Question 1
Case 1: Coffee Bean Ltd. (CBL) is currently managing two projects which process and distribute two blends of coffee: Tropicana coffee project and Tarime coffee project. The company buys coffee beans from around the world and roasts, blends, and packages them for resale. CBL currently has 40 different coffees that it sells to gourmet shops in one-pound bags. The major cost of the coffee is raw materials. However, the company's predominantly automated roasting, blending, and packing process requires a substantial amount of manufacturing overhead. The company uses relatively little direct labour. Some of CBL's coffees are very popular and sell in large volumes, while a few of the newer blends have very low volumes. CBL prices its coffee at manufacturing cost plus a mark-up of 30%. If CBL's prices for certain coffees are significantly higher than market, adjustments are made to bring CBL's prices more into alignment with the market since customers are somewhat price conscious. For the coming year, CBL's budget includes estimated manufacturing overhead cost of ?3,000,000. CBL assigns manufacturing overhead to products on the basis of direct labour-hours. The expected direct labour cost totals ?600,000, which represents 50,000 hours of direct labour time. Based on the sales budget and expected raw materials costs, the company will purchase and use ?6,000,000 of raw materials (mostly coffee beans) during the year. The expected costs for direct materials and direct labour for one-pound bags of two of the company's coffee projects appear below. Tropicana coffee Tarime coffee Direct materials ?4.20 ?3.20 Direct labour (0.025 hours per bag) ?0.30 ?0.30 CBL's controller believes that the company's traditional costing system may be providing misleading cost information. To determine whether or not this is correct, the controller has prepared an analysis of the year's expected manufacturing overhead costs, as shown in the following table: Activity cost pool Activity measure Expected activity for year Expected cost for the year Purchasing Purchase orders 1,710 orders ?513,000 Material handling Number of setups 1,800 setups ?720,000 Quality control Number of batches 600 batches ?144,000 Roasting Roasting hours 90,100 hours ?961,000 Blending Blending hours 33,500 hours ?402,000 packaging Packaging hours 25,000 hours ?206,000 Total manufacturing overhead cost ?3,000,000 Data regarding the expected production of Tropicana and Tarime coffee projects are presented below. Tropicana project Tarime project Expected sales ?100,000 ?2,000 Batch size 3 per batch 3 per batch Setups ?10,000 ?500 Purchases order size ?20,000 ?500 Roasting time per ?100 1 hour 1 hour Blending time per ?100 0.5 hour 0.5 hour Packaging time per ?100 0.1 hour 0.1 hour REQUIRED: 1. Using direct labour-hours as the base for assigning manufacturing overhead cost to products, do the following: a) Determine the predetermined overhead rate that will be used during the year. b) Determine the unit product cost of one pound of the Tropicana coffee and one pound of the Tarime coffee. 2. Using activity-based costing as the basis for assigning manufacturing overhead cost to products, do the following: a) Determine the total amount of manufacturing overhead cost assigned to the Tropicana coffee and to the Tarime coffee for the year. b) Using the data developed in (2a) above, compute the amount of manufacturing overhead cost per pound of the Tropicana coffee and the Tarime coffee. Round all computations to the nearest whole centre. c) Determine the unit product cost of one pound of the Tropicana coffee and one pound of the Tarime coffee. 3. Write a brief memo to the president of CBL explaining what you have found in (1) and (2) above and discussing the implications to the company of using direct labour as the base for assigning manufacturing overhead cost to products. Case 2: Cyprus Fuel Project manufactures and sells a single product, EcoPlus, a fuel saving device for motor vehicles in the domestic market. The Project commenced business operations on January 2010 and sales in the first six months were brisk due to the world wide increase in fuel prices. However the second half the year saw a drop in sales as a result of more competing companies entering the market and a gradual reduction in fuel prices. The following summarised profit and loss account has been prepared by the previous management accountant: YEAR 2010 1st half year 2nd half year Sales 1st half: 35,000 units ?1,400,000 2nd half: 25,000 units ?1,000,000 Direct material ?350,000 ?250,000 Direct labour ?280,000 ?200,000 Manufacturing overhead ?245,000 ?195,000 Administration overheads ?15,000 ?15,000 Selling overheads ?165,000 ?1,055,000 ?145,000 ?805,000 Net profit ?345,000 ?195,000 * Selling overheads include sales commission of 5% based on sales value. The Project Manager (PM), an engineer who founded the Project, recently attended a seminar at UEL for non-accountants on ?Cost-Volume-Profit Analysis and its benefits?. Although he found the seminar interesting, he would like to know more about the following: (a) How does the economist?s breakeven chart differ from the accountant?s breakeven chart? (b) The term ?fixed cost? has been explained in the seminar as ?a cost that remains unchanged when production activity changes over a period of time and over a certain relevant range?. He is unsure of what is meant by ?period of time? and ?relevant range? as he believes that there?s no such thing as a fixed cost and that all costs are variable in the long term. (c) An explanation of the breakeven point and margin of safety of the Project based on its present cost structure for the 2nd half year of 2010, and a brief explanation of the High-Low method of cost estimation used in your calculations, including its weaknesses as well as suggesting an alternative method. The marketing manager feels that the current marketing strategy used by the Project is no longer effective. The Project presently employs a large sales staff on a 3 monthly contractual basis and are paid a basic salary together with a sales commission. The sales staff needs to fulfil the monthly sales quota set by the Project for their contract to be renewed further. The marketing manager has suggested the following proposals to stop the decline in sales for the next six months: Proposal 1 Rent floor space in busy shopping malls located in other major cities not served by the current sales staff and set up booths using the rented space to promote and sell the Project?s product. Some of the existing sales staff will be seconded to manage these booths. Spend an extra ?38,000 on advertising and promotional materials. Rental of floor space would amount to ?72,000. The marketing manager is confident that together with a 5% reduction in unit selling price, sales volume will increase by 30% over the 2nd half year sales of 2010. Unit material cost will be reduced by 5% due to bulk discount. It is assumed that all other costs remain unchanged. Proposal 2 Reduce the present number of sales staff by not renewing the contracts of those who failed to fulfil the sales quota set by the Project. Appoint workshops/garages (motor vehicle repair shops) and shops selling car accessories to be the Project?s authorised dealers. Additional promotional materials (posters, leaflets etc.) for the authorised dealers would cost ?15,000. Fixed selling overheads (i.e. salaries of sales staff) will be reduced by ?75,000. The marketing manager is confident that with a 10% reduction in unit selling price and a sales commission of 18% of selling price to be paid to all authorised dealers and remaining sales staff, the sales volume will increase by 15% over the 2nd half year of 2010 sales. Unit material cost will be reduced by 3%. It is assumed that all other costs will remain unchanged. REQUIREMENT: You are required to write a report to the Project Manager discussing the points raised by him and to evaluate the two proposals put forward by the marketing manager. Your report should include: 1. A discussion on the three points raised by the managing director. 2. A breakeven graph and profit-volume graph for each proposal indicating the breakeven points and margin of safety. Verify your answers by calculations. All graphs are to be drawn and computations be made using MS Excel spreadsheet. 3. A comparison between the two proposals clearly stating any assumptions made. 4. A recommendation to the managing director on which proposal to accept.,hello sir, when can i expect the answer from your side.,Hello sir, when can i expect the answer from you..
Question 2
Agree to $80.00 I also submitted a vocab that is due today have you seen it?,did you get the questions? if not here they are again: The US Mint selects ten pennies from the production line to test the hypothesis that the mean weight of each penny is at least 6 grams. The normally-distributed weights (in grams) of these pennies are as follows: 8, 7, 4, 10, 1, 8, 6, 4, 4, 3. Assume = 0.01. ??????????State the null and alternate hypotheses ??????????Calculate the sample mean and standard deviation ??????????Determine which test statistic is appropriate (z or t), and calculate its value. ??????????Determine the critical value(s). vvv -------- A watch manufacturer creates watch springs whose properties must be consistent. In particular, the standard deviation in their weights must be no greater than 3.0 grams. Fifteen watch springs are selected from the production line and measured; their weights are 9, 9, 2, 1, 1, 10, 4, 8, 10, 9, 3, 9, 9, 6, and 8 grams. Assume = 0.01. ??????????State the null and alternate hypotheses ??????????Calculate the sample standard deviation ??????????Determine which test statistic is appropriate (chi-square or F), and calculate its value. ??????????Determine the critical value(s). ??????????State your decision: Should the null hypothesis be rejected? ------------- A telephone survey gives 371 consumers two choices: Do they prefer Coke or Pepsi? Exactly 290 of those surveyed state that they prefer Coke. Assuming that = 0.02, test the hypothesis that the proportion of the population that prefers Coke is 40%. ??????????State the null and alternate hypotheses ??????????Calculate the sample proportion ??????????Calculate the value of the test statistic. ??????????Determine the critical value(s). ??????????State your decision: Should the null hypothesis be rejected? ----------- Two groups of ten sprinters run 100 meters. The times required by sprinters in the first group are as follows: 12.1 12.5 13.3 12.8 14.0 13.6 10.8 12.0 14.7 13.8 The times required by sprinters in the second group are as follows: 14.1 19.7 12.3 17.9 19.8 11.3 12.2 14.4 13.7 18.0 Assuming that = 0.02, test the hypothesis that the means of the two populations are equal. ??????????State the null and alternate hypotheses ??????????Calculate the mean and standard deviation for each group ??????????Calculate the value of the test statistic. ??????????Determine the critical value(s). ??????????State your decision: Should the null hypothesis be rejected? ---------- A machine produces 3-inch nails. A sample of 12 nails was selected and their lengths determined. The results are as follows: 2.97 2.86 2.82 2.86 2.95 2.80 2.81 2.98 2.88 2.83 2.95 2.95 Assuming that a = 0.01, test the hypothesis that the population mean is equal to 3. ??????????State the null and alternate hypotheses ??????????Calculate the mean and standard deviation ??????????Determine which test statistic applies, and calculate it ??????????Determine the critical value(s). ??????????State your decision: Should the null hypothesis be rejected? ------------- A random sample of 51 observations was selected from a normally distributed population. The sample mean was ybar = 22, and the sample variance was s2 = 11.0. Does the sample show sufficient reason to conclude that the population standard deviation is not equal to 5 at the 0.02 level of significance? Use the p-value method. ??????????State the null and alternate hypotheses ??????????Determine which test statistic applies, and calculate it ??????????Determine the corresponding probability, and compare to ??????????State your decision: Should the null hypothesis be rejected? --------- An insurance company states that 75% of its claims are settled within 5 weeks. A consumer group selected a random sample of 65 of the company?s claims and found 43 of the claims were settled within 5 weeks. Is there enough evidence to support the consumer group?s claim that fewer than 75% of the claims were settled within 5 weeks? Test using the traditional approach with ? = 0.05. ??????????State the null and alternate hypotheses ??????????Calculate the sample proportion ??????????Determine which test statistic applies, and calculate it ??????????Determine the critical value(s). ??????????State your decision: Should the null hypothesis be rejected? ----------- teacher wishes to compare two different groups of students with respect to their mean time to complete a standardized test. The time required is determined for each group. The data summary is given below. Test the claim at = 0.10, that there is no difference in variance. Give the critical region, test statistic value, and conclusion for the F test. n1 = 60 s1 = 48 n2 = 60 s2 = 65 a = 0.10 ??????????State the null and alternate hypotheses ??????????Determine which test statistic applies, and calculate it ??????????Determine the critical region ??????????State your decision: Should the null hypothesis be rejected? ------------ A machine produces 9 inch latex gloves. A sample of 48 gloves is selected, and it is found that 27 are shorter than they should be. Find the 99% confidence interval on the proportion of all such gloves that are shorter than 9 inches. ---------------- . The pulse rates below were recorded over a 30-second time period, both before and after a physical fitness regimen. The data is shown below for 8 randomly selected participants. Is there sufficient evidence to conclude that a significant amount of improvement took place? Assume pulse rates are normally distributed. Test using = 0.05. ??????????State the null and alternate hypotheses ??????????Calculate the mean and standard deviation ??????????Determine which test statistic applies, and calculate it ??????????Determine the critical value(s). ??????????State your decision: Should the null hypothesis be rejected? Before 53 42 45 43 45 40 38 42 After 32 58 44 58 54 59 45 54 . You are given the following data. Test the claim that there is a difference in the means of the two groups. Use = 0.01. Group A Group B xbar1 = 5 xbar2 = 7 s1 = 12 s2 = 18 n1 = 63 n2 = 86 ??????????State the null and alternate hypotheses ??????????Determine which test statistic applies, and calculate it ??????????Determine the critical value(s). ??????????State your decision: Should the null hypothesis be rejected? ---------------- A sample of size n = 20 is selected from a normal population to construct a 90% confidence interval estimate for a population mean. The interval was computed to be (4.00 to 4.20). Determine the s
Question 3
. Statement of cash flows preparation. Selected financial statement information and additional data for Johnston Enterprises is presented below. Prepare a statement of cash flows for the year ending December 31, 2010 Current Assets: Additional Information: During the year, Johnston sold equipment with an original cost of $153,000 and accumulated depreciation of $119,000 and purchased new equipment for $272,000 December 31, 2010 2009 Cash $153,000 $119,000 Accounts Receivable 238,000 306,000 Inventory 391,000 340,000 Total Current Assets 782,000 765,000 Property, Plant, and Equipment 1,241,000 1,122,000 Less: Accumulated Depreciation (476,000) (442,000) Total Assets $1,547,000 $1,445,000 Current Liabilities: Accounts Payable $187,000 $102,000 Notes Payable 51,000 68,000 Income Tax Payable 85,000 76,500 Total Current Liabilities 323,000 246,500 Bonds Payable 340,000 391,000 Total Liabilities 663,000 637,500 Stockholders' Equity: Common Stock 510,000 467,500 Retained Earnings 374,000 340,000 Total Stockholders' Equity 884,000 807,500 Total Liabilities & Stockholders' Equity $1,547,000 $1,445,000 Sales 1,615,000 $1,513,000 Less Cost of Goods Sold 731,000 731,000 Gross Profit 884,000 782,000 Expenses: Depreciation Expense 153,000 136,000 Salary Expense 391,000 357,000 Interest Expense 34,000 34,000 Loss on Sale of Equipment 17,000 0 Income Before Taxes 289,000 255,000 Less Income Tax Expense 119,000 102,000 Net Income $170,000 $153,000 Johnston Enterprises Balance Sheet and Income Statement Data December 31,,Please send answer as soon as possible. Thanks!,Thanks!
Question 4
4. Currently, LampSmart has two bonds listed in the Mergent Bond Record: a $500 million amount outstanding of 8.5% coupon bond due 2018 trading at 105% of par with a YTM of 7.2%; a $900 million amount outstanding of 6.25% coupon bond due 2022 trading at 99% of par with a YTM of 6.8%. LampSmart also has 2 million shares of preferred stocks outstanding with book value of $120 per share. The cumulative annual dividend is 10.0%. The preferred stock is selling for $140. The company?s common stock is selling at $42 per share which paid quarterly dividend of $0.40 last year. The expected quarterly dividend is $0.44. The total number of share outstanding is 100 million. LampSmart?s marginal tax rate is 29%. a) Estimate LampSmart?s After-tax cost of debt. b) Estimate LampSmart?s cost of preferred stock. c) Estimate LampSmart?s cost of common stock. d) Estimate LampSmart?s weight of debt based on its market value. e) Estimate LampSmart?s weight of preferred stock based on its market value. f) Estimate LampSmart?s weight of common stock based on its market value. g) Estimate WACC for LampSmart. Please round all intermediate calculations to 4-decimal places and round final answers to 2-decimal places when applicable.
Question 5
Complete the following three exercises and submit to your instructor. Be sure to show your work for calculations to earn full credit. Sales and Production Budgets (8-12): The marketing department of Jessi Corporation has submitted the following sales forecast for the upcoming fiscal year (all sales are on account): 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Units to be produced 12,000 14,000 13,000 11,000 The selling price of the company's product is $18.00 per unit. Management expects to collect 65% of sales in the quarter in which the sales are made, 30% in the following quarter, and 5% of sales are expected to be "'uncollectible. The beginning balance of accounts receivable, all of which is expected to be collected in the first quarter, is $70,200. The company expects to start the first quarter with 1,650 units in finished goods inventory. Management desires an ending finished goods inventory in each quarter equal to 15% of the next quarter's budgeted sales. The desired ending finished goods inventory for the fourth quarter is 1,850 units. Prepare the company's sales budget and schedule of expected cash collections. Prepare the company's production budget for the upcoming fiscal year. Direct Materials and Direct Labor Budgets (8-13): The production department of Hareston Company has submitted the following forecast of units to be produced by quarter for the upcoming fiscal year: 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Units to be produced 7,000 8,000 6,000 5,000 In addition, the beginning raw materials inventory for the first quarter is budgeted to be 1,400 pounds and the beginning accounts payable for the first quarter is budgeted to be $2,940. Each unit requires 2 pounds of raw material that costs $1.40 per pound. Management desires to end each quarter with an inventory of raw materials equal to 10% of the following quarter's production needs. The desired ending inventory for the fourth quarter is 1,500 pounds. Management plans to pay for 80% of raw material purchases in the quarter acquired and 20% in the following quarter. Each unit requires 0.60 direct labor-hours and direct labor-hour workers are paid $14.00 per hour. Prepare the company's direct materials budget and schedule of expected cash disbursements for purchases of materials for the upcoming fiscal year. Prepare the company's direct labor budget for the upcoming fiscal year, assuming that the direct labor workforce is adjusted each quarter to match the number of hours required to produce the forecasted number of units produced. Direct Labor and Manufacturing Overhead Budgets (8-14): The production department of Raredon Corporation has submitted the following forecast of units to be produced by quarter for the upcoming fiscal year: 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Units to be produced 12,000 14,000 13,000 11,000 Each unit requires 0.70 direct labor-hours, and direct labor-hour workers are paid $10.50 per hour. In addition, the variable manufacturing overhead rate is $1.50 per direct labor-hour. The fixed manufacturing overhead is $80,000 per quarter. The only noncash element of manufacturing overhead is depreciation, which is $22,000 per quarter. Prepare the company's direct labor budget for the upcoming fiscal year, assuming that the direct labor workforce is adjusted each quarter to match the number of hours required to produce the forecasted number of units produced. Prepare the company's manufacturing overhead budget.
