Question 1
Continuing Cookie Chronicle (Note: This is a continuation of the Cookie Chronicle from Chapters 1 through 4.) CCC5 Because Natalie has had such a successful first few months, she is considering other opportunities to develop her business. One opportunity is to become the exclusive distributor of a line of fine European mixers. The current cost of a mixer is approximately $575, and Natalie would sell each one for $1,150. Natalie comes to you for advice on how to account for these mixers. Each appliance has a serial number and can be easily identified. Natalie asks you the following questions. 1. ?Would you consider these mixers to be inventory? Or, should they be classified as supplies or equipment?? 2. ?I?ve learned a little about keeping track of inventory using both the perpetual and the periodic systems of accounting for inventory. Which system do you think is better? Which one would you recommend for the type of inventory that I want to sell?? 3. ?How often do I need to count inventory if I maintain it using the perpetual system? Do I need to count inventory at all?? In the end, Natalie decides to use the perpetual method of accounting for inventory, and the following transactions happen during the month of January. Jan. 4 She buys five deluxe mixers on account from Kzinski Supply Co. for $2,875, terms n/30. 6 She pays $100 freight on the January 4 purchase. 7 Natalie returns one of the mixers to Kzinski because it was damaged during shipping. Kzinski issues Cookie Creations credit for the cost of the mixer plus $20 for the cost of freight that was paid on January 6 for one mixer. 8 She collects the amount due from the neighborhood community center that was accrued at the end of December 2009. 12 She sells three deluxe mixers on account for $3,450, FOB destination, terms n/30. The mixers cost $595 each (including freight). 13 Natalie pays her cell phone bill previously accrued in the December adjusting journal entries. 14 She pays $75 of delivery charges for the three mixers that were sold on January 12. 14 She buys four deluxe mixers on account from Kzinski Supply Co. for $2,300, terms n/30. 17 Natalie is concerned that there is not enough cash available to pay for all of the mixers purchased. She issues additional common stock for $1,000. 18 She pays $80 freight on the January 14 purchase. 20 She sells two deluxe mixers for $2,300 cash. 28 Natalie issues a check to her assistant. Her assistant worked 20 hours in January and is also paid for amounts owing at December 31, 2009. Recall that Natalie?s assistant earns $8 an hour. 28 Natalie collects amounts due from customers in the January 12 transaction. 31 She pays Kzinski all amounts due. 31 Cash dividends of $750 are paid. As of January 31, the following adjusting entry data are available. 1. A count of brochures and posters reveals that none were used in January. 2. A count of baking supplies reveals that none were used in January. 3. Another month?s worth of depreciation needs to be recorded on the baking equipment bought in November. (Recall that the baking equipment has a useful life of 5 years or 60 months.) 4. One month?s worth of amortization (write-off) needs to be recorded on the website. (Recall that the website has a useful life of 2 years or 24 months.) 5. An additional month?s worth of interest on her grandmother?s loan needs to be accrued. (The interest rate is 9%.) 6. One month?s worth of insurance has expired. 7. Natalie receives her cell phone bill, $75. The bill is for services provided in January and is due February 15. (Recall that the cell phone is used only for business purposes.) 8. An analysis of the unearned revenue account reveals that Natalie has not had time to teach any of these lessons this month because she has been so busy selling mixers. As a result there is no change to the unearned revenue account. Natalie hopes to book the outstanding lessons in February. 9. An inventory count of mixers at the end of January reveals that Natalie has three mixers remaining. Instructions Using the information that you have gathered and the general ledger accounts that you have prepared through Chapter 4, plus the new information above, do the following. (a) Answer Natalie?s questions. (b) Prepare and post the January 2010 transactions. (c) Prepare a trial balance. (d) Prepare and post the adjusting journal entries required. (e) Prepare an adjusted trial balance. (f) Prepare a multiple-step income statement and retained earnings statement for the month ended January 31, 2010. (g) Prepare a classified balance sheet as of January 31, 2010. 2 chapter 5 Merchandising Operations and the Multiple-Step Income Statement (c) Totals $12,684 (f) Net income $ 2,305 (g) Total assets $ 8,539
Question 2
Petco.com: Turning Negative Reviews into Positive Sales On Petco.com you can buy a soft-sided travel carrier for your cat for only $19.99. You might think twice, though, after seeing that customers gave it only two ?paws? out of five overall for pet satisfaction, appearance, and quality. The reviews reveal more serious reasons to hesitate before adding the product to your cart. A customer with the screen name ?Disgruntled Bunny? reports: ?The mesh on the sides was such poor quality that my cat was able to rip it to shreds and escape in a matter of seconds!? Another customer recommends buying a carrier with stronger sides, adding, ?It costs more but is safer for your pet, so it?s worth it.? Products have long been rated on sites like Amazon.com and those that exist entirely for customer reviews, but Petco was one of the first mainstream retailers to create a forum on its own Web site for criticism. The risk was obvious: Customers could pan products and send buyers running. But Petco reports that business is booming, even with bad reviews like Disgruntled Bunny?s. New research is proving what Petco already learned: Peer reviews work. Shoppers are turning to everyday people for product advice. The 2007 Edelman Trust Barometer reports that over half of Americans said they trust ?a person like me? for information about a company or product. David Brain, CEO of Edelman, urges companies to stop relying on ?top-down communications delivered to an elite audience and move to peer-to-peer dialogue.? Making customer reviews public has an immediate impact on sales and brand loyalty. Data from ForeSee Results in 2007 revealed that 40 percent of online shoppers said peer ratings on Web sites influenced their purchasing decisions. Furthermore, this group was 21 percent more satisfied with its purchases than other buyers and was 18 percent more likely to buy from the same site again. According to Petco executive John Lazarchic, most users who search for products by customer ratings shop longer, buy more, and return less: ?The savings in returns alone pays for all the technology involved in the review and ratings feature.? And if one product gets too many bad reviews, it usually prompts customers to buy higher-rated, more expensive merchandise instead. Other advantages? Reviews build camaraderie with an online community where shoppers can connect. They can boost a site?s ratings on search sites. And they establish credibility. As long as the reviews aren?t overwhelmingly negative, positive reviews have been shown to outweigh the negatives in shoppers? minds. For example, a four-paw review on Petco.com would outnumber one-paw ratings by seven to one. Lazarchic insists that reviews provide valuable feedback. Critical comments are shared within the company and can instigate changes. In fact, they?re finding that the risk is not in receiving too many negative comments on a product, but too few. When no one is responding, it looks like no one is buying it. Or, if they are, they don?t care enough about it to talk about it. Petco had that problem at first. In the beginning, when the company posted a small link for users to click and write a review, the silence was deafening. So they added promotional banners to the site and advertised drawings in which lucky reviewers would receive cash prizes. Within a couple of weeks, they?d gotten 4,500 new comments. Analysts warn that to maintain credibility, reviews shouldn?t be edited unless necessary. Petco removes the names of rival brands, URLs, and personal information, but less than 10 percent of the reviews they receive are deleted. Now they?re experimenting with the idea of using customer comments as marketing tools in print catalogs, offline ads, e-mail messages, and point-of-purchase displays. In print circulars, for example, Petco highlights its five-paw rated products. Many of their customers? e-mail addresses are collected through a loyalty program in Petco stores, which means those shoppers may not have visited the Web site. By including customer comments in e-mail ads, it expands the reach of the review program and boosts sales of products those shoppers may not have considered in the store. According to a Nielsen BuzzMetrics study, the customers most likely to write reviews on Web sites are empty nesters and ?young transitionals? without children. Petco found that on their site, reviewers tend to be women with higher levels of education and income who are passionate about their pets. It is generally someone who wants to be helpful, share her opinion, and feel important. Someone, perhaps, like Disgruntled Bunny, who wants to warn others of the dangers of defective travel carriers before another cat escapes. 1. A customer-centric company builds long-lasting relationships by focusing on what satisfies and retains valuable customers. Discuss how Petco follows this customer-centric philosophy. 2. Go to Petco.com and read some of the customer reviews for various types of products. Do the one- and two-paw ratings tend to outnumber those with four and five paws, or the other way around? Can you find a customer review that Petco could use to market a product in a company circular or e-mail ad? 3. Now that Petco has identified the type of customer most likely to write reviews of their products, discuss the kinds of promotions that might encourage continued loyalty and response online from them in the future. What could they do to appeal to these customers? 4. Many mainstream retailers are still hesitant to post customer reviews on their Web sites. If you were consulting with one of these companies, what arguments would you use to convince management to try them? Answer must be in APA format with no certain length, just answer the questions.,Word count and page does not matter only the quality of the answer to the questions kept in APA format. Thank you
Question 3
Hello, I am having a very hard time with this question below. Can anyone help me get this started or tell me the steps I should take to calculate the answers required. Very lost with this one. I would really appreciate the help! A dealer in government securities is considering buying $875 million in 10-year Treasury notes and $1,425 million dollars in 6-month Treasury bills. Current yields on the T-notes average 7.15 percent, while 6-month T-bill yields average 3.28 percent. The dealer can currently borrow $2,300 million through one-week repurchase agreements at an interest rate of 3.20 percent. Compute the dealer?s expected carry income in each of the following scenarios. (Hint: A spreadsheet can be most useful here. Perform the succession of calculations for the T-note in row 1; the succession of calculations for the T-bill in row 2; and the expenses from the RP in the row 3. Then, compute the carry income from the appropriate columns where income and expenses have been computed for each scenario.) a. The dealer purchases the T-notes and T-bills and finances them with the RP under the terms listed above. b. Same as part (a) above except that interest rates change to 7.30 percent on the T-notes, 5.40 percent on the T-bills and 5.55 percent on the RP, and the dealer must refinance the T-note and T-bill purchases at the new RP rate. c. Same as part (b) above except the dealer had not purchased the T-notes and T-bills until after interest rates changed. d. Repeat part (b) in the case where rates changed to 7 percent on the T-notes, 5.10 percent on the T-bills, and 4.5 percent on the RP. e. Repeat part (b) except the dealer had not purchased the T-notes and T-bills until after the interest rates changed. f. Based on the above results, is it always good for the dealer when interest rates rise? How about when they fall? Please explain. g. Could the dealer have benefited by a short position in case (b) or (d) above? Please explain.
Question 4
1. Cost allocation methods that provide the most accurate full cost for financial reporting also provide the most accurate information for making decisions within the company. (Points: 2) True False 2. From a decision-making standpoint, the allocated cost should measure the sunk cost of using a company resource (Points: 2) True False 3. Allocating actual service department costs allows the service departments to pass on the costs of inefficiencies to the production departments. (Points: 2) True False 4. Managers should not be held responsible for controllable costs. (Points: 2) True False 5. Full cost information (Points: 2) is required by GAAP for external reporting purposes. does not require allocation of indirect costs. provides managers with the most accurate information for making decisions. treats all costs as fixed costs. 6. An allocation of a predetermined amount that is not affected by changes in the activity level of the organizational unit receiving the allocation is called a(n) (Points: 2) allocation base. unitized cost. lump-sum allocation. cost driver. 7. Which of the following is likely to occur when more overhead cost pools are used? (Points: 2) Product costs will be more accurate. Recordkeeping will be more expensive. Decisions such as product pricing will be improved. All of the above are true. 8. Which of the following is not an advantage of activity-based costing (ABC) over traditional volume based costing systems? (Points: 2) ABC may lead to improvement in cost control as managers are charged for using activities ABC is less likely than a traditional system to undercost complex products. ABC is less costly to implement than traditional systems. All of the above are advantages of ABC. 9. Jarme Company makes two products and is implementing an activity-based costing (ABC) system. Previously, all overhead had been applied on the basis of machine hours. The company produces 100,000 units of product D and 5,000 units of product F annually. What is the overhead cost per unit for Product D using ABC? (Points: 2) $63.50 $430 $68 $340 10. Magazine Company uses activity-based costing. The company produces weekly and monthly magazines. The estimated costs and expected activity for each of the activity pools follow: How much is the activity rate for activity 1? (Points: 2) $19.00 $13.06 $18.10 $14.25
Question 5
A manufacturing company is thinking of launching a new product. The company expects to sell $950,000 of the new product in the first year and $1,500,000 each year thereafter. Direct costs including labor and materials will be 45% of sales. Indirect incremental costs are estimated at $95,000 a year. The project requires a new plant that will cost a total of $1,500,000, which will be a depreciated straight line over the next 5 years. The new line will also require an additional net investment in inventory and receivables in the amount of $200,000. Assume there is no need for additional investment in building the land for the project. The firm's marginal tax rate is 35%, and its cost of capital is 10%. To receive full credit on this assignment, please show all work, including formulae and calculations used to arrive at financial values. Assignment Guidelines: Using the information in the assignment description: Prepare a statement showing the incremental cash flows for this project over an 8-year period. Calculate the payback period (P/B) and the net present value (NPV) for the project. Answer the following questions based on your P/B and NPV calculations: Do you think the project should be accepted? Why? Assume the company has a P/B (payback) policy of not accepting projects with life of over 3 years. If the project required additional investment in land and building, how would this affect your decision? Explain.
