kumaramit25785

kumaramit25785

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Amit Kumar

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English2Anthropology2Business1Sociology1Algebra6Geometry1Computer Science1Accounting10Biology4Physics7Economics3Chemistry2
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LeBron Factory

Number

of

Workers

Number

of

Machines

Output

(chairs

produced

per hour)

Marginal

Product of

Labor

Cost of

Workers

Cost of

Machines

Total

Cost

?1

?2

?5

?2

?2

?10

?3

?2

?20

?4

?2

?35

?5

?2

?55

?6

?2

?70

?7

?2

?80

Refer to Table above. First, complete the missing information in the Table above.

1.Each worker at the LeBron Chair Factory costs $12 per hour. The cost of each machine is $20 per day regardless of the number of chairs produced. If the factory produces at a rate of 70 chairs per hour and operates 8 hours per day, what is the factoryĆ¢Ā€Ā™s total labor cost per day?

a.

$72

b.

$112

c.

$576

d.

$616

2.Each worker at the LBJ Chair Factory costs $12 per hour. The cost of each machine is $20 per day regardless of the number of chairs produced. What is the total daily cost of producing at a rate of 55 chairs per hour if the factory operates 8 hours per day?

a.

$480

b.

$576

c.

$520

d.

$616

3.Each worker at the LBJ Chair Factory costs $12 per hour. The cost of each machine is $20 per day regardless of the number of chairs produced. Assume the number of machines does not change. If the factory produces at a rate of 78 chairs per hour, what is the total machine cost per day?

a.

$20

b.

$40

c.

$240

d.

We are unable to determine total machine costs from the information given.

4.Each worker at the LBJ Factory costs $12 per hour. The cost of each machine is $20 per day regardless of the number of chairs produced. If the factory produces at a rate of 35 chairs per hour, what is the total labor cost per hour?

a.

$40

b.

$48

c.

$384

d.

$424

5.Assume LBJ Chair Factory currently employs 5 workers. What is the marginal product of labor when the factory adds a 6th worker?

a.

5 chairs per hour

b.

15 chairs per hour

c.

25 chairs per hour

d.

70 chairs per hour

6.Assume LBJ Chair Factory currently employs 2 workers. What is the marginal product of labor when the factory adds a 3rd worker?

a.

5 chairs per hour

b.

10 chairs per hour

c.

20 chairs per hour

d.

25 chairs per hour

7.Chair Factory experiences diminishing marginal product of labor with the addition of which worker?

a.

the third worker

b.

the fourth worker

c.

the fifth worker

d.

the sixth worker

Chico Samu Ocean and Fifi, the most popular couple in CU have a small company that has a subcontract to produce instructional materials for disabled children in public school districts. The owner rents several small rooms in an office building in the suburbs for $600 a month and has leased computer equipment that costs $480 a month.

First, complete the missing information in the table below.

Output

(Instructional

Modules

per Month)

Fixed

Costs

Variable

Costs

Total

Cost

Average

Fixed

Cost

Average

Variable

Cost

Average

Total

Cost

Marginal

Cost

0

$1,080

1

$1,080

$ 400

$1,480

$400

2

$965

$450

3

$1,350

$2,430

4

$1,900

$475

5

$2,500

$216

6

$4,280

$700

7

$4,100

8

$5,400

$135

9

$7,300

10

$10,880

$980

8.What is the marginal cost of creating the tenth instructional module in a given month?

a.

$900

b.

$1,250

c.

$2,500

d.

$3,060

9. What is the average variable cost for the month if 6 instructional modules are produced?

a.

$180.00

b.

$533.33

c.

$700.00

d.

$713.33

10.What is the average fixed cost for the month if 9 instructional modules are produced?

a.

$108.00

b.

$120.00

c.

$150.00

d.

$811.11

11.How many instructional modules are produced when marginal cost is $1,300?

a.

4

b.

5

c.

7

d.

8

12.One month, Teacher's Helper produced 18 instructional modules. What was the average fixed cost for that month?

a.

$60

b.

$108

c.

$811

d.

It can't be determined from the information given.

Figure 1 below

In the figure below, panel (a) depicts the linear marginal cost of a firm in a competitive market, and panel (b) depicts the linear market supply curve for a market with a fixed number of identical firms.

13. If there are 500 identical firms in this market, what is the value of Q1?

a.

10,000

b.

20,000

c.

50,000

d.

150,000

14.If there are 500 identical firms in this market, what is the value of Q2?

a.

12,000

b.

60,000

c.

240,000

d.

300,000

15.If there are 700 identical firms in this market, what is the value of Q1?

a.

140,000

b.

210,000

c.

280,000

d.

420,000

16.If there are 700 identical firms in this market, what is the value of Q2?

a.

140,000

b.

210,000

c.

280,000

d.

420,000

17.A firm will shut down in the short run if the total revenue that it would get from producing and selling its output is less than its

a.

opportunity costs.

b.

fixed costs.

c.

variable costs.

d.

total costs.

18.A firm will shut down in the short run if, for all positive levels of output,

a.

its losses exceed its fixed costs.

b.

its total revenue is less than its variable costs.

c.

the price of its product is less than its average variable cost.

d.

All of the above are correct.

19.A firm's marginal cost has a minimum value of $2, its average variable cost has a minimum value of $4, and its average total cost has a minimum value of $5. Then the firm will shut down if the price of its product is less than

a.

$5 but more than $2.

b.

$5.

c.

$4.

d.

There is not enough information given to answer the question.

20.A firm's marginal cost has a minimum value of $50, its average variable cost has a minimum value of $80, and its average total cost has a minimum value of $90. Then the firm will shut down once the price of its product falls below

a.

b.

c.

d.

$90.

$80

$50

$40

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You are an accountant for ABC Corporation, currently aprivately-held corporation. To finance a future expansion with thepotential of becoming a publicly-traded corporation, the board ofdirectors is considering the issuance of stock to the existingstockholder group and the issuance of convertible securities to thegeneral public. They know that if they eventually do go public, theinvestment community will use metrics like EPS to assess the priceto pay for the stock. They are quite concerned about how thecompanyĆ¢Ā€Ā™s EPS numbers would compare to those of their competitorsunder this new proposal.

Here are the transactions that are under consideration for2017:

June 1 Issue 6%, $1,000 bonds at a total price of $5 million.Each $1,000 certificate is convertible into 100 shares of commonstock. The par value and market value of the convertible bonds arethe same.

July 15 Issue 300,000 shares of common stock at $3 pershare.

August 1 Issue 20,000 shares of 5% cumulative preferred stock($150 par), with each share convertible into 19 shares of commonstock. The annual 5% dividend payment is paid on December 31 andwill be prorated for the length of time the stock has beenoutstanding. The stock would be issued at par.

October 1 Issue 200,000 shares of common stock for $3 pershare.

December 1 Issue 100,000 shares of common stock for $3 pershare.

No doubt this is an ambitious plan. Although there are a numberof questions regarding the assumptions in the plan, the Board wouldfirst like to know the potential impact on earnings per share.

Note that the company started the year with 440,000 commonshares issued and outstanding.

Instructions

ĆÆĀĀ¶ explain the differences between basic and diluted earnings pershare.

ĆÆĀĀ¶ Include in the memo calculations for both basic and dilutedearnings per share given the new capital structure following thisfinancing plan. The forecasted net income (after the bonds and newstock have been issued) for 2017 is $331,500. The tax rate for ABCCorp. is 35%. Be sure these calculations and your final answers areclearly presented.

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