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Question 1:
(a) ‘The car industry is characterized by broad products differentiation' Analyse the long run situation of a car producer, commenting on profitability and efficiency levels, and explain why economists tend to have mixed views on the efficiency level of this industry.
(b) Using relevant theoretical underpinnings, explain how are airfares determined?
Question 2:
(a) Describe and analyse the typical relationship between labour productivity and size of capital that characterize the short run production function of a firm.
(b) Would additional capital equipment necessarily lead to lower costs in the long run? Explain.
Cost Behavior A firm's cost position results from the cost behavior of its value activities. The cost behavior is based on a number of structural factors which influence cost
Disadvantages of the cost accounting: 1. It is unnecessary: it is argued that maintenance of the cost records is not necessary and involves duplication of work. It is based o
The Search for Alternative Courses of Action The second stage of the decision-making model is a search for a range of possible courses of action (or strategies) that might enab
tha accountant''s approach to CVP ANALYSIS HAS BEEN CRITICISED IN THATIT DOES NOT DEAL WITH THE FOLLOWING; CHANGES IN PRODUCT MIX. WHY IS IT SO?
1. If the marginal cost of producing a good is increasing as a firm produces more of the good, then which of the following must be true? a. AFC is rising b. AVC i
The most ticklish difficulty that is faced through the finance manager is the resolve of the amount of working capital requirement at a specific level of production. To resolve thi
COST-VOLUME PROFIT (C-V-P) ANALYSIS INTRODUCTION You can employ cost-volume-profit analysis to examine the natural relationship among cost, volume, and profit in pricing decision
Implementation of the Decisions Once alternative courses of action have been chosen, they must be implemented as part of the budgeting procedure. The budget is a financial plan
Transient Analysis A state is said to be transient if it is impossible to move to that state from any other state except itself. This state is temporary and eventually a stead
Computing equivalents units and assigning costs to completed units and ending work in process; no beginning inventory or cost transferred in (30 -45min) Sue Electronics makes CD p
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