Production Cost Analysis and Estimation Applied Problems

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:

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

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.

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

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:

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.

C V P Analysis 1 CVP Analysis Understand how cost behavior and cost-volume-profit analysis are used by managers. 2 Questions Addressed by CVP Analysis  How much must I sell to earn my desired income?  How will income be affected if I reduce selling prices to increase sales volume?

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.

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

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

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

Time and Cost Estimating Techniques Estimating work times provides several benefits for the project manager. It gives an idea of the level of effort required to complete a project. This information then enables the project manager to produce a realistic plan based upon that effort. Estimating also helps the project manager anticipate the budget for the project.

The Economic theory tells that a firm may become less efficient if it becomes large. The additional costs of being larger are called diseconomies of scale.

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.