Suppose that a business incurred implicit costs of $400,000 and explicit costs of $4 million in a specific year. If the firm sold 100,000 units of its output at $48 per unit, its accounting8.Multiple ChoiceeBook() profits were $400,000 and its economic profits were $0.losses were $0 and its economic losses were $800,000.profits were $400,000 and its economic profits were $800,000.profits were $800,000 and its economic profits were $400,000.McGrawHill< Prev18 of 20Type here to search直

Answer: Accounting profit = Total revenue - Explicit cost Total revenue=Price×quantityTotal…

Answered: Suppose that a business incurred…

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter7: Economies Of Scale And Scope

Section: Chapter Questions

Problem 7.5IP

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DQ Saved Не Check my work mode : This shows what is correct or incorrect for the work you have completed so far. It does not indicate com Meyer Stores carries a specialty line of flavored syrups. One of the most popular of these is raspberry syrup which sells, on average, 55 bottles per week. Meyer's cost is $9 per bottle. Meyer has determined its order cost to be $54 and inventory carrying cost is 20 percent. Meyer is open for business 52 weeks per year. a. What is the EOQ for raspberry syrup? (Round up your answer to the next whole number.) Answer is complete but not entirely correct. EOQ 414 X units b. If Meyer orders the EOQ quantity each time, what will be the inventory turnover rate for raspberry syrup? (Hint Inventory turnover = Annual sales in units / Average inventory in units.) (Round your answer to 2 decimal places.) X Answer is complete but not entirely correct. Inventory turnover rate 13.82 X times per year Prev. 1 of 3 Next >
Q9 ABC is a small business producing instructional modules for disabled children in public schools. The modules produced by ABC are not differentiated and the market price is $1,300 per module. ABC operates in a small office that rents for $600 a month and leases computer equipment that costs $480 per month. The chart lists other cost of production. Output (Q) Fixed (Instructional Cost Modules Per month) 0 1 2 3 4 5 6 7 8 9 10 Variable Total Average Average Cost Cost Fixed Variable (TC) Cost (AFC) (FC) (VC) 1,080 400 1,350 1,900 2,500 4,100 5,400 7,300 1,480 2,430 4,280 10,880 216 135 Cost (AVC) 475 Average Total Cost (ATC) 965 Marginal Cost (MC) 400 450 700 1) Complete the chart and plot the following graphs: AFC, AVC, ATV, MC. Be sure to label axis and graphs. 2) How many instructional modules ABC will produce, assuming it is profit- maximizer? Explain your answer and show that on the graph. 3) Determine ABC's profit and shade the profit on the graph. 4) Given the level of ABC's…
Upon graduating with an accounting degree, you open your own accounting firm of which you and your assistant are the only employees. To start the firm you passed on a job offer with a large accounting firm that offered you a salary of $50,000 annually. Last year you earned a total revenue of $120,000. Rent and supplies last year were $50,000. Your assistant's salary is $30,000 annually. annual operating profit? A) -$10,000. B) $40,000. C) $70,000. D) $80,000.
Eustace H. Hogan has been an employee of Major Drilling for the last two years. He uses an office in his basement to fill out orders on the internet, call customers on his cell phone, and do paperwork related to his business. Because Major Drilling doesn't have an office in his city, this is his only place of business. His home office is 200 square feet in size and he thinks his house is 2,000 sqare feet in total size. His home costs for the year are listed below. He does not earn any commissions from his work. How much can be deduct from his employment income? (remember that deductions are negative(xxx.xx)) cell phone $600(used 100% for employment) internet $1,000(used for the whole home) power/hydro $2,000 mortgage principle $6,000(repayment of mortgage) pool installed $20,000(in the backyard)
Danya plans to open an English course. Currently he earns Rp. 350 million per year teaching a language education institution and will have to give up this job if he opens a new English language course. If he chooses to open an English course, it will cost him rent and other operational costs of Rp. 2 billion per year. a. How much does he need to generate positive accounting profit? b. How much does he need to generate positive economic profit?
Finley's orchard incurs $90,000 per year in fixed costs. Last year, their total production was 100,000 tons of cherries. This year their total production fell to 72,000 tons. As a result, their average fixed cost by Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a decreased; $0.31 increased; $0.35 decreased; $0.35 d increased; $0.31
You are currently in a job as a chef in a restaurant earning $100,000 per year. You are considering opening up a restaurant in a building which you currently own. You estimate that, if you wanted to, you could rent out your building for $25,000 per year to another restaurant. Last year, your revenues and expenses from the restaurant were the following: Revenues $400,000Cost of Food $120,000Salaries/Wages $100,000Utilities $25,000Taxes $20,000 What is your accounting profit? Show your calculations What is your economic profit? Show your calculations Assuming that you are indifferent between being a chef or owning a restaurant, should you open up your restaurant? Explain why. Now suppose that instead of owning the building where your restaurant will be located, you had to pay rent of $25,000 per year for the building. Will your answers to parts 1-3 change? Show your calculations. Explain how and why your answers will change or…
Which of the following does NOT represent a firm's explicit costs? O the firm's total accounting costs. O the amount paid by the firm for employee health benefits. O costs related to workers salaries. O the value of the CEO's time 21 EX P étv A MacBook Pro. 20, ODO FB F9 F6 F7 F4 F5 F3 & * %24
A firm has three different production facilities, all of which produce the same product. Whilereviewing the firm’s cost data, Ron, a manager, discovered that one of the plants has a higher averagecost than the other plans and suggests closing this plant. Another manager, Jack, notes that the high-cost plant has high fixed costs but that the marginal cost in this plant is lower than in the other plants.He says that the high-cost plant should not be shut down but should expand its operations. Who isright?
Required information er to the graph above to answer this question. At what output does diminishing returns begin?An image shows the curves of MC, ATC, AVC and AFC.Image shows the bar graph which represents the cost data but in their the curves are also shown in the terms of MC, ATC , AVC and AFC. At x-axis shows the Quantity and at y-axis shows the Costs. Refer to the graph above to answer this question. At what output does diminishing returns begin? Multiple Choice 40. 70. 80. 90.
Jason owns a small pizza restaurant, where he works full time in the kitchen. His total revenue last year was $136,000, and his rent was $2,610 per month. He pays his one employee $2,200 per month, and the cost of ingredients and overhead averages $960 per month. Jason could earn $32,600 per year as manager of al competing pizza restaurant nearby. What's Jason's accounting profit for the entire year? Your Answer: Answer
Peter runs a small local newspaper company. He can sell a newspaper at $2. He has fixed costs of $10,000. His variable costs are $1,500 for the first thousand newspapers, $1000 for the second thousand, and then $600 for each additional thousand newspaper. i.What is his average fixed cost per newspaper (not per thousand!) if he prints 1000 newspaper? 2000? 10,000? ii.What is his average variable cost per newspaper if he prints 1000? 2000? 10,000? iii.What is his average total cost per newspaper if he prints 1000? 2000? 10,000?iv. Can he make profit at current market price? What is the breakeven price in this business (assuming maximum production at 10,000 newspaper)?

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