2. Increasing returns to scale suggests that establishing a large factory that hires a large number...
2. Increasing returns to scale suggests that establishing a large factory that hires a large number of workers is efficient in production. But hiring a lot of workers in one place potentially drives up wages. Technology, transportation, and labor market interact and play an important role in determining the geography of production. This question illustrates these interactions and explains how the nature of production has evolved over time. Suppose a country has three cities, A, B, C. They are located...
Part 4 – Transportation Problem Pioneer Corporation sells car speakers. They have two factory locations in the Midwest where they manufacture car speakers. One is in Flint, MI and one is in Kalamazoo, MI. They also have two major stores in the Midwest where they sell their speakers, one in Chicago and one in Detroit. Below is a table that gives the shipping costs for each set of car speakers from each factory to each store. Shipping Costs Stores Factories...
The Pontiac Assembly is a factory which uses labour and capital to build trucks according to the technology f(L,K) = 4LK: During a war, the government demands that the Pontiac Assembly produces 2 trucks for the military this year. The factory is currently renting 1 units of capital. Due to various limitations, the amount of capital the factory uses cannot be changed. The wage paid for each unit of labour is 6 and rent for each unit of capital is...
Ike's Bikes is a major manufacturer of bicycles. Currently, the company produces bikes using only one factory. However, it is considering expanding production to two or even three factories. The following table shows the company's short-run average total cost (SRATC) each month for various levels of production if it uses one, two, or three factories. (Note: Q equals the total quantity of bikes produced by all factories.) Number of factories Q = 50 180 270 360 Q = 100 100...
Managerial Accounting Concepts and Principles )Classifying costs as materials, labor, or factory overhead EX 1-2 Tedicate whether the following costs of Procter & Gamble, a maker of consumer products, weuld be classified as direct materials cost, direct labor cost, or factory overhead cost. 08,2 a. Plant manager salary for the lowa City, lowa, plant b. Maintenance supplies c. Salary of process engineers d. Wages paid to Packaging Department employees in the Bear River City, Utah, paper products plant e. Scents...
1. Plastic for casing-$17,889 2. Wages of assenbly workers-$82,888 3. Property taxes on factory-$5,888 4. Accounting staff salaries-$35,888 S. Drum stands (1,888 stands purchased)-$26,888 6. Rent cost of equipnent for sales staff-$19,868 7.Upper management salaries-$125,889 8. Annual flat fee for factory maintenance service-$19,82e 9. Sales comnissions-$15 per unit 19. Machinery depreciation, straight-line $48,888 Problem 14-1A Part 1 Required: 1. Classify each cost and its amount as (a) elther varlable or fixed and (b) elther product or perlod. (The first cost...
Problem 19-01A a-b (Part Level Submission) (Video) Crane Company specializes in manufacturing a unique model of bicycle helmet. The model is well accepted by consumers, and the company has enough orders to keep the factory production at 10,000 helmets per month (80% of its full capacity). Crane’s monthly manufacturing cost and other expense data are as follows. Rent on factory equipment $11,600 Insurance on factory building 1,600 Raw materials (plastics, polystyrene, etc.) 84,000 Utility costs for factory 900 Supplies for...
Problem 19-01A a-b (Part Level Submission) (Video) Concord Company specializes in manufacturing a unique model of bicycle helmet. The model is well accepted by consumers, and the company has enough orders to keep the factory production at 10,000 helmets per month (80% of its full capacity). Concord’s monthly manufacturing cost and other expense data are as follows. Rent on factory equipment $11,100 Insurance on factory building 1,900 Raw materials (plastics, polystyrene, etc.) 78,300 Utility costs for factory 900 Supplies for...
Ike's Bikes is a major manufacturer of bicycles. Currently, the company produces bikes using only one factory. However, it is considering expanding production to two or even three factories. The following table shows the company's short-run average total cost (SRATC) each month for various levels of production if it uses one, two, or three factories. (Note: Q equals the total quantity of bikes produced by all factories.) Average Total Cost (Dollars per bike) Number of Factories Q= 50 220 310...
LO 5-2 Exercise 5-2B Identifying appropriate cost drivers Required Provide at least one example of an appropriate cost driver (allocation base) for each of the following activities a. Engineers design a product production layout. b. Engineers set up machines to produce a product. c. The production supervisor completes the paperwork initiating a work order. d. The production manager prepares materials requisition forms. e. Workers move materials from the warehouse to the factory floor f. Assembly line machines are operated. g....