Question 1
Flexible Budget Performance Report [LO1, LO4] AirQual Test Corporation provides on-site air quality testing services. The company has provided the following data concerning its operations: Fixed Variable Actual Component Component Total for per Month per Job February Revenue . . . . . . . . . . . . . . . . . . . . . $360 $18,950 Technician wages . . . . . . . . . . . . . . $6,400 $6,450 Mobile lab operating expenses . . . . $2,900 $35 $4,530 Office expenses . . . . . . . . . . . . . . . $2,600 $2 $3,050 Advertising expenses . . . . . . . . . . . $970 $995 Insurance . . . . . . . . . . . . . . . . . . . . $1,680 $1,680 Miscellaneous expenses . . . . . . . . . $500 $3 $465 The company uses the number of jobs as its measure of activity. For example, mobile lab operating expenses should be $2,900 plus $35 per job, and the actual mobile lab operating expenses for February were $4,530. The company expected to work 50 jobs in February, but actually worked 52 jobs. Required: Prepare a flexible budget performance report showing AirQual Test Corporation?s activity variances and revenue and spending variances for February. Comprehensive Variance Analysis [LO2, LO3, LO4] Miller Toy Company manufactures a plastic swimming pool at its Westwood Plant. The plant has been experiencing problems as shown by its June contribution format income statement below: Budgeted Actual Sales (15,000 pools) . . . . . . . . . . . . . . . . . . . . $450,000 $450,000 Variable expenses: Variable cost of goods sold* . . . . . . . . . . . . 180,000 196,290 Variable selling expenses . . . . . . . . . . . . . . 20,000 20,000 Total variable expenses . . . . . . . . . . . . . . . . . . 200,000 216,290 Contribution margin . . . . . . . . . . . . . . . . . . . . . 250,000 233,710 Fixed expenses: Manufacturing overhead . . . . . . . . . . . . . . . 130,000 130,000 Selling and administrative . . . . . . . . . . . . . . 84,000 84,000 Total fixed expenses . . . . . . . . . . . . . . . . . . . . 214,000 214,000 Net operating income . . . . . . . . . . . . . . . . . . . $ 36,000 $ 19,710 Janet Dunn, who has just been appointed general manager of the Westwood Plant, has been given instructions to ?get things under control.? Upon reviewing the plant?s income statement, Ms. Dunn has concluded that the major problem lies in the variable cost of goods sold. She has been provided with the following standard cost per swimming pool: Standard Quantity Standard Standard Price Standard or Hours or Rate Cost Direct materials . . . . . . . . . . . . . . . . . 3.0 pounds $2.00 per pound $ 6.00 Direct labor . . . . . . . . . . . . . . . . . . . . 0.8 hours $6.00 per hour 4.80 Variable manufacturing overhead . . . 0.4 hours* $ 3.00 per hour 1.20 Total standard cost . . . . . . . . . . . . . . $12.00 *Based on machine-hours. During June the plant produced 15,000 pools and incurred the following costs: a. Purchased 60,000 pounds of materials at a cost of $1.95 per pound. b. Used 49,200 pounds of materials in production. (Finished goods and work in process inventories are insignificant and can be ignored.) c. Worked 11,800 direct labor-hours at a cost of $7.00 per hour. d. Incurred variable manufacturing overhead cost totaling $18,290 for the month. A total of 5,900 machine-hours were recorded. It is the company?s policy to close all variances to cost of goods sold on a monthly basis. Required: 1. Compute the following variances for June: a. Direct materials price and quantity variances. b. Direct labor rate and efficiency variances. c. Variable overhead rate and efficiency variances. 2. Summarize the variances that you computed in (1) above by showing the net overall favorable or unfavorable variance for the month. What impact did this figure have on the company?s income statement? Show computations. 3. Pick out the two most significant variances that you computed in (1) above. Explain to Ms. Dunn possible causes of these variances.,Hi, Micheal This assignment has 2 parts to it, I want to thank you again for all your help. Barbara,Micheal, On the flexible performance report, since the techican wages went up 50.00, won't that be unfavorable revenue and spending for the company. thanks
Question 2
Instructions For this project, you will write a paper that involves designing, conducting, and analyzing results from your own experiment to test the sensory discrimination of one of your friends. Choose a friend who claims to be able to tell the difference between two very similar objects. You are free to choose the two objects, however here are some ideas to get you thinking along the right lines: Coke vs. Pepsi, Regular vs. Decaf coffee, Sweet 'n' Low vs. Equal sweetener, butter vs. margarine, or Ghiradelli chocolate vs. Hershey?s chocolate. Which you choose depends on whoever your ?expert? testing subject is. You will need to find an expert on your own, and will need to supply your own materials. The cost of your experiment will obviously depend primarily on the objects to be tested; testing to see if the subject can discern between bottled water and tap water will only cost a couple dollars, testing to see if the subject can discern between different brands of caviar will get pricey fast! Your paper should consist of a single document in Microsoft Word format. After you have completed your paper, you must submit it to Turnitin.com. Login and password details for Turnitin.com can be found in the classroom. 1. First, you should brainstorm to find a friend who is either a self-proclaimed expert or has some food/beverage related idiosyncracy(1). 2. Determine a protocol for administering the test a) What should be done about random variations in the items to be tested? For example, how do you prevent temperature change in the product, or to make sure each cup of coffee is equally sweet or has the same amount of cream? Before conducting your experiment, carefully lay out the procedure for administering the test, such as how the coffee will be made, how the wine will be decanted, and so forth. This is related to the important issue of ensuring that each trial is independent (i.e. the previous trials aren?t tainting your taster?s sense of taste). If you have ever been to a wine tasting, you?ll notice that you can tell the difference between the first few sips of wine, but once you get to the 11th and 12th glass, it?s all sort of a blur (and not due to inebriation!). Carefully consider how you will attempt to overcome this problem. b) How many trials should be used in the test (for this, see Levine Chapter 7 and 8.4, or read up on the Fisher exact test)? Should they be paired or independent(2)? In what order should the items be presented? Should the experiment be run in one sitting or spaced out over a number of days? Done properly, the experiment should be designed such that if the expert has no expert skills, the result will be wholly governed by chance. The number and ordering of the trials should allow an expert to prove his or her abilities while simultaneously preventing a fraud from succeeding. You will want to keep the binomial distribution in mind when making these decisions. c) What conclusion could be drawn from a perfect score or from a test with one or more errors? For the design you are considering, list all possible results of the experiment. For each possible result, decide in advance what conclusion you will make if it occurs. In determining this mapping of outcomes to conclusions, consider the probability that someone with no powers of discrimination could wind up with each outcome. You may want to make adjustments in your design to increase the sensitivity of your experiment. For example, if someone can?t distinguish decaf coffee from regular, then just by guessing, he/she should still be right half of the time and there will be a small chance, which you should calculate, of being right 100% of the time. On the other hand, if the taster possesses some, but not perfect, skill in differentiation, he or she will make some mistakes. 3. Write out an instruction sheet for your experimental process. Conduct a ?dress rehearsal? on somebody other than your subject to work out kinks in the process. After the practice run, determine whether or not you want to make changes in your instruction sheet to address any problems that arose. This practice run is an extremely important step; many people make big mistakes in their first attempt and historically, students who have taken this step seriously have scored much more highly on this project than those who do not. 4. You should now be ready to run your experiment. Record your results CAREFULLY, and note any unusual occurrences in the experimental process. It may be a good idea to keep track of the order in which the samples are served to your subject. 5. Numerically, summarize the results and analyze the data. Do they support or contradict the claim that the subject possesses no sensory discrimination? Use your list of all possible events and subsequent actions to come to a conclusion. Discuss the reasons behind the decision that you have made. For ideas on how to analyze the data, see Levine Ch. 9 or use the Fisher exact test. 6. What changes would you make to your experimental process if you had the opportunity to do it again? Why didn't you pick these issues up when you did your practice run? You are to work individually on this assignment. You can find definitions of academic dishonesty and plagiarism at http://www.umuc.edu/policy/academic/aa15025.shtml, along with the procedures I will follow should I suspect any transgressions of such nature. Suggested Report Format with Headings Purpose of the study The purpose of the study formally explains why the study was important to conduct and write the null and alternative hypotheses of the study (see Levine Ch. 9.1 and read the lecture material in the classroom from session 8). Method The Method section explains how the study was conducted to collect data. The section should include the following: 1. Participants of the study. Who are they? Where did you get the participants for the study? Which sampling design was used to select the participants? 2. Experimental design. Which experimental/sampling design was used in the study? 3. Data Collection. Explain the method used to collect data. 4. Data Analysis. For hypothesis testing, explain how you plan to calculate the data. 5. Step-by-step procedure. Explain the explicit steps from beginning to end for conducting the study. If another researcher wants to replicate the study, the directions must contain precise information for conducting the study. Data Analysis Show the results of your data analysis, including tables and charts as necessary. You should also discuss, in plain English, the results of the data calculation, both in terms of magnitude and significance. Discussion Discuss what you learned from the data collected. Did the results support or not support the null hypothesis? Appendix Place the charts, tables, and other relevant documents in an appendix at the end of your paper. Your paper should contain between 5 and 7 pages of text, plus any additional charts/tables/graphs found in the appendix. -------------------------------------------------------------------------------- (1) While something simple like butter vs. margarine or bottled water vs. tap water is a reasonable topic, students who have been more creative in their subject selection have found this paper to be rather enjoyable. Some examples of creative subjects: Testing to see is one call tell the difference between freshly grated parmesan cheese and the Kraft brand parmesan cheese (in the green tube) One individual's wife maintained that the white candies from a box of Good 'N' Plenty candy did not taste as good as the pink candies. The test was to see if his wife could tell the difference. One individual had a friend who ran a wine tasting social group. She tested whether or not her friend could discern between red and white wine by bouquet alone. Note that this does not say that one of the more "creative" ideas will necessarily make for a better experiment, paper, or grade. You are more likely, however, to enjoy the process of conducting the experiment and analyzing the data should you put serious thought into your test subject. (2) Paired vs. independent?In the context of a Coke vs. Pepsi expert, for example, in a paired test, for each trial you present one of each type at the same time and tell your subject to identify which one is Coke and which is Pepsi. If you were doing independent trials, in each trial they?d get exactly one cup, filled with either Coke or Pepsi, and be asked to identify which it is.
Question 3
Federal Taxes Questions 1. (TCO E) In 2012, Uriah Stone received the following payments: ? Interest on refund of federal income tax for 2011: $400 ? Interest on award for personal injuries in 2009 automobile accident: $300 ? Interest on municipal bonds: $1,500 ? United States savings bonds interest (Series H): $1,000 What amount, if any, should Mr. Stone report as interest income on his 2012 tax return? 2. (TCO G) Would any of the following items be deductible on an individual's income tax return? If so, would the item be deductible for or from AGI? Explain each item. (a) Hobby expenditures of $2,000 in excess of hobby gross income (b) $3,000 loss on the sale of a personal sailboat (c) Interest of $8,000 on money borrowed to purchase tax-exempt securities (Points : 17) 3. (TCO F) Michael and Mary Mason sold for $380,000 in November of 2012 their residence that they had purchased in 2002 for $75,000. They made major capital improvements during their 10-year ownership totaling $25,000. (a) What is their excluded gain? How much must they recognize? (b) Suppose, instead, that the Masons sold their home for $720,000. They moved into a smaller house costing $220,000. What is their excluded gain? How much must they recognize? (Points : 17) 4. (TCO G) John Baron, a professional baseball player, raises Black Angus cattle under circumstances that would indicate that the activity is a hobby. His adjusted gross income for the year is $50,000, and he has $500 of other miscellaneous itemized deductions, all of which are subject to the two-percent floor. During the taxable year, the feed for the cattle cost $1,500. The income from the sale of cattle was $1,400. (a) Under the hobby loss rule, to what extent is the expense of $1,500 deductible? (b) Under the two-percent-of-adjusted-gross-income limitation, how much is the overall deductible amount of his itemized deductions? 5. (TCO I) Rick, a single individual with a salary of $45,000, incurred and paid the following expenses during the year: Student loan interest: $800 Medical expenses: $5,000 Alimony: $11,000 Mortgage interest on personal residence: $3,000 State income taxes: $4,000 Moving expenses: $1,500 Contribution to a traditional IRA: $2,000 Analyze the above expenses, and determine which ones are deductible for AGI. Please support your position. 6. (TCO I) Kim had the following transactions for 2012: Salary: $48,000 Damage award (compensatory) for city bus accident: $18,000 Loss on sale of stock investment: $5,600 Loan from father to purchase auto: $14,000 Alimony paid to ex-wife: $8,000 What is Kim's AGI for 2012? 7. (TCO F) Sara owns a sole proprietorship, and Phil is the sole shareholder of a C (regular) corporation. Each business sustained a $9,000 operating loss and a $2,000 capital loss for the year. Evaluate how these losses will affect the taxable income of the two owners? (Points : 17) 8. (TCO B) Dave forms a corporation and transfers property having a basis to him of $22,000 and a fair market value of $29,000 to the corporation for 1,000 shares of $11 par stock. One year later, Hank transfers property having a basis to him of $3,500 and a fair market value of $4,500 for 100 shares of the stock. Hank is not related to Dave. The corporation issued no other stock. (a) How much gain does Dave recognize on his exchange? What is the basis to Dave of his 1,000 shares? (b) What gain or loss is recognized by the corporation when it issues its shares to Dave? What is the basis to the corporation of the property it received from Dave? (c) What is the gain or loss that Hank recognizes on this transaction, and what is his basis in his 100 shares? 9. (TCO F) In 2012, OK Company had a net loss of $82,000 from operations. Jane owns OK Company and works 20 hours a week in the business. She has a large amount of income from other sources and is in the 35% marginal tax bracket. Would Jane's tax situation be better if OK Company were a proprietorship or a C corporation? Explain why. 10. (TCO H) On May 18, 2012, Sara purchased 30 shares of ABC stock for $210, and on October 29, 2012, she purchased 90 additional shares for $900. On November 28, 2012, she sold 48 shares, which could not be specifically identified, for $576, and on December 8, 2012, she sold another 25 shares for $150. What is her recognized gain or loss?
Question 4
The U.S. Banking Panic of 1933 and Federal Deposit Insurance Using the Harvard Business Case Study, The U.S. Banking Panic of 1933 and Federal Deposit Insurance (attached), answer the following questions by creating a Word document. Attach the document using the Add Attachments button. Remember to use the Submit button to complete your submission. Your answers should be a maximum of 1 page per question (and very possibly less). 1. In 1929 there were more than 25,000 commercial banks in the U.S. Today there are still approximately 7000 banks. In most other countries there are just a handful of major banks ? often 4 to 8 institutions dominate the market place. What explains the vastly different character of the banking system in the U.S. from that of other countries? Similarly, most other countries have not in the past provided government sponsored deposit insurance, though some have put it in place as part of their response to the credit crisis. Does the unique structure of the U.S. banking system indicate a greater need for such insurance? 2. As the case study notes, the banking panic of 1933 was not unique. There had been many previous banking panics periodically over the previous century. What made the banking panic of 1933 so extraordinary that it required significant action on the part of the U.S. government? 3. Similarly, what was so extraordinary about the credit crisis of 2007-2010 that it has become the centerpiece of economic policy and required such unusual actions as bailouts, government injections of equity into financial institutions, emergency lending facilities, etc.? 4. Perhaps the best known quotation of Roosevelt's was "The only thing we have to fear is fear itself". How does the thought behind that quotation fit into the provision of Federal deposit insurance? How does it relate to the response by governments around the world to the current credit crisis?
Question 5
2. (Points: 5) Factors contributing to a decline in the usefulness of a fixed asset may be divided into the following two categories 1. residual and salvage 2. physical and functional 3. salvage and functional 4. functional and residual Save Answer 3. (Points: 5) All of the following below are needed for the calculation of straight-line depreciation except 1. residual value 2. estimated life 3. cost 4. units produced Save Answer 4. (Points: 5) All leases are classified as either 1. long-term leases or current leases 2. capital leases or long-term leases 3. operating leases or current leases 4. capital leases or operating leases Save Answer 5. (Points: 5) If a fixed asset, such as a computer, were purchased on January 1st for $3,750 with an estimated life of 3 years and a salvage or residual value of $150, the journal entry for monthly expense under straight-line depreciation is: (Note: EOM indicates the last day of each month.) 1. EOM Accumulated Depreciation 1,200 Depreciation Expense 1,200 2. EOM Depreciation Expense 100 Accumulated Depreciation 100 3. EOM Accumulated Depreciation 100 Depreciation Expense 100 4. EOM Depreciation Expense 1,200 Accumulated Depreciation 1,200 Save Answer 6. (Points: 5) The process of transferring the cost of metal ores and other minerals removed from the earth to an expense account is called 1. depletion 2. amortization 3. depreciation 4. deferral Save Answer 7. (Points: 5) When a company discards machinery that is fully depreciated, this transaction would be recorded with the following entry 1. debit Machinery; credit Accumulated Depreciation 2. debit Accumulated Depreciation; credit Machinery 3. debit Depreciation Expense; credit Accumulated Depreciation 4. debit Cash; credit Accumulated Depreciation Save Answer 8. (Points: 5) A capital expenditure results in a debit to 1. a capital account 2. a liability account 3. an expense account 4. an asset account Save Answer 9. (Points: 5) When the amount of use of a fixed asset varies from year to year, the method of determining depreciation expense that best matches allocation of cost with revenue is 1. units-of-production 2. MACRS 3. straight-line 4. declining-balance Save Answer 10. (Points: 5) Expenditures that add to the utility of fixed assets for more than one accounting period are 1. capital expenditures 2. committed expenditures 3. revenue expenditures 4. current expenditures Save Answer 11. (Points: 5) Which of the following is true? 1. If using the units-of-production method, it is possible to depreciate more than the depreciable cost. 2. If using the straight line method, the amount of depreciation expense during the first year is higher than that of the double-declining-balance. 3. If using the double-declining-balance the total amount of depreciation expense during the life of the asset will be the highest. 4. Regardless of the depreciation method, the amount of total depreciation expense during the life of the asset will be the same. Save Answer 12. (Points: 5) Fixed assets are ordinarily presented in the balance sheet 1. at current market values 2. in a separate section along with intangible assets 3. at cost less accumulated depreciation 4. at replacement costs Save Answer 13. (Points: 5) Expected useful life is 1. calculated when the asset is sold. 2. estimated at the time that the asset is placed in service. 3. determined each year that the depreciation calculation is made. 4. none of the answers are correct. Save Answer 14. (Points: 5) In a lease contract, the party who legally owns the asset is the 1. lessor 2. operator 3. lessee 4. banker Save Answer 15. (Points: 5) On December 31, Strike Company has decided to sell one of its batting cages. The initial cost of the equipment was $215,000 with an accumulated depreciation of $185,000. Depreciation has been taken up to the end of the year. The company found a company that is willing to buy the equipment for $30,000. What is the amount of the gain or loss on this transaction? 1. Loss of $30,000 2. No gain or loss 3. Cannot be determined 4. Gain of $30,000 Save Answer 16. (Points: 5) The formula for depreciable cost is 1. initial cost - residual value 2. depreciable cost = initial cost 3. initial cost + residual value 4. initial cost - accumulated depreciation Save Answer 17. (Points: 3) The double-declining-balance method is an accelerated depreciation method. 1. False 2. True Save Answer 18. (Points: 3) The acquisition costs of property, plant, and equipment should include all normal, reasonable and necessary costs to get the asset in place and ready for use. 1. True 2. False Save Answer 19. (Points: 3) When depreciation estimates are revised, all years of the asset?s life are affected. 1. True 2. False Save Answer 20. (Points: 3) When a major corporation develops its own trademark and over time it becomes very valuable, the trademark may not be shown on their balance sheet due lack of a material cost. 1. False 2. True Save Answer 21. (Points: 3) Revising depreciation estimates does affect the amounts of depreciation expense recorded in past periods. 1. False 2. True
