Answer:
A) $6
Explanation:
The equilibrium price arises when the marginal cost of private i.e. demand is $12 and when the social production cost is to be considered then the equilibrium price is $18
So, to accomplish the social optimum, the government should set a tax of
= $18 - $12
= $6
This shifted the private marginal cost to the left and there is yield to the social optimum
Hence, the correct option is A. $6
b. What would be the effect of this purchase on income before income taxes using FIFO method?
Answer:
1. Net income decreases by $3,000
2. The amount of net income would be remains the same.
Explanation:
1. Under LIFO method
(i) Before 8,000 units purchased:
sales = 67,000 units
Cost of goods sold = Quantity × Price
= (66,000 × $13) + (1,000 × $10)
= $858,000 + $10,000
= $868,000
(ii) If 8,000 units purchased at $13 each then,
Cost of goods sold = Quantity × Price
= 67,000 × $13
= $871,000
As the cost of goods increases as a result there will be decrease in the net income before tax under LIFO method.
The amount of net income would be decreased by:
= $871,000 - $868,000
= $3,000
2. Under FIFO method:
(i) Before 8,000 units purchased:
sales = 67,000 units
Cost of goods sold = Quantity × Price
= (16,000 × $10) + (51,000 × $13)
= $160,000 + $663,000
= $823,000
(ii) If 8,000 units purchased at $13 each then,
Cost of goods sold = Quantity × Price
= (16,000 × $10) + (51,000 × $13)
= $160,000 + $663,000
= $823,000
As there will be no change in the cost of goods sold, so, there will be no change in the net income before tax under FIFO method.
The amount of net income would be remains the same.
b. 306
c. 500
d. 200
e. None of the above
Answer:
a. 300
d. 200
Explanation:
EOQ =
2 * 7500 * 30 / 0.5
EOQ = 948 units
When price is $48 per unit
EOQ = 968 units
Total cost = Holding cost + ordering cost + purchase cost
When the order is for 500 price is $48
Total cost = $2,400 + $30 + $24,000 = $26,430
When the order is for 300 price is $50
Total cost = $1,500 + $30 + $15,000 = $16,530
When the order is for 306 price is $50
Total cost = $1,530 + $30 + $15,300 = $16,860
When the order is for 200 price is $50
Total cost = $1,000 + $30 + $10,000 = $11,030
The best two possible order quantities are 200 and 300 which results in minimum total cost.
Answer:
d. may make some unrealistic assumptions in order to simplify a complex reality
Explanation:
In economics, a model is a conceptual structure that represents economic procedures through a number of variables and a series of rational or quantitative interactions. The economic model is a simpler framework intended to demonstrate complex structures that is often mathematical.
Answer:
$30,000
Explanation:
Calculation for the amount of equity income to reported
Using this formula
Equity income=[(Amount earned in 2012×(Outstanding common stock percentage +Additional percentage of Wiz)]
Let plug in the formula
Equity income = [($120,000 ×(15%+ 10%)]
Equity income = ($120,000 ×25%)
Equity income= $30,000
Therefore the amount of equity income to reported for 2012 will be $30,000
Direct labor $ 42,000
Manufacturing overhead $ 19,000
Selling expenses $ 22,000
Administrative expenses $ 35,000
1) What is the total amount of product costs?
2) What is the total amount of period costs?
3) What is the total amount of conversion costs?
4) What is the total amount of prime costs?
The total product cost is $141,000, total period cost is $57,000, total conversion cost is $61,000, and the total prime cost is $122,000.
In business terms, costs and expenses are categorized differently. The product costs are the costs involved directly in manufacturing a product, which include direct materials, direct labor, and manufacturing overhead. Therefore, the total product cost would be $80,000 (direct materials) + $42,000 (direct labor) + $19,000 (manufacturing overhead) = $141,000.
On the other hand, period costs are the costs that are not directly tied to a product, like selling and administrative expenses. Therefore, the total period cost is $22,000 (selling expenses) + $35,000 (administrative expenses) = $57,000.
Conversion costs are the costs of converting the raw materials into a finished product, these are direct labor and manufacturing overhead. So the conversion cost is = $42,000 (direct labor) + $19,000 (manufacturing overhead) = $61,000. The prime costs refer to the direct costs of production, these are direct materials and direct labor, prime cost = $80,000 (direct materials) + $42,000 (direct labor) = $122,000.
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