Since the SUTA rates changes are made at the end of each year and there is much discussion about changes to the FUTA rate, the available 2017 rates were used for FUTA and SUTA. Note: For this textbook edition the rate 0.6% was used for the FUTA tax rate for employers. Example 5-10 Applebaum Security Company is located in State H, which enables employers to reduce their contribution rates under the experience-rating system. From 2004 to 2013, inclusive, the company's total contributions to state unemployment compensation amounted to $18,135. For the calendar years 2014 to 2017, inclusive, the contribution rate for Applebaum was 3.7%. The contributions of each employer are credited to an account maintained by the State Unemployment Compensation Commission. This account is credited with contributions paid into the account by the employer and is charged with unemployment benefits that are paid from the account. Starting January 1, 2018, the contributions rate for all employers in State H will be based on the following tax-rate schedule:

The relationship between "strength" and "fineness" of cotton fibers was the subject of a study that produced the following data. (Give your answers correct to two decimal places.)

(a) Find the 98% confidence interval for the mean measurement of fineness for fibers with a strength of 76.

Upper Limit -

Lower Limit-

(b) Find the 99% prediction interval for an individual measurement of fineness for fibers with a strength of 76.

Upper Limit -

Lower Limit-

) A grocery store needs the refrigeration section to have its coolers stay at the same temperature on
a daily basis with little variance to help ensure quality. Daily temperatures are measured in degrees
Fahrenheit (◦F), and the manager of the store assumes that the variance in the daily temperatures is
3.8. The assistant manager claims that the variance is not 3.8 and decides to test his claim using an
hypothesis test. For a random sample of 31 days, he finds that the sample standard deviation in the
daily temperatures for one cooler is 2.9
◦F. At the 0.02 level of significance, does this evidence support
the claim that the variance in the daily temperatures is not 3.8?

Estimate the 2020 and 2025 population of the City of Fresno, Ca (any any city as a valid example) by plotting the historic data and extrapolating the trend.

“We really need to get this new material-handling equipment in operation just after the new year begins. I hope we can finance it largely with cash and marketable securities, but if necessary we can get a short-term loan down at MetroBank.” This statement by Beth Davies-Lowry, president of Intercoastal Electronics Company, concluded a meeting she had called with the firm’s top management. Intercoastal is a small, rapidly growing wholesaler of consumer electronic products. The firm’s main product lines are small kitchen appliances and power tools. Marcia Wilcox, Intercoastal’s General Manager of Marketing, has recently completed a sales forecast. She believes the company’s sales during the first quarter of 20x1 will increase by 10 percent each month over the previous month’s sales. Then Wilcox expects sales to remain constant for several months. Intercoastal’s projected balance sheet as of December 31, 20x0, is as follows:

Jack Hanson, the assistant controller, is now preparing a monthly budget for the first quarter of 20x1. In the process, the following information has been accumulated:

1. Projected sales for December of 20x0 are $600,000. Credit sales typically are 60 percent of total sales. Intercoastal’s credit experience indicates that 30 percent of the credit sales are collected during the month of sale, and the remainder are collected during the following month.
2. Intercoastal’s cost of goods sold generally runs at 70 percent of sales. Inventory is purchased on account, and 50 percent of each month’s purchases are paid during the month of purchase. The remainder is paid during the following month. In order to have adequate stocks of inventory on hand, the firm attempts to have inventory at the end of each month equal to half of the next month’s projected cost of goods sold.
3. Hanson has estimated that Intercoastal’s other monthly expenses will be as follows:

In addition, sales commissions run at the rate of 2 percent of sales.

4. Intercoastal’s president, Davies-Lowry, has indicated that the firm should invest $115,000 in an automated inventory-handling system to control the movement of inventory in the firm’s warehouse just after the new year begins. These equipment purchases will be financed primarily from the firm’s cash and marketable securities. However, Davies-Lowry believes that Intercoastal needs to keep a minimum cash balance of $25,000. If necessary, the remainder of the equipment purchases will be financed using short-term credit from a local bank. The minimum period for such a loan is three months. Hanson believes short-term interest rates will be 10 percent per year at the time of the equipment purchases. If a loan is necessary, Davies-Lowry has decided it should be paid off by the end of the first quarter if possible.
5. Intercoastal’s board of directors has indicated an intention to declare and pay dividends of $50,000 on the last day of each quarter.
6. The interest on any short-term borrowing will be paid when the loan is repaid. Interest on Intercoastal’s bonds is paid semiannually on January 31 and July 31 for the preceding six-month period.
7. Property taxes are paid semiannually on February 28 and August 31 for the preceding six-month period.

PLEASE PREPARE THE FOLLOWING:

1) Sales budget:

2) Cash receipts budget:

3) Purchases Budget

4) Cash disbursements budget:

5) Complete the first three lines of the summary cash budget. Then do the analysis of short-term financing needs in requirement (6). Then finish requirement (5).

6) Calculation of required short-term borrowing.

7) Prepare Intercoastal Electronics’ budgeted income statement for the first quarter of 20x1. (Ignore income taxes.)

8) Prepare Intercoastal Electronics’ budgeted statement of retained earnings for the first quarter of 20x1.

9) Prepare Intercoastal Electronics’ budgeted balance sheet as of March 31, 20x1. (Hint: On March 31, 20x1, Bond Interest Payable is $9,000 and Property Taxes Payable is $1,200.)

PLEASE HELP! THANK YOU!!

QUESTION ONE:

Absorption and Variable Costing: Prepare and Reconcile Variable costing Statements

Audiophonics Limited manufactures and sells high-quality and durable ear buds for use with personal electronics that are custom moulded to each customer’s ear. Cost data for the product follows:

Variable costs per unit:

            Direct materials                                            $12

            Direct labour                                                   24

            Variable factory overhead                              8

            Variable selling and administrative              6

Total variable costs per unit                                   $50

Fixed costs per month:

            Fixed manufacturing overhead                  $240,000

            Fixed selling and administrative                  180,000

Total fixed costs per month                                    $420,000

The product sells for $80 per unit. Production and sales data for May and June, the first two months of operations, are as follows:

Units Produced                  Units Sold

May                            15,000                        13,000

June                           15,000                        17,000

Income statements prepared by the Accounting Department using absorption costing are presented below:

May                June

Sales                                                                    $1,040,000         $1,360,000

Cost of goods sold:

            Beginning inventory                                                 0              120,000

            Add cost of goods manufactured              900,000             900,000

            Goods available for sale                             900,000          1,020,000

            Less ending inventory                                 120,000                          0

Cost of goods sold                                                   780,000          1,020,000

Gross margin                                                            260,000             340,000

Selling and administrative expenses                    258,000             282,000

Operating income                                                      $2,000             $58,000

REQUIRED:

1. Determine the unit cost under
   1. Absorption costing.
   2. Variable costing.

2. Prepare variable costing income statements for May and June using the contribution approach.

3. Reconcile the variable costing and absorption costing operating income figures.

4. The company’s Accounting Department has determined the break-even point to be 14,000 units per month, computed as follows:

Fixed cost per month           =          $420,000       = 14,000 units

Unit contribution margin                  $30 per unit

On receiving this figure, the president commented, “There’s something peculiar here. The comptroller says that the break-even point is 14,000 units per month. Yet we sold only 13,000 units in May, and the income statement we received showed a $2,000 profit. Which figure do we believe?” Prepare a brief explanation of what happened on the May income statement.

QUESTION ONE:

Absorption and Variable Costing: Prepare and Reconcile Variable costing Statements

Audiophonics Limited manufactures and sells high-quality and durable ear buds for use with personal electronics that are custom moulded to each customer’s ear. Cost data for the product follows:

Variable costs per unit:

           Direct materials                                       $12

           Direct labour                                            24

           Variable factory overhead                            8

           Variable selling and administrative               6

Total variable costs per unit                               $50

Fixed costs per month:

           Fixed manufacturing overhead                $240,000

           Fixed selling and administrative              180,000

Total fixed costs per month                                $420,000

The product sells for $80 per unit. Production and sales data for May and June, the first two months of operations, are as follows:

Units Produced                 Units Sold

May                         15,000                     13,000

June                        15,000                     17,000

Income statements prepared by the Accounting Department using absorption costing are presented below:

May        June

Sales                                                             $1,040,000   $1,360,000

Cost of goods sold:

           Beginning inventory                                           0              120,000

           Add cost of goods manufactured            900,000           900,000

           Goods available for sale                          900,000        1,020,000

           Less ending inventory                              120,000                        0

Cost of goods sold                                             780,000        1,020,000

Gross margin                                                      260,000             340,000

Selling and administrative expenses                  258,000            282,000

Operating income                                               $2,000           $58,000

REQUIRED:

1. Determine the unit cost under
   1. Absorption costing.
   2. Variable costing.

2. Prepare variable costing income statements for May and June using the contribution approach.

3. Reconcile the variable costing and absorption costing operating income figures.

4. The company’s Accounting Department has determined the break-even point to be 14,000 units per month, computed as follows:

Fixed cost per month         =           $420,000      = 14,000 units

Unit contribution margin                $30 per unit

On receiving this figure, the president commented, “There’s something peculiar here. The comptroller says that the break-even point is 14,000 units per month. Yet we sold only 13,000 units in May, and the income statement we received showed a $2,000 profit. Which figure do we believe?” Prepare a brief explanation of what happened on the May income statement.

What policies would encourage private sector R&D, and university and public R&D. Which of these policies have the highest public costs? Can you think of a way to focus any necessary public spending in a way that will get the most R&D bang for your buck?

Diminishing Returns. Spending money on advertising for a product can increase the amount of revenue generated by selling that product. Eventually, however, the amount by which revenue increases is offset by the cost of the advertising. The revenue generated (in thousands of dollars) by spending x thousands of dollars advertising a certain product is measured and found to be

R(x) = x3e−0.3x,where x is at most 10 (that is, $10,000).

6. If R′(x) is negative, it means that spending more money will actually reduce sales. IsR′(x) ever negative on the interval 0 ≤ x ≤ 10?

7. We would like to find the point at which R′(x) stops increasing. This is called the point of diminishing returns.

   (a) Calculate R′′(x).
   (b) On what intervals is R′(x) increasing and on what intervals is R′(x) decreasing?

   (c) What is the point of diminishing returns for this particular product?

1. A retail company has started a new advertising campaign in order to increase sales. In the past, the mean spending in both the 18–35 and 35+ age groups was at most $70.00.
   
   a. Formulate a hypothesis test to determine if the mean spending has statistically increased to more than $70.00.
   
   b. After the new advertising campaign was launched, a marketing study found that the sample mean spending for 400 respondents in the 18–35 age group was $73.65, with a sample standard deviation of $56.60. Is there sufficient evidence to conclude that the advertising strategy significantly increased sales in this age group with significance level of 5%?
   
   c. For 600 respondents in the 35+ age group, the sample mean and sample standard deviation were $73.42 and $45.44, respectively. Is there sufficient evidence to conclude that the advertising strategy significantly increased sales in this age group with significance level of 5%?