Seymore Company Manufactures Three Products,Ace,Deuce,and Trey,requiring the Following Inputs of Raw

question 68

Essay

Seymore Company manufactures three products,Ace,Deuce,and Trey,requiring the following inputs of raw materials:
$$\begin{array} { | l c c | } \hline & { \text { Units of Materials Required } } \\ \text { Product } & \text { Fabric } & \text { Metal } \\\text { Ace } & 2 & 2 \\\text { Deuce } & 1 & 2 \\\text { Trey } & 2 & 1 \\\hline\end{array}$$
$\begin{array}{lrr} & \text { Fabric } & \text { Metal } \\\text { Unit cost } & \$ 4 & \$ 2 \\\text { Beginning inventory } & 6,000 & 5,000 \\\text { Ending inventory } & 5,000 & 4,000 \\\end{array}$
Unit cost and inventory for each raw material:
Scheduled production:
$\begin{array}{ll}\text { Ace } & 30,000 \\\text { Deuce } & 20,000 \\\text { Trey } & 50,000\end{array}$
Prepare a direct materials purchases budget for the year ended December 31,20x8.

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Definitions:

Producer Surplus

The difference between the amount that producers are willing and able to sell a good for and the amount they actually receive (market price).

Total Surplus

The sum of consumer surplus and producer surplus, representing the total net benefit to society from a market transaction.

Deadweight Loss

The reduction of economic efficiency that happens when the free market does not achieve equilibrium for a particular good or service.

Tariff

A tax imposed by a government on goods and services imported from other countries to protect domestic industries from foreign competition.