Chapter Six Businesses and Their Costs Study Questions: 1. Explain the difference between a plant‚ a firm‚ and an industry. Plant – establishments such as a factory‚ farm‚ mine or store. Firm – an organization that employs resources to produce goods/services for profit. Industry – group of firms that produce the same or similar products. 2. State the advantages and disadvantages of the corporate form of business. Advantages – most effective form of
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Problem 2-43 (35 minutes) 1. San Fernando Fashions Company Schedule of Cost of Goods Manufactured For the Year Ended December 31‚ 20x2 Direct material: Raw-material inventory‚ January 1 $ 40‚000 Add: Purchases of raw material 180‚000 Raw material available for use $220‚000 Deduct: Raw-material inventory‚ December 31 25‚000 Raw material used $195‚000 Direct labor 200‚000 Manufacturing overhead: Indirect material
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Cost of debt When individuals use the cost of debt‚ they should know the measurement of the interest rate‚ or the yield paid to the bondholders. When analyzing the cost of debt‚ people should know that it ’s an effective rate that businesses are willing to pay on the current debt that they have accrued. The cost of debt is a measurement of the before or after tax returns. Considering the case that individuals can deduct the interest‚ makes the tax after cost more popular than the before tax. A business
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Samuel‚ Dequanne Due Date: 7th May 2013 Teacher’s Name: Hughes Table of Contents Term definitions: pg 1 Advantages and Disadvantages of Large and Small Supermarkets: pg 2 Food Labelling: pg 3-4 Food Purchasing: pg 5 Conclusion: pg 6 Bibliography: pg 7 Term Definitions Unit pricing-The pricing of goods on the basis of cost per unit of measure Net Weight-Actual‚ computed‚ or estimated weight of a good without its container and/or packaging. Impulsive Buying- The purchase habits
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CHAPTER 6 COST BEHAVIOR TYPES OF COST BEHAVIOR PATTERNS 1. Variable Cost 2. Fixed Cost 3. Mixed / Semi-variable Cost Cost Structure – the relative proportion of fixed‚ variable‚ and mixed costs found within an organization or firm. 1. Variable Cost - its total dollar amount varies in direct proportion to changes in the activity level. Example: Number of Trucks Radiator Cost per Total Radiator
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machine hours and outgoing shipments‚ which are the activities’ three respective cost drivers‚ follow: Luxury Exclusive Setups 50 30 Machine hours 16‚000 22‚500 Outgoing shipments 100 75 The firm’s total overhead of $3‚080‚000 is subdivided as follows: manufacturing setups‚ $672‚000; machine processing‚ $1‚848‚000; and product shipping‚ $560‚000. REQUIRED: a) Calculate the unit manufacturing cost of Luxury and Exclusive electric sleeping bags by using the company’s current overhead
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manufacturer produces 1‚000 basketballs each day‚ which it sells to customers for $30 each. All costs associated with production and sales total $10‚000; however‚ if the manufacturer were to produce one additional basketball per day‚ total costs would increase to $10‚100. From these amounts‚ we can tell that a. the firm has negative profit. b. marginal cost equals $100. c. marginal cost equals $150. d. marginal cost equals marginal revenue. 2. A retailer has to pay $9 per hour to hire 13 workers
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COST OF PRODUCTION CONTENTS 1. Introduction 2. Types of costs 3.1 Opportunity‚ implicit and explicit costs 3.2 Fixed and variable costs 3.3 Average costs 3. Types of cost curves 4.4 Marginal cost curve 4.5 Average cost curves 4. Costs in Short run and in the Long run 5.6 Short run 5.7 Long run 5.8 Economies of scale 5. Cost analysis in the real world 6.9 Economies of scope 6.10 Experiential
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The Cost of Absenteeism Any company’s successful operation depends in large part on the attendance of its employees. Unnecessary or unexcused absences affect company operations. Some absences are unavoidable. Others are worth taking steps to control. Absenteeism costs companies more money every year. Can you figure out what absenteeism costs your company in any given month? Can you multiply that by 12 to see what it costs in a year? Remember‚ this isn’t taking into account the cost of replacing
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investment whereas borrowers prefer long-term loans‚ to finance their projects without the financial intermediaries both ends would not have their needs satisfied. * Risk transformation is when depositors are generally not keen to take great risks when investing their money; however‚ borrowers often look for funds in order to finance risky projects without the help of financial intermediaries many risky but profitable projects would not be implemented. * Liquidity provision is when surplus
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