Suppose that kuhner rice farms owns all the rice- producing land in the small country of kuhnlandia, and that there are no imports of rice allowed into kuhnlandia.

a. kuhner rice is making economic profit currently on its sales of rice. graph its profit/loss situation in rice sales and label price and quantity. shade and label the areas of economic profit, consumer surplus, producer surplus, and deadweight loss.
b. the government becomes concerned that kuhner rice is price-gouging on a staple food item like rice. the government decides to regulate the price of rice using average cost pricing method (see p. 396-398) at $2 a bag. make a new graph showing the regulated price and quantity. again, shade the area of profit or loss, consumer surplus, producer surplus, and any deadweight loss.
c. under the new regulations, kuhner rice decides that it is no longer profitable to produce rice. it sells off its rice farms, which allows many small rice farmers to pop up and compete in kuhnlandia. create a new graph which labels the new price and quantity in a perfectly competitive market. (hint: draw the classic monopoly graph but show price and quantity if it were competitive. page 385 has a good graph for this. note that supply= mc! this is important to note because suppliers won't supply at prices that are below their marginal costs.)

Required information problem 15-1a production costs computed and recorded; reports prepared lo c2, p1, p2, p3, p4 [the following information applies to the questions displayed below. marcelino co.'s march 31 inventory of raw materials is $84,000. raw materials purchases in april are $540,000, and factory payroll cost in april is $364,000. overhead costs incurred in april are: indirect materials, $59,000; indirect labor, $26,000; factory rent, $38,000; factory utilities, $19,000; and factory equipment depreciation, $58,000. the predetermined overhead rate is 50% of direct labor cost. job 306 is sold for $670,000 cash in april. costs of the three jobs worked on in april follow. job 306 job 307 job 308 balances on march 31 direct materials $30,000 $36,000 direct labor 25,000 14,000 applied overhead 12,500 7,000 costs during april direct materials 133,000 210,000 $100,000 direct labor 105,000 150,000 101,000 applied overhead ? ? ? status on april 30 finished (sold) finished in process (unsold) required: 1. determine the total of each production cost incurred for april (direct labor, direct materials, and applied overhead), and the total cost assigned to each job (including the balances from march 31). a-materials purchases (on credit). b-direct materials used in production. c-direct labor paid and assigned to work in process inventory. d-indirect labor paid and assigned to factory overhead. e-overhead costs applied to work in process inventory. f-actual overhead costs incurred, including indirect materials. (factory rent and utilities are paid in cash.) g-transfer of jobs 306 and 307 to finished goods inventory. h-cost of goods sold for job 306. i-revenue from the sale of job 306. j-assignment of any underapplied or overapplied overhead to the cost of goods sold account. (the amount is not material.) 2. prepare journal entries for the month of april to record the above transactions. 3. prepare a schedule of cost of goods manufactured. 4.1 compute gross profit for april. 4.2 show how to present the inventories on the april 30 balance sheet.