Rundle Condos Corporation is a small company owned by Dennis Hatch. It leases three condos of differing sizes to customers as vacation facilities. Labor costs for each condo consist of maid service and maintenance cost. Other direct operating costs consist of interest and depreciation. The direct operating costs for each condo follow.

Indirect operating expenses, which amounted to $46,590, are allocated to the condos in proportion to the amount of other direct operating costs incurred for each.

Required

1. Assuming that the amount of rent revenue from Condo 2 is $105,000, what amount of income did it earn? (Do not round intermediate calculations.

Jordan is a construction contract company involved in building commercial properties. Its current policy for determining the percentage of completion of its contracts is based on the proportion of cost incurred to date compared to the total expected cost of the contract.
One of Jordan’s contracts has an agreed price of $250 million and estimated total costs of $200 million.

The cumulative progress of this contract is:
Year ended: 30 September 2011 30 September 2012
$million $million
Costs incurred 80 145
Work certified and billed 75 160
Billings received 70 150

Based on the above, Jordan prepared and published its financial statements for the year ended 30 September 2011. Relevant extracts are:

Statement of Profit and Loss
$million
Revenue (balance) 100
Cost of sales (80)
––––
Profit (50 x 80/200) 20
––––
Statement of financial position
$million
Current assets
Amounts due from customers
Contract costs to date 80
Profit recognised 20
––––
100
Progress billings (75)
––––
25
––––
Contract receivables (75 – 70) 5

Jordan has received some adverse publicity in the financial press for taking its profit too early in the contract process, leading to disappointing profits in the later stages of contracts. Most of Jordan’s competitors take profit based on the percentage of completion as determined by the work certified compared to the contract price.
Required:
(i)   Assuming Jordan changes its method of determining the percentage of completion of contracts to that used by its competitors, and that this would represent a change in an accounting estimate, calculate equivalent extracts to the above for the year ended 30 September 2012 (5marks)

(ii)   Explain the Criteria for Recognising Revenue from contract with customers. .

(iii)   Explain the difference between Revenue Recognition from construction contracts when The contract is profit making and when losses are probable.

Zagat’s publishes restaurant ratings for various locations in the United States. The file Restaurants contains the Zagat rating for food, décor, service, and the cost per person for a sample of 100 restaurants located in New York City and in a suburb of New York City. Develop a regression model to predict the cost per person, based on a variable that represents the sum of the ratings for food, décor, and service.

a. Construct a scatter plot.

b. Assuming a linear relationship, use the least-squares method to compute the regression coefficients b0 and b1.

c. Interpret the meaning of the Y-intercept, b0, and the slope, b1, in this problem.

d. Predict the mean cost per person for a restaurant with a summated rating of 50.

e. What should you tell the owner of a group of restaurants in this geographical area about the relationship between the summated rating and the cost of a meal?

At a student café, there are equal numbers of two types of customers with the following values. The café owner cannot distinguish between the two types of students because many students without early classes arrive early anyway (i.e., she cannot price-discriminate).

The marginal cost of coffee is 5 and the marginal cost of a banana is 20.

The café owner is considering three pricing strategies:

Assume that if the price of an item or bundle is no more than exactly equal to a student's willingness to pay, then the student will purchase the item or bundle.

For simplicity, assume there is just one student with an early class, and one student without an early class.

Pricing strategy   yields the highest profit for the café owner

At a student café, there are equal numbers of two types of customers with the following values. The café owner cannot distinguish between the two types of students because many students without early classes arrive early anyway (i.e., she cannot price-discriminate).

The marginal cost of coffee is 10 and the marginal cost of a banana is 40.

The café owner is considering three pricing strategies:

Assume that if the price of an item or bundle is no more than exactly equal to a student's willingness to pay, then the student will purchase the item or bundle.

For simplicity, assume there is just one student with an early class, and one student without an early class.

Pricing strategy ?  yields the highest profit for the café owner.

QUESTION 27

1. In a normal distribution of scores with a mean of 35 and a standard deviation of 4, which event is more likely; a) a randomly selected score is between 29 and 31 or b) a randomly selected score is between 40 and 42? Explain your response in 2-3 sentences.

You may need to use the appropriate technology to answer this question. The International League of Triple-A minor league baseball consists of 14 teams organized into three divisions: North, South, and West. Suppose the following data show the average attendance for the 14 teams in the International League. Also shown are the teams' records; W denotes the number of games won, L denotes the number of games lost, and PCT is the proportion of games played that were won. Team Name Division W L PCT Attendance Buffalo Bisons North 66 77 0.462 8,818 Lehigh Valley IronPigs North 55 89 0.382 8,471 Pawtucket Red Sox North 85 58 0.594 9,095 Rochester Red Wings North 74 70 0.514 6,918 Scranton-Wilkes Barre Yankees North 88 56 0.611 7,144 Syracuse Chiefs North 69 73 0.486 5,764 Charlotte Knights South 63 78 0.447 4,522 Durham Bulls South 74 70 0.514 6,997 Norfolk Tides South 64 78 0.451 6,283 Richmond Braves South 63 78 0.447 4,459 Columbus Clippers West 69 73 0.486 7,791 Indianapolis Indians West 68 76 0.472 8,531 Louisville Bats West 88 56 0.611 9,156 Toledo Mud Hens West 75 69 0.521 8,235 (a) Use α = 0.05 to test for any difference in the mean attendance for the three divisions. State the null and alternative hypotheses. H0: Not all the population means are equal. Ha: μN = μS = μW H0: At least two of the population means are equal. Ha: At least two of the population means are different. H0: μN ≠ μS ≠ μW Ha: μN = μS = μW H0: μN = μS = μW Ha: μN ≠ μS ≠ μW H0: μN = μS = μW Ha: Not all the population means are equal. Correct: Your answer is correct. Find the value of the test statistic. (Round your answer to two decimal places.) 6.95 Correct: Your answer is correct. Find the p-value. (Round your answer to three decimal places.) p-value = .0111 Correct: Your answer is correct. State your conclusion. Do not reject H0. There is sufficient evidence to conclude that the mean attendance values are not equal for the three divisions. Do not reject H0. There is not sufficient evidence to conclude that the mean attendance values are not equal for the three divisions. Reject H0. There is sufficient evidence to conclude that the mean attendance values are not equal for the three divisions. Reject H0. There is not sufficient evidence to conclude that the mean attendance values are not equal for the three divisions. Correct: Your answer is correct. (b) Use Fisher's LSD procedure to determine where the differences occur. Use α = 0.05. Find the value of LSD for each pair of divisions. (Round your answers to two decimal places.) North and South LSD = Incorrect: Your answer is incorrect. North and West LSD = South and West LSD = Find the pairwise absolute difference between sample attendance means for each pair of divisions. (Round your answers to the nearest integer.) xN − xS = 2136 Correct: Your answer is correct. xN − xW = 727 Correct: Your answer is correct. xS − xW = 2863 Correct: Your answer is correct. Which attendance means differ significantly? (Select all that apply.) There is a significant difference in mean attendance between the North division and the South division. There is a significant difference in mean attendance between the North division and the West division. There is a significant difference in mean attendance between the South division and the West division. There are no significant differences. Correct: Your answer is correct.

The firm, competing in a very highly competitive market, is manufacturing and selling headphones. The firm’s total revenue and cost functions are:

Rq=q3+14q2+35q+40

Cq=13q3+20q2+19q+15

1. How many headphones must the firm manufacture and sell to maximize profits?
2. What will be the price the firm must charge to its customers to maximize profits?
3. What will be the average revenue generated for each unit sold and what will be the average cost of producing a headphone?

Valuing a Stock with Three-Stage Dividend Discount Model Mocha-Cola In the morning of Tuesday, January 3rd 2004, Robert Smart, a security analyst at Armani Investment was reviewing the 2003 financial statements of Mocha-Cola as requested by one of their most important clients, Mr. Jin Qian. Mr. Jin Qian has accumulated a significant amount of wealth through Armani’s recommendations in the past and now he was interested in investing a sizeable amount of his wealth into Mocha-Cola stocks. Mocha-Cola, the world famous soft drink company, was able to increase its market value consistently over the last several decades. While Mocha-Cola’s growth in the domestic soft drink market has leveled off in the past few years due to aggressive marketing campaigns of its competitors (especially by TipsyCola), the analysts expect that the firm will continue to expand thanks to the introduction of new products and increased demand for Mocha-Cola products by international markets. The initial analyses carried by Robert Smart revealed that Mocha-Cola reported earnings per share of $3.00 in 2003, and paid dividends per share of $0.75. Mr. Smart asked his assistant, Paul Brook, to gather further information on Mocha-Cola as reported by other analysts. Paul’s summary of analyst reports indicated that Mocha-Cola’s earnings would grow at their extraordinary level of 20% at least for the next five years (from 2004 to 2008). While Mr. Smart concurs with this expectation, he thinks that it should decline linearly each year after the high growth period to a stable growth rate of 5% in 2013 due to severe competition in the soft-drink industry. Paul Brook also noted that according to analysts’ reports payout ratio was expected to remain unchanged from 2004 to 2008, after which it would increase each year equally to reach its steady state value of 80% in 2013. By the end of the day, Mr. Smart was already tired and overwhelmed with the amount of information accumulated. He asked Paul to calculate the stock price of MochaCola by using three-stage dividend discount model and assuming a 15% required rate of return. The results were expected to be ready for presentation by 10:00 a.m. on Wednesday. While Paul was very proficient in terms of putting necessary inputs together as he did in this task, he had never actually run the three-stage dividend discount model on his own. He took another sip from his coffee and got ready to prepare a full, fresh pot that he was going to need for the rest of the night.

Please show excel formulas !

37. Mavis Corporation has an agreement with its workers to index completely the wage of its employees to the CPI. Mavis currently pays its production line workers $7.50 an hour and is scheduled to index their wages today. If the CPI is currently about 130 and was 120 a year ago, Mavis should increase the hourly wages of its workers by about...

38. Thomas earned a salary of $50,000 in 2001 and $70,000 in 2006. The consumer price index was 177 for 2001 and 265.5 for 2006. Thomas’s 2001 salary in 2006 dollars is...

39. Suppose the CPI was 95 in 1955, and suppose currently the CPI is 475. According to the CPI, $100 today purchases the same amount of goods and services as...

40. Suppose that twenty-five years ago a country had nominal GDP of $1,000, a GDP deflator of 200, and a population of 100. Today it has nominal GDP of $3,000, a GDP deflator of 400, and population of 150. What happened to the real GDP per person?

41. Assume the consumer price index was 225 in 2006 and 234 in 2007. The nominal interest rate during this period was 6.5 percent. What was the real interest rate during this period?

Please show work. Thank you