Assignment Cost Variance Analysis_KristinRice
.docx
keyboard_arrow_up
School
Eastern Gateway Community College *
*We aren’t endorsed by this school
Course
213
Subject
Economics
Date
Feb 20, 2024
Type
docx
Pages
1
Uploaded by MajorTeam2621 on coursehero.com
Kristin Rice
1
Assignment: Cost Variance Analysis
1.
Which of Sara Lee’s variances will be affected by the increase in egg prices? Why?
The material costs would be the variance that would be affected by the increase in egg
prices. Eggs are the first ingredient in her all butter pound cake, which means that the cost of the goods to make the all butter pound cake with increase. 2.
Will the increase in egg prices result in favorable or unfavorable variances for Sara Lee? Why?
The increase in egg prices will result in unfavorable variances for Sara Lee. They will have to spend more money making her all butter pound cakes. 3.
What is Sara Lee® likely to do to its standards-based on this increase in price and which standards will be impacted?
They are likely going to increase their standards for material costs. 4.
What, if anything, can Sara Lee® do to mitigate the impact of the rising cost of eggs on its manufacturing costs?
Sara Lee is going to have to find eggs at a cheaper price somewhere else or find some of the other ingredients at a lower price to help make up the difference for the increase in the eggs. They could also raise the price of the product to offset the increase of egg prices.
Discover more documents: Sign up today!
Unlock a world of knowledge! Explore tailored content for a richer learning experience. Here's what you'll get:
- Access to all documents
- Unlimited textbook solutions
- 24/7 expert homework help
Related Questions
12) Melquiades is worried about his grades from the microeconomics course, according to the
rules for grading, the final grade is obtained as the minimum between the grade for the midterm
test (x) and the final test (y).
The utility function of Melquiades will depend on the grades obtained from those two tests
Now, Melquiades has researched that the average student needs to study 24 minutes
an additional point in each test (tests are graded from 0 to 100)
obtain
a) If Melquiades has 20 hours to study for both tests (x and y), how much time would he
employ for each test? Figure out the grade that Melquiades will obtain in each test and
his final grade in microeconomics. Elaborate a graph.
b) How much additional study time would Melquiades require to increase his final grade by
10 points. Elaborate a graph.
c) Suppose the difficulty of the final test increases in such a way that now each additional
point would require 26 minutes of study. What would be the total cost (in minutes)…
arrow_forward
Oregon Fiber Board makes roof liners for the automotiveindustry. The manufacturing manager is concerned aboutproduct quality. She suspects that one particular failure, tears in the fabric, is related to production-run size. An assistantgathers the following data from production records:
a. Draw a scatter diagram for these data.b. Does there appear to be a relationship between run sizeand percent failures? What implications does this datahave for Oregon Fiber Board’s business?
arrow_forward
5.18. explain
arrow_forward
U.S. food markets consumers viewed beef as a normal good from 1960-1976, but viewed it as an inferior good after that point. This type of change is not abnormal, in that as average household incomes rise, preferences might change. For instance, as households move from poor to middle-class, their consumption of beef might increase. However, as households move from middle- class to upper-middle-class, they might choose to purchase more exotic foods products. Assuming you are a beef producer in 1983, what will happen if incomes continue to increase?
a. The marginal cost of beef will increase.
b. The marginal cost of beef will decrease.
c. The demand for beef will increase.
d. The demand for beef will decrease.
arrow_forward
Cost, Revenue & ProfitFor these problems, xx will represent the number of items and yy will represent the money.The fixed costs for a certain item are $215 per week. The cost to produce each item is $2 per item.Using this information, what is the cost equation? Give your answer in slope-intercept form:y=y= The retailer intends to sell each item for $13/item.Using this information, what is the revenue equation? Give your answer in slope-intercept form:y=y= If in this week 13 items are made, and all items are sold in the week, what are the total costs to the retailer?Cost = $What is the revenue from selling 13 items?Revenue = $Finally, what is the profit for this retailer?Profit = $Box 1 & 2: Enter your answer as an expression. Example: 3x^2+1, x/5, (a+b)/cBe sure your variables match those in the question.
arrow_forward
(b) A firm manufactures benches and tables: the quantity of benches manufactured is B and the quantity of
tables manufactured is T.
The total cost of manufacturing benches and tables is given by the equation:
Cost = 3B2 + 5T²2 – 2BT.
There is a shortage of lumber available to manufacture these items, and so, only 60 items in total have
been promised to a customer.
(i) Create the Lagrangian expression for Cost.
(ii) The Lagrangian equations are given:
6B – 2T – 1 = 0
10T – 2B – A = 0
60 — В - Т%3D0
Calculate the minimum cost possible.
(iii) If more lumber now becomes available, what selling price would be required to make a profit on
an additional item produced?
arrow_forward
What is a good or service that has become expensive/cheap due to (a) natural scarcity/abundance of supply or naturally high/low demand, and (b) artificial mean (e.g., government policy, competition restricting practices)?
arrow_forward
Total revenue is in dollars and x is the number of units.
Suppose that the total revenue function for a commodity is
R(x) = 42x − 0.05x2.
(a)
Find
R(50).
$
Tell what it represents.
50 units produce this amount of revenue. The revenue decreases by about this amount when the number of units is increased from 50 to 51. The actual revenue of the 50th unit is this amount. 51 units produce this amount of revenue. The revenue increases by about this amount when the number of units is increased from 50 to 51.
(b)
Find the marginal revenue function.
MR =
(c)
Find the marginal revenue (in dollars per unit) at
x = 50.
$ per unit
Tell what it predicts about the sale of the next unit and the next 2 units.
The sale of the next unit will
the revenue by about $ . The sale of the next 2 units will
the revenue by about $ .
(d)
Find
R(51) − R(50).
$
Explain what this value represents.
actual revenue from the 50th unit actual revenue from 51 units…
arrow_forward
Philip sells homegrown heirloom tomatoes at a local farmer's
market. Suppose for the past several weeks, Philip has been
selling his tomatoes for $2.25 per pound and he has been
selling 90 pounds of tomatoes each week. Suppose this week
he drops the price of the tomatoes to $1.75 per pound and as
a result of the price drop, he is stilling 110 pounds of
tomatoes.
(a) Using the midpoint rule, what is the percentage change in
the quantity of tomatoes sold from the drop in price?
% (Enter your answer as a percentage
with no decimals rounded to the nearest whole percent (i.e.
33% or -10%))
4
(b) Using he midpoint rule, what is the percentage change in
the price of Philip's tomatoes?
% (Enter
your answer as a percentage with no decimals rounded to the
nearest whole percent (i.e. 33% or -10%))
(c) Using the midpoint rule, what is the price elasticity of
demand for Philips, tomatoes?
(Enter your
arrow_forward
Electrical Components Profit A company’s dailyprofit from the production and sale of electrical components can be described by the equation P(x) =6.45x - 2000 dollars, where x is the number of unitsproduced and sold. What level of production andsales will give a daily profit of more than $10,900?
arrow_forward
Answer the following questions using the following information. Columns 1 and 2 in the table below show the marginal utility that Cody gets by purchasing products A and B. Column 3 shows the marginal utility Cody gets from saving Assume that the price of A is $13
the price of B is $10, and Cody has an income of $129.
a) Find the following series of MU/$ for each column.
Note: Keep as much precision as possible during your calculations. Your final answer should be accurate to at least two decimal places
Column 1
Column 2
Column 3
Units of A MU MU/S Units of B MU MU/$ Number of $ saved MU MU/S
68
6.8
1
80
6.15
1.
13
0.
2
71
5.46
2
63
6.3
2
10
0.
3
66
5.08
3
56
5.6
3
7
4
61
4.69
4.
46
46
0.
54 4.15
40
4
45
3.46
31
3.1
6.
1
39
3
22
2.2
0.
29
2.23
8
17
1.7
8
b) What quantities of A and B will Cody purchase in maximizing his utility?
Quantity of A: 0
Quantity of B: 0
c) How many dollars will Cody save?
Dollars Saved = $0
SAVE AND CLOSE
arrow_forward
2. Consider a product market with a supply function Q = Bo + Bị Pi + u, a demand
function Q = Yo + u, and a market equilibrium condition Q = Q, where u and u
are mutually independent i.i.d. random variables, both with a mean of zero. You have
a data set of (P, Qi) in equilibrium.
a. Show that P; and u are correlated.
b. Show that the OLS estimator for 31 is inconsistent.
arrow_forward
The profit from the supply of a certain commodity is modeled as
P(q) = 71ge-0.29 dollars
where q is the number of units produced. 0 ≤ q ≤ 100
(a) Write an expression for the rate of change of profit. (Be sure to use q as the independent variable.)
P'(q)
dollars per unit
(b) At what production level in the domain 0 ≤ q ≤ 100 is the rate of change of profit zero? (Round your answer to the nearest whole number.)
q=
units
(c) What is profit at the production level found in part (b)? (Round your answer to two decimal places.)
arrow_forward
A used car dealership rents 210 cars for $9 a day. They want to increase the price to maximize their profits. They notice that if they increase the price by $1.25 that they have fewer rentals.
Create an equation for profit for the car dealership rental sales.
Determine the price of the rental that maximizes profit
arrow_forward
18. Choose the correct answer from the given below.
arrow_forward
(a) The new PlayBox gaming consoles retail for $900 each. However, a shortage of
consoles caused by manufacturing delays and parts supply issues have lead to
scalpers purchasing large numbers of consoles and reselling them for a profit.
Due to a manufacturing fault, the scalper incurs a 50% loss on six consoles.
i) If the scalper normally makes a 40% profit on the consoles, how many
consoles must they sell to make up for their loss?
ii) The scalper is impatient and decides to increase their price to make up for
the loss faster. What price must they resell the consoles at to make back
their loss upon the sale of their fourth console at the increased price?
arrow_forward
The activity driver for the packing activity is the number of packing hours. Product A uses 50 packing hours and Product B uses 150 packing hours. Calculate the consumption ratios for each product.
Group of answer choices
0.3; 0.7
1; 3
0.25; 0.75
0.215; 0.785
arrow_forward
Define conversation analysis (CA)
arrow_forward
Give U=XY-2Y and Px=4 ,Py=2 want to minimize budget that subject to is PX+PY=288
1).write out the Lagrangian function
2.Use First order condition to find X and Y
3.Test for the second order condition for minimum satisfied.
arrow_forward
Technology B uses 4 workers and 2 tonnes of coal to produce 100 meters of cloth. The worker's wages cost $10 and coal costs $5. We have previously calculated that the total cost of production is $50 and that the vertical intercept of the isocost line is 10.If there was a technology that used 1 more worker, how much would it have to decrease the coal required in order to cost the same? (Note: this is the absolute value of the slope of the isocost line.)
arrow_forward
A company has determined that its prodor for a product can be described by linear function. The profit from the production and sales of the 150 units is $455, and the profit from 250 units is $895
1. What is the average rate of change of the profit for the product when between 150 and 250 units are sold?
2. Write the equation of the profit function for this product?
3. How many units give break-even for this product?
arrow_forward
Let say you have 3 products: cake, candy, and bread. The revenue per cake is $8. The revenue per candy is $4. The revenue per bread is $5. Define the number of cake, candy, and bread you are about to produce per day as x, y, and z respectively. The manager wants that the number of cake accounts for at least 30% of the total production per day. What is the correct linear constraint to show this?
Group of answer choices
0.3x – 0.7y – 0.7z ≥ 0
0.7x – 0.3y – 0.3z ≥ 0
0.7x – 0.3y – 0.7z ≥ 0
0.3x – 0.7y – 0.3z ≥ 0
arrow_forward
The sales function for a product is given by S(x)=119+40.5x2−0.5x3 where x represents thousands of dollars spent on advertising, 0≤x≤54 and S is in thousands of dollars.x
Find the point of diminishing returns. Enter the amount spent on advertising as well as the sales in dollars.
Amount Spent on Advertising:$ ____ total Sales: $___
arrow_forward
Exercise 1
A consumer's utility function is u(x, y)
=
x²y³ and the budget constraint is prx +Pyy ≤ w,
where the parameters pr, Py and we are all strictly positive.
(a) Solve the consumer's utility maximization problem.
(b) Use the envelope theorem to estimate the change in the indirect utility function (i.e.,
the problem's value function) when the price py is changed to py + e, with e > 0.
arrow_forward
What is this equation used for? What do the variables mean?
Can you give an example how a research study can be applied to this formula? Does it account for control variables ?
arrow_forward
SEE MORE QUESTIONS
Recommended textbooks for you
Related Questions
- 12) Melquiades is worried about his grades from the microeconomics course, according to the rules for grading, the final grade is obtained as the minimum between the grade for the midterm test (x) and the final test (y). The utility function of Melquiades will depend on the grades obtained from those two tests Now, Melquiades has researched that the average student needs to study 24 minutes an additional point in each test (tests are graded from 0 to 100) obtain a) If Melquiades has 20 hours to study for both tests (x and y), how much time would he employ for each test? Figure out the grade that Melquiades will obtain in each test and his final grade in microeconomics. Elaborate a graph. b) How much additional study time would Melquiades require to increase his final grade by 10 points. Elaborate a graph. c) Suppose the difficulty of the final test increases in such a way that now each additional point would require 26 minutes of study. What would be the total cost (in minutes)…arrow_forwardOregon Fiber Board makes roof liners for the automotiveindustry. The manufacturing manager is concerned aboutproduct quality. She suspects that one particular failure, tears in the fabric, is related to production-run size. An assistantgathers the following data from production records: a. Draw a scatter diagram for these data.b. Does there appear to be a relationship between run sizeand percent failures? What implications does this datahave for Oregon Fiber Board’s business?arrow_forward5.18. explainarrow_forward
- U.S. food markets consumers viewed beef as a normal good from 1960-1976, but viewed it as an inferior good after that point. This type of change is not abnormal, in that as average household incomes rise, preferences might change. For instance, as households move from poor to middle-class, their consumption of beef might increase. However, as households move from middle- class to upper-middle-class, they might choose to purchase more exotic foods products. Assuming you are a beef producer in 1983, what will happen if incomes continue to increase? a. The marginal cost of beef will increase. b. The marginal cost of beef will decrease. c. The demand for beef will increase. d. The demand for beef will decrease.arrow_forwardCost, Revenue & ProfitFor these problems, xx will represent the number of items and yy will represent the money.The fixed costs for a certain item are $215 per week. The cost to produce each item is $2 per item.Using this information, what is the cost equation? Give your answer in slope-intercept form:y=y= The retailer intends to sell each item for $13/item.Using this information, what is the revenue equation? Give your answer in slope-intercept form:y=y= If in this week 13 items are made, and all items are sold in the week, what are the total costs to the retailer?Cost = $What is the revenue from selling 13 items?Revenue = $Finally, what is the profit for this retailer?Profit = $Box 1 & 2: Enter your answer as an expression. Example: 3x^2+1, x/5, (a+b)/cBe sure your variables match those in the question.arrow_forward(b) A firm manufactures benches and tables: the quantity of benches manufactured is B and the quantity of tables manufactured is T. The total cost of manufacturing benches and tables is given by the equation: Cost = 3B2 + 5T²2 – 2BT. There is a shortage of lumber available to manufacture these items, and so, only 60 items in total have been promised to a customer. (i) Create the Lagrangian expression for Cost. (ii) The Lagrangian equations are given: 6B – 2T – 1 = 0 10T – 2B – A = 0 60 — В - Т%3D0 Calculate the minimum cost possible. (iii) If more lumber now becomes available, what selling price would be required to make a profit on an additional item produced?arrow_forward
- What is a good or service that has become expensive/cheap due to (a) natural scarcity/abundance of supply or naturally high/low demand, and (b) artificial mean (e.g., government policy, competition restricting practices)?arrow_forwardTotal revenue is in dollars and x is the number of units. Suppose that the total revenue function for a commodity is R(x) = 42x − 0.05x2. (a) Find R(50). $ Tell what it represents. 50 units produce this amount of revenue. The revenue decreases by about this amount when the number of units is increased from 50 to 51. The actual revenue of the 50th unit is this amount. 51 units produce this amount of revenue. The revenue increases by about this amount when the number of units is increased from 50 to 51. (b) Find the marginal revenue function. MR = (c) Find the marginal revenue (in dollars per unit) at x = 50. $ per unit Tell what it predicts about the sale of the next unit and the next 2 units. The sale of the next unit will the revenue by about $ . The sale of the next 2 units will the revenue by about $ . (d) Find R(51) − R(50). $ Explain what this value represents. actual revenue from the 50th unit actual revenue from 51 units…arrow_forwardPhilip sells homegrown heirloom tomatoes at a local farmer's market. Suppose for the past several weeks, Philip has been selling his tomatoes for $2.25 per pound and he has been selling 90 pounds of tomatoes each week. Suppose this week he drops the price of the tomatoes to $1.75 per pound and as a result of the price drop, he is stilling 110 pounds of tomatoes. (a) Using the midpoint rule, what is the percentage change in the quantity of tomatoes sold from the drop in price? % (Enter your answer as a percentage with no decimals rounded to the nearest whole percent (i.e. 33% or -10%)) 4 (b) Using he midpoint rule, what is the percentage change in the price of Philip's tomatoes? % (Enter your answer as a percentage with no decimals rounded to the nearest whole percent (i.e. 33% or -10%)) (c) Using the midpoint rule, what is the price elasticity of demand for Philips, tomatoes? (Enter yourarrow_forward
- Electrical Components Profit A company’s dailyprofit from the production and sale of electrical components can be described by the equation P(x) =6.45x - 2000 dollars, where x is the number of unitsproduced and sold. What level of production andsales will give a daily profit of more than $10,900?arrow_forwardAnswer the following questions using the following information. Columns 1 and 2 in the table below show the marginal utility that Cody gets by purchasing products A and B. Column 3 shows the marginal utility Cody gets from saving Assume that the price of A is $13 the price of B is $10, and Cody has an income of $129. a) Find the following series of MU/$ for each column. Note: Keep as much precision as possible during your calculations. Your final answer should be accurate to at least two decimal places Column 1 Column 2 Column 3 Units of A MU MU/S Units of B MU MU/$ Number of $ saved MU MU/S 68 6.8 1 80 6.15 1. 13 0. 2 71 5.46 2 63 6.3 2 10 0. 3 66 5.08 3 56 5.6 3 7 4 61 4.69 4. 46 46 0. 54 4.15 40 4 45 3.46 31 3.1 6. 1 39 3 22 2.2 0. 29 2.23 8 17 1.7 8 b) What quantities of A and B will Cody purchase in maximizing his utility? Quantity of A: 0 Quantity of B: 0 c) How many dollars will Cody save? Dollars Saved = $0 SAVE AND CLOSEarrow_forward2. Consider a product market with a supply function Q = Bo + Bị Pi + u, a demand function Q = Yo + u, and a market equilibrium condition Q = Q, where u and u are mutually independent i.i.d. random variables, both with a mean of zero. You have a data set of (P, Qi) in equilibrium. a. Show that P; and u are correlated. b. Show that the OLS estimator for 31 is inconsistent.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you