Question 1
9. The standard quantity allowed for the units produced was 6,500 pounds, the standard price was $2.50 per pound, and the materials quantity variance was $375 favorable. Each unit uses 1 pound of materials. How many units were actually produced? A) 6,350 B) 6,500 C) 15,875 D) 6,650 10. A company developed the following per-unit standards for its product: 2 gallons of direct materials at $6 per gallon. Last month, 3,000 gallons of direct materials were purchased for $17,100. The direct materials price variance for last month was A) $17,100 favorable. B) $450 favorable. C) $900 favorable. D) $900 unfavorable. 11. The per-unit standards for direct materials are 2 pounds at $4 per pound. Last month, 11,200 pounds of direct materials that actually cost $42,400 were used to produce 6,000 units of product. The direct materials quantity variance for last month was A) $3,200 favorable. B) $2,400 favorable. C) $3,200 unfavorable. D) $5,600 unfavorable. 12. The standard number of hours that should have been worked for the output attained is 10,000 direct labor hours and the actual number of direct labor hours worked was 10,500. If the direct labor price variance was $10,500 unfavorable, and the standard rate of pay was $15 per direct labor hour, what was the actual rate of pay for direct labor? A) $14 per direct labor hour B) $12 per direct labor hour C) $16 per direct labor hour D) $15 per direct labor hour 13. A company uses 40,000 gallons of materials for which it paid $9.00 a gallon. The materials price variance was $80,000 favorable. What is the standard price per gallon? A) $2.00 B) $7.00 C) $10.00 D) $11.00
Question 2
Write a business memorandum to the CEO of Company G in which you, explain and justify for each ratio and trend whether the ratio or trend indicates a strength of the company; a likely weekness, threat, or emerging problem; or a satisfactory condition that management should not view as a strength or weakness.,I want to be sure the correct numbers were used for this memo, the first line of the memo states "for the ninth year" the years in this assignment are years 11 & 12. Thanks! Memorandum TO: C.E.O of company G. SUBJECT: Analysis of Financial Statements Company G DATE: 28/09/2011 Please be informed that based on the records provided for the ninth Year, the following have been noted: 1. The current ratio falls below the industry average, both acid-test ratio and inventory turnover fell below the lowest industry levels. These standards are set by the average of these businesses in this size range. However, based on industry standards, your company is less desirable to creditors. 2. Your receivables turnover is very much higher than the industry average. This means that your company is very good at collecting account sales (strength). However, this does not compensate for a slower inventory turnover (weakness), which means that your company is overstocking inventory and is slow in selling it. It is advisable that you make an analysis of your stocks and categorize them according to their movements (non-moving, slow-moving and fast-moving). 3. Although sales has increased by 9% this year, cost of goods sold cost also increased by 8% and other operating expenses by 11% (selling) and administrative costs by 8%. Over all this does not show a growth but a natural increase in both income and expense. Your company falls in the first quartile (designated Q1 ) Which is not very favorable. It would have been better if the costs are maintained at same level as Year 8. 4. Creditors may not be willing to lend your Company money so easily due to your current standing. Although there may be a few out there who would be willing to take on the risk, the cost would not make it beneficial. It would be advantageous to inquire with equity investors. Your company has a very desirable price earnings ratio and return on equity investments.
Question 3
The paper should: Be based on your reading and research relevant to the topic. Be 7 - 10 double-spaced pages, plus appendices, exhibits, and references. Include a one-page Executive Summary immediately following the title page that includes a statement of the major issue(s) and your conclusions and specific recommendations. The content of an Executive Summary is similar to an abstract. Properly cite reference sources: these may include course material, information from magazines, journals, and online sources. All reference sources must have a publication date within the last three years. Students who wish to use an older source publication should contact the instructor with the request and reason. Essay Topic List Ratio and Financial Statement Analysis - Your essay should critically analyze the benefits and limitations of ratio analysis, explaining what factors impact the meaningfulness of such measures and what new practices or theories may be emerging regarding the application of ratio and financial statement analysis. Emphasize practical applications and real-world use of ratios synthesizing your readings in published research or survey articles (Relevant Text Material: Parrino ? Chapters 3 & 4). Capital Budgeting, Net Present Value, and other Decision Tools - Write an essay that analyzes the pros and cons of the commonly used measures ( NPV, IRR, PI, MIRR, DPB) and come to a conclusion based on the literature that you surveyed as to which methods are theoretically correct and those popular. Emphasize real-world practices of capital budgeting methods, including project approval processes. Synthesize the discussions in published research or survey articles (Text Material: Parrino ? Chapter 10). Financial Management in Multinational Organizations - Write an essay that describes how multinational organizations use the financial management practices, for example use of debt, dividend policy, managerial ownership, corporate governance, etc. Topics in (1) and (2) above can be included, but the essay and references should focus on international differences and practices in corporations/organizations outside U.S. Financial Management in Nonprofit Organizations - Discuss financial management in nonprofit organizations and write an essay that compares and contrasts the application of financial management techniques in nonprofit and for-profit organizations. Sources of funds, use of debt, performance evaluation (efficiency in use of contributions and meeting the organization?s objectives), governance mechanisms in non-profits, etc. would be good topics/issues for discussion in the essay. Supply Chain Management (SCM) and Customer Relationship Management (CRM) Systems - Write an essay comparing the traditional management systems to the above two systems ? in terms of differences in approaches, achieving efficiencies, cost savings, and firm profitability. Include in your essay the findings from different studies that have analyzed/examined alternative approaches to SCM and CRM (Text Material: Jiambalvo ? Chapter 1). Cost Allocations & Activity Based Costing (ABC) ? Describe the cost allocation and ABC approaches in for-profit firms (corporations) and the different ways of implementation in real-world business enterprises. Analyze ABC?s potential strengths and weaknesses within a company. Include a discussion of steps needed to ensure a successful implementation of ABC, the associated costs & benefits, efficiency gains, profitability implications, etc. (Text Material: Jiambalvo ? Chapter 6). Costing & Pricing Decisions ? Write an essay on the practice of cost allocations (particularly joint costs, sunk costs, and opportunity costs) and pricing decisions (e.g., cost-plus pricing, target costing, and activity-based pricing) in corporations. Include in your discussion the major differences in those various approaches and their appropriateness in the context of the nature of costs, industry differences, competitiveness, etc. Also relate the implications for firm?s profitability (Text Material: Jiambalvo ? Chapters 7 & 8). This includes proper writing style, organization, grammar, and spelling, as well as integration of course-related material. The writing style must follow the Publication Manual of the American Psychological Association , 5 th edition. Citations for online sources should include the online address (URL) and access date as well as the citation for the specific reference. Do not use abstracts, use full-text articles. Publications that may be relevant for the topics listed below include: Strategic Finance, The Journal of Business Finance and Accounting, CFO Magazine, Nonprofit World, Harvard Business Review, or other accounting and financial journals.
Question 4
Chapter 3: Applying Excel Data Allocation base Machine-hours Estimated manufacturing overhead cost $300,000 Estimated total amount of the allocation base 75,000 machine-hours Actual manufacturing overhead cost $290,000 Actual total amount of the allocation base 68,000 machine-hours Enter a formula into each of the cells marked with a ? below Computation of the predetermined overhead rate Estimated manufacturing overhead cost $300,000 Estimated total amount of the allocation base 75,000 machine-hours Predetermined overhead rate ? per machine-hour Computation of underapplied or overapplied manufacturing overhead Actual manufacturing overhead cost ? Manufacturing overhead cost applied to Work in Process during the year: Predetermined overhead rate ? per machine-hour Actual total amount of the allocation base ? machine-hours Manufacturing overhead applied ? Underapplied (overapplied) manufacturing overhead ? 1. Check your worksheet by changing the estimated total amount of the allocation base in the Data area to 60,000 machine-hours, keeping all of the other data the same as in the original example. If your worksheet is operating properly, the predetermined overhead rate should now be $5.00 per machine-hour. If you do not get this answer, find the errors in your worksheet and correct them. How much is the underapplied (overapplied) manufacturing overhead? Did it change? Why or why not? 2. Determine the underapplied (overapplied) manufacturing overhead for a different company with the following data: Allocation base . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Machine-hours Estimated manufacturing overhead cost . . . . . . . . . . . . . . . . $100,000 Estimated total amount of the allocation base . . . . . . . . . . . 50,000 machine-hours Actual manufacturing overhead cost . . . . . . . . . . . . . . . . . . $90,000 Actual total amount of the allocation base . . . . . . . . . . . . . . 40,000 machine-hours 3. What happens to the underapplied (overapplied) manufacturing overhead from part (2) if the estimated total amount of the allocation base is changed to 40,000 machine-hours and everything else remains the same? Why is the amount of underapplied (overapplied) manufacturing overhead different from part (2)? 4. Change the estimated total amount of the allocation base back to 50,000 machine-hours so that the data looks exactly like it did in part (2). Now change the actual manufacturing overhead cost to $100,000. What is the underapplied (overapplied) manufacturing overhead now? Why is the amount of underapplied (overapplied) manufacturing overhead different from part (2)?
Question 5
"Your company has been offered credit terms of 4/30, net 90 days. What will be the nominal annual percentage cost of its nonfree trade credit if it pays 120 days after the purchase? (Assume a 365-day year.) a. 16.05% b. 16.90% c. 17.74% d. 18.63% e. 19.56% (TCO E) Daves Inc. recently hired you as a consultant to estimate the company's WACC. You have obtained the following information. (1) The firm's noncallable bonds mature in 20 years, have an 8.00% annual coupon, a par value of $1,000, and a market price of $1,050.00. (2) The company's tax rate is 40%. (3) The risk-free rate is 4.50%, the market risk premium is 5.50%, and the stock's beta is 1.20. (4) The target capital structure consists of 35% debt and the balance is common equity. The firm uses the CAPM to estimate the cost of common stock, and it does not expect to issue any new shares. What is its WACC? a. 7.16% b. 7.54% c. 7.93% d. 8.35% e. 8.79% Zhdanov Inc. forecasts that its free cash flow in the coming year, that is, at t = 1, will be -$10 million, but its FCF at t = 2 will be $20 million. After Year 2, FCF is expected to grow at a constant rate of 4% forever. If the weighted average cost of capital is 14%, what is the firm's value of operations, in millions? a. $158 b. $167 c. $175 d. $184 e. $193 Based on the corporate valuation model, the value of a company's operations is $900 million. Its balance sheet shows $70 million in accounts receivable, $50 million in inventory, $30 million in short-term investments that are unrelated to operations, $20 million in accounts payable, $110 million in notes payable, $90 million in long-term debt, $20 million in preferred stock, $140 million in retained earnings, and $280 million in total common equity. If the company has 25 million shares of stock outstanding, what is the best estimate of the stocks price per share? a. $23.00 b. $25.56 c. $28.40 d. $31.24 e. $34.36 Which of the following statements is correct? (Points: 5) The NPV, IRR, MIRR, and discounted payback (using a payback requirement of 3 years or less) methods always lead to the same accept/reject decisions for independent projects. For mutually exclusive projects with normal cash flows, the NPV and MIRR methods can never conflict, but their results could conflict with the discounted payback and the regular IRR methods. Multiple IRRs can exist, but not multiple MIRRs. This is one reason some people favor the MIRR over the regular IRR. If a firm uses the discounted payback method with a required payback of 4 years, then it will accept more projects than if it used a regular payback of 4 years. The percentage difference between the MIRR and the IRR is equal to the project?s WACC. 3. (TCO D) The Ramirez Company's last dividend was $1.75. Its dividend growth rate is expected to be constant at 25% for 2 years, after which dividends are expected to grow at a rate of 6% forever. Its required return (rs) is 12%. What is the best estimate of the current stock price? a. $41.58 b. $42.64 c. $43.71 d. $44.80 e. $45.92 he ABC Corporation's budgeted monthly sales are $4,000. In the first month, 40% of its customers pay and take the 3% discount. The remaining 60% pay in the month following the sale and don't receive a discount. ABC's bad debts are very small and are excluded from this analysis. Purchases for next month's sales are constant each month at $2,000. Other payments for wages, rent, and taxes are constant at $500 per month. Construct a single month's cash budget with the information given. What is the average cash gain or (loss) during a typical month for the ABC Corporation?"
