Production Cost Analysis and Estimation Applied Problems

Complete the calculations below using this data. Show all of your work and clearly label each of your calculations.

The shop has five (5) barbers. (Ned does not work in the shop and, as owner/entrepreneur, he takes no salary.) Each barber is paid an annual salary of $18,000. All equipment including store fixtures and barbering equipment is leased on an annual basis at $4,500 per year. Building space is leased at the rate of $500 per month (or $6,000 per year). Ned is concerned about the shop’s cost structure and seeks your advice.

Problems like the following will be included on the final exam. Your instructor may indicate

The Enlightenment was a period of time during the second half of the 18th century of new concepts and ideas aimed to advance European society by using rational thinking and logic. The ideas presented during this period focused on changing the way we view our world and the people who live in it. The two scholars who formed the foundations of the Enlightenment, Isaac Newton and John Locke, concentrated on two different subjects, but they both greatly influenced our way of thinking. Another leader in the enlightenment who introduced another facet into our way of thinking is Pierre Bayle. Bayle mainly focused on religion and whether religious intolerance is justified. Adam Smith applied another way of thinking to the science of economics. All

Describe your answer for each item below in complete sentences, whenever it is necessary. Show all of your calculations and processes for the following points:

The next step would be for management to know precisely how their decision to downsize capacity would impact the firm’s future operating costs, and also identify specific areas in which the firm could achieve additional cost reductions. Additionally, the cost analysis would help forecast the firm’s operating costs and projected profits (or losses) for the upcoming fiscal year. However, before we can proceed with such analysis, an examination of how the various categories of Continental’s costs behave is in order.

NOTE: You must show your work on each problem to receive full credit points allocated

We have two (quantity, price) pairs for pizza. Specifically, (QD1 , P1 ) = (60, $4) and (QD2 , P2 ) = (80, $2) . Then, plugging these numbers into the above formula, we obtain:

4.) Compute the WACC for the E&P division. What causes it to differ from your answer to part 3?

Provide detailed descriptions and show all calculations used to arrive at solutions for the following questions:

Presently, cost and quality in health care are both indicators that are benchmarked in determining best healthcare practice. Two organizations both work towards meeting these objectives in healthcare, The Agency for Healthcare Research and Quality (AHRQ), a public agency and the Commonwealth Fund, a private agency.

Unit selling prices, Unit selling prices are the selling prices of the products at time of sale and is assumed to be constant

Diseconomies of scale are described as companies that have grown too much and this has driven up cost. This makes me think of my former employer Cleveland Clinic and their buying of every hospital in the Northeast Ohio region. They have even purchased a hospital in the city of Akron Ohio too. This purchase was approved last fall. Buying all these hospitals increases operating cost for the Clinic and considering the issues with healthcare funding this will be an issue.

When buy a lot of item, item we buy was offering/make a discount. These make a problem to determine contribution margin ratio. Example normally when we buy/sell a lot of item we can receive/give discount. Event we know that it hard to calculate when price always changes base on the quantity item of we buy/sell. So in order to make easy calculation we must make assumption fixed price every volume was purchase and selling and ignore the cost that give effect the change in price and volume.

Instructions: Attempt any three questions out of four. All questions carry equal marks. Start each answer on a fresh page. Parts of the question must be answered together. Use appropriate tables, diagrams, equations to support your answers. Assume suitable assumption wherever necessary.