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gladu [14]
3 years ago
14

A competitive firm currently produces and sells 500 units of output. Its total revenue is $3,500; the marginal cost of producing

the 500th unit of output is $5.75; and the average total cost of producing the 500th unit of output is $4.00. Is the firm maximizing its profit, or should it increase or decrease output in order to increase its profit?
Business
1 answer:
Orlov [11]3 years ago
3 0

Answer: Reduce output

Explanation: Profit = Total Revenue – Total Costs

Therefore, profit maximization occurs therefore, profit maximization occurs at the most significant gap or the biggest difference between the total revenue and the total cost.

TC = AC×Q = $4×500 = $2,000

Theoretically, profit maximization occurs where MR = MC

From the forgoing, producing an extra unit will increase the cost of the company thereby reducing profit.

The company should reduced output to around 499 units or less

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Sunland Company developed the following data: Beginning work in process inventory $800000 Direct materials used 800000 Actual ov
Mashcka [7]

Answer:

total manufacturing cost = $2100000

Explanation:

given data

Beginning work in process inventory = $800000

Direct materials = 800000

Actual overhead = 1200000

Overhead applied = 900000

Cost of goods manufactured = 1300000

Ending work in process = 1600000

solution

we get here total manufacturing cost that is

total manufacturing cost = Cost of goods manufactured - Beginning work in process inventory + Ending work in process inventory   .........................1

put here value and we get

total manufacturing cost = 1300000 - 800000 + 1600000

total manufacturing cost = $2100000

5 0
3 years ago
What of the following kinds of contracts is the actual, final cost of the project unknown until after the project is completed (
Alexxx [7]

Answer:

3. cost plus incentive fee.

Explanation:

Cost plus incentive fee is a type of contract where final amount for the completion of project is unknown till the project is completed. This project has cost plus an additional benefit amount. Here seller can earn an additional amount if he meets a defined criteria mentioned in the contract.

Fixed price contract cost is defined at the start of project and it does not allow any adjustments in the cost later when the project is completed.

Cost plus fixed fee is a contract in which a contractor is paid complete cost related to the performance of duties in the contract plus an additional fixed fee as their additional bonus. Usually this is agreed at the inception of the contract.

7 0
3 years ago
The fastener division of Southern Fasteners manufactures zippers and then sells them to customers for $7.60 per unit. Its variab
andreev551 [17]

Answer:

The correct answer for option (a) is $2.6 and for option (b) is $7.19.

Explanation:

According to the scenario, the given data are as follows:

(a). If fastener division is not operating at full capacity,

then, opportunity cost = $0

Here, variable cost = $3.01

Fastener could avoid $0.41.

Then Variable cost = $3.01 - $0.41 = $2.6

So, we can calculate the minimum transfer price by using following formula:

Minimum transfer price = Variable cost + Opportunity cost

= $2.6 + $0

= $2.6

(b). If fastener division is operating at full capacity,

then, opportunity cost = $7.60 - $3.01 = $4.59

Here, variable cost = $3.01

Fastener could avoid $0.41.

Then Variable cost = $3.01 - $0.41 = $2.6

So, we can calculate the minimum transfer price by using following formula:

Minimum transfer price = Variable cost + Opportunity cost

= $2.6 + $4.59

= $7.19

7 0
2 years ago
Minden Company is a wholesale distributor of premium European chocolates. The company’s balance sheet as of April 30 is given be
Anettt [7]

Answer:(1a) schedule of cash collected $221,800, schedule of cash disbursement for merchandise purchase $118,900 (1b) cash budget closing balance $19,260 (2) Net income $26,410 (3) Balance sheet Total Asset $364,510, Total Liabilities &Equity $364,510

Explanation:

Schedule of cash collected

Sales. 257,000

Less:Cash sales. 77,100

------------

Credit sales. 179,900

Cash collected in May

Credit sales( 50% ) 77,100

Account Receivable 54,750

May sales (179,900 × 50%) 89,950

---------------

Total cash collected. 221,800

-------------------

Schedule of cash disbursements for merchandise

Cash paid for May purchases (121,000×40%) 48,400

Cash paid for April purchases. 70,500

--------------

Total purchase payment for May. 118,900

-----------------

Cash Budget

Opening balance. 9,600

Add: Receipt

Collection from customers 221,800

Bank loan. 22,000

--------------

Total cash available. 253,400

Less: Disbursements

Purchase payment 118,900

Selling Expenses. 83,700

Note payable. 18,100

Interest on Note payable 340

Purchase of refrigerating equipment 13,100

----------------

Total Disbursement. 234,140

----------------

Closing Balance. 19,260

----------------

Minden company

Budgeted income statements for the month of may

Sales. 257,000

Cost of good sold

Beginning inventory 53,750

Add: purchases. 121,000

---------------

Goods available for sale 174,750

Less: Ending inventory. 31,000

-------------

Cost of good sold. 143,750

----------------

Gross Margin. 113,250

Selling & Administrative Expenses

(83,700 + 2,800) 86,500

---------------

Net operating income. 26,750

Less: interest expense. 340

----------------

Net income. 26,410

------------------

Budgeted Balance sheet

Asset

Cash. 19,260

Account Receivable 89,950

Inventory. 31,000

Building & Equipment

Net of Deprecation.

(214,000 + 13,100 - 2,800) 224,300

-----------------

Total Asset. 364,510

------------------

Liabilities & Equity

Account Payable(121,000 × 60%) 72,600

Note payable. 22,000

Common Stock. 180,000

Retained Earnings( 63,500 + 26,410) 89,910

------------------

Total Liabilities & Equity. 364,510

------------------

8 0
3 years ago
Tumbling Haven, a gymnastic equipment manufacturer, provided the following information to its accountant. The company had net fi
LuckyWell [14K]

Answer: 145332

Explanation:

Current assets are the assets that a company has wgich are expected to either be sold or used during the next year and they iinclude cash, stock inventory, accounts receivable, marketable securities, cash equivalents, pre-paid liabilities, etc

It should be noted that:

Total asset = Current asset + $356190 + $4176

= Current asset + $360366

Long term debt + equity = 76445 + 200000 + 134461

= $410906

Current liabilities = $94,792

Since current liabilities= Total asset - (long term debt + equity)

$94,792 = (Current asset + $360366) - $410,906

Current asset = $94792 + $410906 - $360366

= $505698 - $360366

= $145,332

6 0
2 years ago
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