question B Instructions: Answer to the best of your ability. Show all of your work,the details, on this excel tab.The first two columns in the following table give a firm's short-runproduction function when the only variable input is labor, and capital(the fixed input) is held constant at 5 units. The price of capital is $2,000per unit, and the price of labor is $500 per unit.CostsAverage costUnits of Units of Average MarginalMarginallaboroutputProduct ProductFixedVariableTotalFixedVariableTotalcostXXXXXXXXXXXXa. Complete the table2040004010000b. What is the relation between average variable cost and marginal cost?Between average total cost and marginal cost?6015000801940010023000

Average Product (AP)= Total Product (TP)/ Labour (L). Marginal Product = Change in production…

he first two columns in the following table give a firm's short-run roduction function when the only variable input is labor, and capital he fixed input) is held constant at 5 units. The price of capital is $2,000 er unit, and the price of labor is $500 per unit. - Complete the table What is the relation between average variable cost and marginal cost? etween average total cost and marginal cost?

he first two columns in the following table give a firm's short-run roduction function when the only variable input is labor, and capital he fixed input) is held constant at 5 units. The price of capital is $2,000 er unit, and the price of labor is $500 per unit. - Complete the table What is the relation between average variable cost and marginal cost? etween average total cost and marginal cost?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

The quantity, Q, of a product manufactured by a company is given by Q = ak0.6L0.4, where a is a positive constant, K is the quantity of capital and L is the quantity of labor used. Capital costs are $32 per unit, labor costs are $8 per unit, and the company wants costs for capital and labor combined to be no higher than $240. Suppose you are asked to consult for the company, and learn that 6 units each of capital and labor are being used. (a) What do you advise? Should the company use more or less labor? More or less capital? If so, by how much? Enter the exact answers. The company should increase ✓labor by 6 unit(s). (b) Complete the sentence below to sell your advice to the board of directors. Round your answer to two decimal places. Reducing i unit(s) and reduce 176.63 capital by 1.5 the quantity of capital and increasing the quantity of labor will increase production by % while holding costs to $240.
B. Calculate the profit margin, return on investment, and residual income. Assume an investment base of $100,000 and 6% cost of capital. Round your percentage answers to one decimal place. Profit margin Return on investment Residual income 2.20 a ✓ % 4.2 ✓ % C. Which of the following statements is correct? Uncontrollable costs are included in the income statement because a. these costs ultimately affect each division. b. these costs are the responsibility of each division manager. c. these costs are non-recurring. d. these costs are head office's responsibility.
Let S represent the amount of steel produced (in tons). Steel production is related to the amount of labor used (L) and the amount of capital used (C) by the following function: S = 20 L0.30 C 0.70 In this formula L represents the units of labor input and C the units of capital input. Each unit of labor costs $50, and each unit of capital costs $100. (a) Formulate an optimization problem that will determine how much labor and capital are needed in order to produce 50,000 tons of steel at minimum cost. If your answer is zero, enter “0”. Min L + C s.t. L0.30 C 0.70 L, C (b) Solve the optimization problem you formulated in part a. Hint: When using Excel Solver, start with an initial L > 0 and C > 0. Do not round intermediate calculations. Round your answers to the nearest whole number. L = C = Cost = $
Use the following data to solve problem #2: - Fixed costs $2,500 - Variable cost per unit $1.00 - Selling price per unit $6.00 - Run a simulation for production runs in increments of 100 (run 15) - At what production level in the company profitable - What is the amount of profit? - What is the maximum profit under these conditions - Show all work on a spreadsheet
A firm in a perfectly competitive industry has a typical cost structure. The normal rate of profit in the economy is 6 percent. This firm is earning $15 on every $150 invested by its founders. Instructions: Enter your answers as whole numbers. a. What is its percentage rate of return? percent. b. Is the firm earning an economic profit? (Cick to select) If so, how large? O percent. c. Will this industry see entry or exit? (Click to select) d. What will be the rate of return earned by firms in this industry once the industry reaches long-run equilibrium? O percent.
A firm’s product sells for $2 per unit in a highly competitive market. The firm produces output using capital (which is rented at $75 per hour) and labor (which is paid a wage of $15 per hour under a contract for 20 hours of labor services). Complete the following table and use the information to answer the questions that follow. K L Q MPK APK VMPK 0 20 0 1 20 50 2 20 150 3 20 300 4 20 400 5 20 450 6 20 475 7 20 475 8 20 450 9 20 400 10 20 300 11 20 150 (a) Identify the fixed and variable inputs (b) What are the firm's fixed costs? (c) What is the variable cost of producing 475 units of output? (d) How many units of the variable input should be used to maximize profits? (e) What are the maximum profits this firm can earn?…
The following data show the total output for a firm when different amounts of labour are combined with a fixed amount of capital. Assume the wage per unit of labour is $10 and the cost of the capital is $50. Total output per Labour per period period 1 10 2 30 3 90 4 132 150 If this firm is producing 20 units of output per period its marginal cost i... O a. $1.00. O b. $0.17. O c. $0.50. O d. $1.67. O e. $10.00.
1. The function of a company's product to produce output at the level of input use is Q = -1/3x3 + 9x3 + 70. If the input price x used is IDR. 800, - per unit, while the output price is IDR. 10, - per unit, specify: a. The amount of input that must be used by the company in orderto produce the amount of output that provides maximum finance! How much is the output? b. What is the average size of the company?
Golden Goodness (GG) has an investment center that had the following data: Operating Income $28,000 Sales $350,000 Invested assets $175,000 PMB has set a minimum acceptable rate of return at 14%. Using the information, answer the following questions. You must include what type of number it is (%, $, etc.) Part A: What is the residual income? Part B: Show calcualtions on how you got answer
(1)Use the graph to answer the question that follows. Based on the chart above, if the product sells at a price of $3 per unit, what is the marginal revenue product of the second unit of labor? A-$30. B-$45. C-$90. D-$120. E-Indeterminate (2)The number of units of output that a machine will produce increases, ceteris paribus. How will this change in productivity affect demand for the machine? A-Demand for the machine will increase. B-Demand for the machine will decrease. C-There will be no change in demand for the machine. D-Demand will not change, but quantity demanded will decrease. E-Demand will not change, but quantity demanded will increase.
Download and fill out the Section 5 Comprehensive Problem Template attached below to complete the problems (ignore question 5-2 as this applies to the "combined accounting and finance" course). Problem 5-1 Redlands Inc. sells one product for $5. The variable cost per item is $3, and the fixed costs for the firm are $40. Required: a. Compute the breakeven point in units. b. Compute the number of units and sales revenue needed to achieve a $20 profit. (Ignore income taxes.) c. Assume that the income tax rate for Redlands is 40%. Compute the number of units and sales revenue needed to achieve an $18 net profit. d. Compute the number of units and sales revenue needed to achieve an 8% profit margin. (Ignore income taxes.) e. Compute the number of units and sales revenue needed to achieve a 12% net profit margin. (Assume a 40% income tax rate.) f. Assume that Redlands currently sells 40 units. Redlands estimates that if it increased sales price to $6 per unit demand would decrease by…
A firm produces according to the following production function: F(L,K)=L0.7K0.3. The price of capital is $3 and the wage rate is $7. What is the optimal combination of labor and capital in order to produce 100 units of output? Multiple Choice L*=50,K*=50 L*=100,K*=50 L*=100,K*=100 L*=10,K*=10