Air United, Inc. manufactures two products: missile range instruments and space pressure gauges. During April, 50 range instruments and 200 pressure gauges were produced, and overhead costs of $87,830 were estimated. An analysis of estimated overhead costs reveals the following activities.

Activities Cost Drivers Total Cost
1. Materials handling Number of requisitions $35,360
2. Machine setups Number of setups 27,270
3. Quality inspections Number of inspections 25,200
. $87,830
The cost driver volume for each product was as follows.

Cost Drivers Instruments Gauges Total
Number of requisitions 380 660 1,040
Number of setups 220 285 505
Number of inspections 260 265 525

Determine the overhead rate for each activity.

Overhead Rate
Materials handling $enter
Machine setups $enter
Quality inspections $enter

Resources and capabilities, such as interpersonal relations among managers and a firm's culture, that may be costly to imitate because they are beyond the ability of firms to systematically manage and influence are referred to asanswers: socially complex.causally ambiguous.path dependent.the result of unique historical conditions.

Consider how health insurance affects the quantity of health care services performed. suppose that the typical medical procedure has a cost of $160, yet a person with health insurance pays only $40 out of pocket. her insurance company pays the remaining $120. (the insurance company recoups the $120 through premiums, but the premium a person pays does not depend on how many procedures that person chooses to undergo.) consider the following demand curve in the market for medical care. use the black point (plus symbol) to indicate the quantity of procedures demanded if each procedure has a price of $160. then use the grey point (star symbol) to indicate the quantity of procedures demanded if each procedure has a price of $40. q d at p=$160 q d at p=$40 0 10 20 30 40 50 60 70 80 90 100 200 180 160 140 120 100 80 60 40 20 0 price of medical procedures quantity of medical procedures demand if the cost of each procedure to society is truly $160, the quantity that maximizes total surplus is procedures. economists often blame the health insurance system for excessive use of medical care. given your analysis, the use of care might be viewed as excessive because consumers get procedures whose value is than the cost of producing them.

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