Burk Company uses activity-based costing. Two of Burk Company’s production activities are spinning and molding. Assume the company estimates manufacturing overhead costs to be $20,000 per month for spinning and $35,000 per month for molding. Burk Company allocates spinning costs based on the number of machine hours used. Molding costs are allocated based on number of batches. Suppose Burk Company estimates it will use 50,000 machine hours and have 60,000 batches. What is the predetermined overhead allocation rate for spinning?

Suppose that two firms produce differentiated products and compete in prices. as in class, the two firms are located at two ends of a line one mile apart. consumers are evenly distributed along the line. the firms have identical marginal cost, $60. firm b produces a product with value $110 to consumers.firm a (located at 0 on the unit line) produces a higher quality product with value $120 to consumers. the cost of travel are directly related to the distance a consumer travels to purchase a good. if a consumerhas to travel a mile to purchase a good, the incur a cost of $20. if they have to travel x fraction of a mile, they incur a cost of $20x. (a) write down the expressions for how much a consumer at location d would value the products sold by firms a and b, if they set prices p_{a} and p_{b} ? (b) based on your expressions in (a), how much will be demanded from each firm if prices p_{a} and p_{b} are set? (c) what are the nash equilibrium prices?