Adger Corporation is a service company that measures its output based on the number of customers served. The company provided the following fixed and variable cost estimates that it uses for budgeting purposes and the actual results for May as shown below:

When preparing its planning budget the company estimated that it would serve 35 customers per month; however, during May the company actually served 40 customers.

1. What amount of revenue would be included in Adger’s flexible budget for May?

2. What amount of employee salaries and wages would be included in Adger’s flexible budget for May?

3. What amount of travel expenses would be included in Adger’s flexible budget for May?

4. What amount of other expenses would be included in Adger’s flexible budget for May?

5. What net operating income would appear in Adger’s flexible budget for May?

6. What is Adger’s revenue variance for May? (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)

7. What is Adger’s employee salaries and wages spending variance for May? (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)

8. What is Adger’s travel expenses spending variance for May? (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)

14. What activity variance would Adger report in May with respect to its revenue? (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)

TAX ACTIVITY #1

ABX Company, a C Corporation, was formed in 2015 and reported net income in each year of its operation. The company had net capital gains and losses as follows:

TAX ACTIVITY #2

In 2019, Company B has taxable income of $50,000 prior to consideration of any net operating loss. In 2018, the Company incurred a net operating loss of $20,000. Determine 2019 taxable income.

In 2019, Company C has taxable income of $35,000 prior to consideration of any net operating loss. In 2018, the Company incurred a net operating loss of $30,000. Determine 2019 taxable income.

TAX ACTIVITY #3

Dividend of $10,000 from a 45% owned corporation; taxable income before DRD of $50,000. What is the amount excluded?

Dividend of $19,000 from a 15% owned corporation; taxable income before DRD of $75,000. What is the amount excluded?

Dividend of $8,000 from a 10% owned corporation; taxable income before DRD of $7,000. What is the amount excluded?

TAX ACTIVITY #4: Complete Form M-1

RNP, Inc. has book income of $120,000 properly determined in accordance with financial accounting principles. The following information is also available:

•    The company received a $10,000 dividend from a large publicly traded domestic corporation. (owns less than 20%)

•    Income tax expense on the financial statements was $30,000.

•    Depreciation expense on the financial statements is $25,000 less than depreciation expense determined using tax laws.

•    The company received life insurance proceeds of $15,000.

•Charitable contributions of $20,000 were made. (the allowable amount is $13,000.)

Determine the taxable income of RNP, INC.

Problem (simple linear regression). McDonald’s Corporation reported total revenues (X) and net profits (Y) from 1998 to 2005. Using 2-var statistics, we get: x-average=15.86; standard deviation of X =2.82; y-average=1.795, standard deviation of Y=0.5278; n=8 (from 1998 to 2005). Sum of squared X=2067.50, sum of squared Y=27.73, and sum of the product of X and Y =233.28. The least-square regression is Y (net profit) =0.2107+0.0999X (total revenue), with ESS=1.3965, and standard error of estimate (Sy,x)=0.4824. For one year with total revenue of 18.0, what is the 95% confidence interval for the net profit? (a) Compute the coefficient of determination, r-square , and interpret its meaning in the context of the problem. (b) Testing the hypothesis that the slope could be 0 at 0.10 level of significance. (c) Conduct the ANOVA F-test to the overall validity of the regression analysis. Use 0.10 level of significance.

Problem (simple linear regression). McDonald’s Corporation reported total revenues (X) and net profits (Y) from 1998 to 2005.  Using 2-var statistics, we get:

x-average=15.86;  standard deviation of X =2.82;  y-average=1.795, standard deviation of Y=0.5278; n=8 (from 1998 to 2005).  Sum of squared X=2067.50, sum of squared Y=27.73, and sum of the product of X and Y =233.28.

The least-square regression is

Y (net profit) =0.2107+0.0999X (total revenue), with ESS=1.3965, and standard error of estimate (S_y,x)=0.4824.

1. For one year with total revenue of 18.0, what is the 95% confidence interval for the net profit?
2. Compute the coefficient of determination, r-square      , and interpret its meaning in the context of the problem.
3. Testing the hypothesis that the slope could be 0 at 0.10 level of significance.
4. Conduct the ANOVA F-test to the overall validity of the regression analysis. Use 0.10 level of significance.   

Question:

Riverroad Chicken Company , a company selling roasted chicken and other accompaniments in outlets throughout the country , went public last year , 2011.In 2010 , it had revenues of Sh.40 million,on which reported earnings before interest and taxes of Sh.12 million.At that time, prior to going public, the firm had no debt outstanding, and expected revenues are to grow at 35% a year from 2011 to 2015, 15% a year from 2015 to 2017 and 5% a year after that.The pre-tax operating margins (EBIT/Revenues) were expected to remain stable.

Capital expenditure which exceeded depreciation by Sh.5 million in the year prior to going public were expected to grow 20% a year from 2011 to 2015, as is depreciation .After 2016, capital expenditure are expected to offsetdepreciation.Working Capital are negligible.

The average beta of publicly traded fast food chains with which Riverroad Chicken will be competing is 1.15 and their average debt-equity ratio is 25%.The company in question plans to move to the industry average debt ration after that (2015).The pretax cost of debt is expected to be 8% .The treasury bond rate is 7% .Assume a 40% tax regime, and an average stock in the market earn a return of 12.50%

Required>

Estimate the cost of equity for the company,Riverroad Chicken Ltd and the Value of its equity.

Cincinnati Paint Company sells quality brands of paints through hardware stores throughout the United States. The company maintains a large sales force who call on existing customers and look for new business. The national sales manager is investigating the relationship between the number of sales calls made and the miles driven by the sales representative. Also, do the sales representatives who drive the most miles and make the most calls necessarily earn the most in sales commissions? To investigate, the vice president of sales selected a sample of 25 sales representatives and determined:

• The amount earned in commissions last month (y)
• The number of miles driven last month (x₁)
• The number of sales calls made last month (x₂)

The information is reported below.

  Click here for the Excel Data File

Develop a regression equation including an interaction term. (Negative amount should be indicated by a minus sign. Round your answers to 3 decimal places.)

Complete the following table. (Negative amounts should be indicated by a minus sign. Round your answers to 3 decimal places.)

Compute the value of the test statistic corresponding to the interaction term. (Negative amount should be indicated by a minus sign. Round your answer to 2 decimal places.)

At the 0.05 significance level is there a significant interaction between the number of sales calls and the miles driven?

This is (not statistically significant, statistically significant) so we conclude that there (is no interaction, is interaction)

Red Canyon T-shirt Company operates a chain of T-shirt shops in the southwestern United States. The sales manager has provided a sales forecast for the coming year, along with the following information:

Each T-shirt is expected to sell for $17.

The purchasing manager buys the T-shirts for $7 each.

The company needs to have enough T-shirts on hand at the end of each quarter to fill 27 percent of the next quarter’s sales demand.

Selling and administrative expenses are budgeted at $84,000 per quarter plus 14 percent of total sales revenue.

Required:
1. Determine budgeted sales revenue for each quarter.



2. Determine budgeted cost of merchandise purchased for each quarter.



3. Determine budgeted cost of good sold for each quarter.



4. Determine selling and administrative expenses for each quarter.



5. Complete the budgeted income statement for each quarter.

Red Canyon T-shirt Company operates a chain of T-shirt shops in the southwestern United States. The sales manager has provided a sales forecast for the coming year, along with the following information:

• Each T-shirt is expected to sell for $17.
• The purchasing manager buys the T-shirts for $7 each.
• The company needs to have enough T-shirts on hand at the end of each quarter to fill 27 percent of the next quarter’s sales demand.
• Selling and administrative expenses are budgeted at $84,000 per quarter plus 14 percent of total sales revenue.

Required:
1.Determine budgeted sales revenue for each quarter.



2. Determine budgeted cost of merchandise purchased for each quarter.



3. Determine budgeted cost of good sold for each quarter.



4. Determine selling and administrative expenses for each quarter.



5. Complete the budgeted income statement for each quarter.

-Determine the Finished Goods for January and provide the number of the Jobs in Finished Goods at the end of January and determine the total cost of ending finished goods for January.

-Determine the Cost of Goods Sold for January and provide the number of the Jobs in Cost of Goods Sold for January and determine the total cost of goods sold for January.

-Determine the ending Work-In-Process Inventory at the end of January and provide the number of the Jobs still in Work-in-Process at the end of January and the determined total cost of ending work in process for January.

For the past 104 ​years, a certain state suffered 27 direct hits from major​ (category 3 to​ 5) hurricanes. Assume that this was typical and the number of hits per year follows a Poisson distribution. Complete parts​ (a) through​ (d). a) What is the probability that the state will not be hit by any major hurricanes in a single​ year? The probability is nothing.​ (Round to four decimal places as​ needed.) ​(b) What is the probability that the state will be hit by at least one major hurricane in a single​ year? The probability is nothing. ​(Round to four decimal places as​ needed.) Is this​ unusual? Yes No ​(c) What is the probability that the state will be hit by at least three major hurricanes in a single​ year, as happened last​ year? The probability is nothing. ​(Round to four decimal places as​ needed.) Does this indicate that the 2004 hurricane season in this state was​ unusual?