Tharaldson Corporation makes a product with the following standard costs: Standard Quantity or HoursStandard Price or RateStandard Cost Per Unit Direct materials 6.7ounces$4.00per ounce$26.80 Direct labor 0.8hours$11.00per hour$8.80 Variable overhead 0.8hours$6.00per hour$4.80 The company reported the following results concerning this product in June. Originally budgeted output 2,100units Actual output 2,600units Raw materials used in production 19,500ounces Purchases of raw materials 21,600ounces Actual direct labor-hours 4,700hours Actual cost of raw materials purchases$40,600 Actual direct labor cost$12,100 Actual variable overhead cost$3,050 The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased. The materials quantity variance for June is:

5. profit maximization and shutting down in the short run suppose that the market for polos is a competitive market. the following graph shows the daily cost curves of a firm operating in this market. 0 2 4 6 8 10 12 14 16 18 20 50 45 40 35 30 25 20 15 10 5 0 price (dollars per polo) quantity (thousands of polos) mc atc avc for each price in the following table, calculate the firm's optimal quantity of units to produce, and determine the profit or loss if it produces at that quantity, using the data from the previous graph to identify its total variable cost. assume that if the firm is indifferent between producing and shutting down, it will produce. (hint: you can select the purple points [diamond symbols] on the previous graph to see precise information on average variable cost.) price quantity total revenue fixed cost variable cost profit (dollars per polo) (polos) (dollars) (dollars) (dollars) (dollars) 12.50 135,000 27.50 135,000 45.00 135,000 if the firm shuts down, it must incur its fixed costs (fc) in the short run. in this case, the firm's fixed cost is $135,000 per day. in other words, if it shuts down, the firm would suffer losses of $135,000 per day until its fixed costs end (such as the expiration of a building lease). this firm's shutdown price—that is, the price below which it is optimal for the firm to shut down—is per polo.

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Henry crouch's law office has traditionally ordered ink refills 55 units at a time. the firm estimates that carrying cost is 35% of the $11 unit cost and that annual demand is about 240 units per year. the assumptions of the basic eoq model are thought to apply. for what value of ordering cost would its action be optimal? a) for what value of ordering cost would its action be optimal?