Carolina Corporation, Which Uses Throughput Costing, Began Operations at the Start

question 68

Essay

Carolina Corporation, which uses throughput costing, began operations at the start of the current year. Planned and actual production equaled 20,000 units, and sales totaled 17,500 units at $95 per unit. Cost data for the year were as follows:

Required:
A. Compute the company's total cost for the year.
B. How much of this cost would be held in year-end inventory under (1) absorption costing and (2) variable costing?
C. How much of the company's total cost for the year would appear on the period's income statement under (1) absorption costing and (2) variable costing?

Interpret the effects of monopoly on pricing and economic profits.

Discuss personalized pricing and the role of Big Data in online retail.

Define and explain network effects and their contribution to economies of scale.

Describe the characteristics that make a monopolist a price maker.

---

Definitions:

ATC Curve

Average Total Cost Curve, a graphic representation that shows the cost per unit of output produced.

Barriers to Entry

Factors that make it difficult for new firms to enter a market, such as high startup costs, stringent regulations, or strong competition from existing firms.

Administered Prices

Prices that are set by the company rather than determined by market demand and supply conditions; often found in less competitive markets.

Cartel

An association of independent businesses or countries agreeing to coordinate their production and pricing to monopolize a market or maximize profits.