marginal cost increases as well due to the fact that labor is part of total cost of production. If labor cost represents only variable cost when firms shut down, labor cost will be save but if it represents but variable and fixed cost, labor cost can't be avoided.
B. A positive productivity growth lead to a total product curve and marginal labor curve shift upward because total output and marginal product of labor curve increases.
C. A positive productivity curve will result in an downward shift of marginal cost curve and average total cost curve because average total cost and marginal cost decreases per output.
D. If labor cost are rising overtime on average. equipments, technologies and methods that increases labor productivity will be adopted in order for total output and marginal product of labour to increase.
Let's assume you are the beneficiary of your great Aunt's life insurance policy. Sadly she passed away yesterday. You elect to receive annual payments from this policy for the next 20 years. The settlement amount is $500,000 and the interest accruing on the policy is an annual 8%. What will be your annual life insurance annuity payments
Answer: The life insurance annuity payment is $50,926.10
Explanation:
GIVEN THE FOLLOWING ;
PRESENT VALUE(PV) = $500,000
INTEREST RATE (r) = 8% = 0.08
PERIOD (n) = 20 years
Recall, formula for ordinary annuity:
Annuity = (Rate × PV) ÷ ( 1 - (1 + r)^-n)
Annuity = (0.08 × $500,000) ÷ (1 - (1 + 0.08)^-n)
Annuity = ($40,000) ÷ (1 - (1.08)^-20)
Annuity = $40,000 ÷ 0.7854517925
Annuity = $50,926.10
Therefore, the life insurance annuity payment for 20 years at 8% interest rate will be $50,926.10
Answer:
The annual insurance annuity payment will be $50,926.10
Explanation:
To calculate the annual life insurance annuity, we use the following formula below.
Annuity = (Rate × PV) ÷ ( 1 - (1 + r)^-n)
We have the values been given in the question
Current (PV) = $500,000
Interest rate (r) = 8% /100= 0.08
Duration (n) = 20 years
Substituting the values in to the formula, we have;
Annuity payment = (0.08 × $500,000) ÷ (1 - (1 + 0.08)^-n)
Annuity payment = ($40,000) ÷ (1 - (1.08)^-20)
Annuity payment = $40,000 ÷ 0.7854517925
Annuity payment = $50,926.10
We have $50,926.10 as the annual insurance annuity payment
John and his wife Martha get a divorce. Per the divorce settlement contract, Martha agrees to pay John alimony in the amount of $5000 per month for his lifetime or until such time as he should remarry. When John remarries three years later his alimony benefits cease because:
Answer:
c) the condition subsequent has occurred;
Explanation:
Since in the question it is given that the John and his wife Martha get a divorce and according to the divorce settlement contract she agrees to pay the alimony to John for $5,000 per month for his lifetime or until that time when he should remarry
If John remarries after three years, so the alimony benefits is ceased because the subsequent condition has occurred due to which he will not get the amount further in the future
Kirnon Clinic uses client-visits as its measure of activity. During July, the clinic budgeted for 3,650 client-visits, but its actual level of activity was 3,590 client-visits. The clinic has provided the following data concerning the formulas to be used in its budgeting: Fixed element per monthVariable element per client-visit Revenue - $39.90 Personnel expenses$35,900 $11.10 Medical supplies 1,900 7.90 Occupancy expenses 8,900 1.90 Administrative expenses 5,900 0.10 Total expenses$52,600 $21.00 The activity variance for administrative expenses in July would be closest to: Multiple Choice $66 F $6 U $66 U $6 F
Answer:
$666 Favorable
Explanation:
The computation of Activity variance is shown below:-
For computing the activity variance first we need to compute the Planning budget and flexible budget
Planning budget = $35,900 + $11.10 × 3,650
= $76,415
Flexible budget = $35,900 + $11.10 × 3,590
= $75,749
Activity variable = Activity variance - Flexible budget
= $76,415 - $75,749
= $666 Favorable
Nielson Motors sold 10 million shares of stock in an SEO. The market price of Nielson's stock at the time was $37.50. Of the 10 million shares sold, 4 million shares were primary shares sold by the company, and the remaining 6 million shares were being sold by the venture capital investors. Assume the underwriter charges 4% of the gross proceeds as an underwriting fee which is shared proportionately between the primary and secondary shares.
Required:
1. The amount of money raised by Nielson Motors is closest to ____________.
Group of answer choices:a. $144 millionb. $150 millionc. $216 milliond. $219 million
Answer:
a. $144 million
Explanation:
The computation of the amount of money raised is shown below:
But before that we have to find out the amount raised and underwriting fees which is given below:
Amount raised by company is
= 4 million × $37.5
= $150 million
And,
underwriting fees is
= $150 million × 4%
= $6 million
So, amount raised by the company is
= $150 million - $6 million
= $144 million
We deduct the underwriting fees from the raised amount
Final answer:
Nelson Motors raised approximately $144 million after deducting underwriting fees. The company sold 4 million primary shares at $37.50 each, generating $150 million. A 4% underwriting fee of $6 million was subtracted to arrive at the final amount.
Explanation:
To calculate the amount of money raised by Nielson Motors, we need to determine the gross proceeds from the sale of both primary and secondary shares before underwriting fees are deducted. Then, we will calculate the underwriting fees and subtract them from the gross proceeds to find the net amount raised by the company.
The gross proceeds from the primary shares can be calculated as follows:
Number of primary shares sold: 4 millionMarket price per share: $37.50Gross proceeds from primary shares = (4 million shares) x ($37.50 per share) = $150 millionThe gross proceeds from the secondary shares, which are sold by the venture capital investors, are not part of the company's raised capital and are not needed for this calculation.
Next, we calculate the underwriting fee:
Underwriting fee rate: 4%Underwriting fee for primary shares = (4% of $150 million) = $6 millionHence, the net amount raised by Nielson Motors is:
Gross proceeds from primary shares - Underwriting fee = ($150 million - $6 million) = $144 millionTherefore, the answer is closest to $144 million, which is option (a).
Define how managerial accounting differs from financial accounting. Be sure to address the diverse users of managerial and of financial accounting and provide examples of how at least five users would utilize accounting information. Cost can be classified in 5 categories-behavior, traceability, controllability, relevance and function. Briefly explain each category. (Watch Accounting 2 - ACCT 122 - Program #223 - Managerial Accounting Concepts and Accounting 2 - ACCT 122 - Program #224 - Managerial Accounting Concepts - Continued Illustrate how managerial accounting information assists managers in performing the roles of planning, directing, and controlling by providing an example of each.
ANSWER:
Managerial accounting is the use of accounting information, to determine the best decision to take, inorder to better the organization, and bring in more profit.
While.
Financial accounting is reporting all financial transaction, by preparing a financial statement, which details out the inflow and outflow of money in the organization.
HOW TO USE ACCOUNTING INFORMATION:
1) Accounting Information are used by managerial accountants to determine the best business to invest more money into.
2) Accounting Information are used by financial accountant to report the profit or loss in the business of the company.
3) Accounting information are used by managerial accountant to decide which investment that should be added or removed from the portfolio, so that much profit will be achieved.
4) Accounting Information are used by financial accountant to calculate and tabulate it financial statement. Using statistical methods and accounting formulas.
5) Accounting Information are used by managerial accountant, to manage the returns in investment, and decide which investment, that will have the highest budget.
Traceability of cost means that all cost should be able to show what lead to it, why the cost is necessary, and the effect of the cost to the business.
Behavior of cost shows the way cost will change whenever they is a change in activities t looko lead to costing. A decrease in spending, will decrease the cost.
Controllability of Cost defines cost to be subject to the decision of how the business will be achieved. This shows that cost can be altered at anytime, to suit the need of the business.
Relevance of Cost defines cost to be used to show how relevant or irrelevant a cost can be to the business, which helps a manger to consider only the relevant cost in the business first.
Function of cost shows the amount invested in relation to the amount produced. It is represented in a cost curve, and is used to optimize the business of the organization.
Anthony's Bees is an Internet e-tailer that sells equipment to aspiring beekeepers. A complete starter kit in this competitive market sells for $900. Anthony's total costs are given by TC -30°, where Q is the number of starter kits he sells each month. The corresponding marginal cost of producing beehives is MC = 90°
a. What is Anthony's marginal revenue from selling another starter kit? MRES
b. How many starter kits should Anthony sell each year in order to maximize his profits? starter kits
c. How much profit will Anthony earn at this output level? Profit=$
d. Suppose Anthony is producing the quantity indicated in part b. If he decides to produce one more starter kit, what will his new profit be? Profit = $
e. The marginal revenue of producing one more starter kit
Answer:
a. $900
b. 10 starter kits
c. $6,000
d. $5,907
e. $900
Explanation:
THE CORRECT QUESTION FORMAT IS AS FOLLOWS;
Anthony's Bees is an Internet e-tailer that sells equipment to aspiring beekeepers. A complete starter kit in this competitive market sells for $900. Anthony's total costs are given by TC =[tex]3Q^{3}[/tex], where Q is the number of starter kits he sells each month. The corresponding marginal cost of producing beehives is MC = [tex]9Q^{2}[/tex]
a. What is Anthony's marginal revenue from selling another starter kit? MRES
b. How many starter kits should Anthony sell each year in order to maximize his profits? starter kits
c. How much profit will Anthony earn at this output level? Profit=$
d. Suppose Anthony is producing the quantity indicated in part b. If he decides to produce one more starter kit, what will his new profit be? Profit = $
e. The marginal revenue of producing one more starter kit
Solution is as follows;
a. From the question, we can identify that Anthony is a price taker and not a price decider. What this means is that he sell at industry determined price. Thus, selling an additional unit will give him a revenue equal to price ,so Marginal Revenue=$900
b. For a perfectly competitive firm, there will be an increase in output as long as Price >Marginal Cost or Price=Marginal Cost to maximize profit.
Thus;
we set
Marginal Cost=Price
[tex]9Q^{2}[/tex]=900
[tex]Q^{2}[/tex]=100
Q=10 starter kits
Hence, for Anthony to maximize his starter kits, he should sell 10 starter kits each year.
c. Total Cost(TC) =[tex]3Q^{3}[/tex]=3*[tex]10^{2}[/tex]=$3000
Total Revenue(TR) =P*Q=900*10=$9000
Profit= Total Revenue(TR) - Total Cost(TC) =9000-3000=$6000
d. If Anthony produces one extra unit of output.
His new quantity becomes Q=11
Total Cost(TC)=[tex]3Q^{3}[/tex]= 3 × [tex]11^{3}[/tex]=$3993
Total Revenue(TR) = P*Q= 900*11=$9900
Profit=TR-TC=9900-3993=$5907
Producing an additional unit of output will lead to a decrease in his output
e. The marginal revenue of producing an additional starter kit will be revenue at Q =11 minus revenue at Q=10
That is 9900-9000 = 900
This is same as the price of the starter kit i.e MR = P
Answer:
e. The marginal revenue of producing one more starter kit is 9900-9000 = 900
Hence, the marginal revenue is equal to the price of the starter kit i.e MR = P
Explanation:
find attached solution