Suppose there are two pencil producers with identical production facilities—identical factories and equipment. The firms pay the same wages and pay the same prices for materials. Sam has a small workforce and produces 1,000 pencils per minute; Marian has a medium-size workforce and produces 2,000 pencils per minute. The two firms have the same average total cost of 10 cents per pencil. Suppose you build a production facility identical to the ones used by the other firms and hire enough workers and buy enough materials to produce 2,500 pencils per minute. Would you expect your average cost to be 10 cents per pencil (like the other two firms), less than 10 cents, or more than 10 cents?

If you want to compare two different investments, what should you calculate

Analyzing and computing accrued warranty liability and expense waymire company sells a motor that carries a 60-day unconditional warranty against product failure. from prior years' experience, waymire estimates that 2% of units sold each period will require repair at an average cost of $100 per unit. during the current period, waymire sold 69,000 units and repaired 1,000 units. (a) how much warranty expense must waymire report in its current period income statement? (b) what warranty liability related to current period sales will waymire report on its current period-end balance sheet? (hint: remember that some units were repaired in the current period.) (c) what analysis issues must we consider with respect to reported warranty liabilities?

Varto company has 9,400 units of its sole product in inventory that it produced last year at a cost of $23 each. this year’s model is superior to last year’s, and the 9,400 units cannot be sold at last year’s regular selling price of $42 each. varto has two alternatives for these items: (1) they can be sold to a wholesaler for $8 each, or (2) they can be reworked at a cost of $251,100 and then sold for $34 each. prepare an analysis to determine whether varto should sell the products as is or rework them and then sell them.