Exercise 6-16

Kaleta Company reports the following for the month of June.

Assume a sale of 788 units occured on June 15 for selling of price $9 and a sale of 644 units on June 27 for $10.

Calculate cost of goods available for sale

Calculate Moving-Average unit cost for June 1, 12,15, 23 &27 (Round answers to 3 decimal places, e.g. 2.525.)

Calulate the cost of the ending inventory and the cost of goods sold for each cost flow assumption, using a perpetual inventory system. Assume a sale of 788 units occured on June 15 for a selling price of $9 and a sale of 644 units on June 27 for $10. (Round answers to 0 decimal places, e.g. 1,250)

Using the data provided:

1. Plot the data. What does the plot tell you about the appropriateness of using a trend and seasonally adjusted model for your data?
2. Develop a forecast model that incorporates both a trend and seasonal adjustment (even if its not necessarily there).
3. Develop a forecast for the four periods beyond your data.
4. Calculate a MAD and Bias based on the last 12 periods of known data. What do the MAD and bias indicate about your model?
5. Overall, are you satisfied with your model? If so, why? If not, suggest some things that could be done to improve your model.

data:

You manage a cable company that offers 2 channels - NBC and Fox. You face 2 types of customers (type A and type B) and there are 100 customers of each type. Their respective values for each channel are: Type A Type B NBC $10 $15 Fox $3 $7 If the marginal cost of selling each channel is $1 per channel, what is the most profitable strategy? sell the channels separately bundle the channels indifferent between selling separately and bundling the channels  

Consider three servers. An average of 12 customers per hour arrive from outside at server 1, an average of 36 customers per hour arrive from outside at server 2 and an average of 24 customers per hour arrive from outside at server 3. Interarrival times are exponential. Servers 1, 2 and 3 can serve at exponential rates of 100, 120 and 80 customers per hour respectively. After completing service at server 1, 25% of the customers leave the system and 75% of the customers go to server 2. After completing service at server 2, 50% of the customers go to server 3 and 50% of the customers go to server 1. After completing service at server 3, 25% of the customers go to server 2 and 75% of the customers leave the system.

(a) Find the arrival rates: λ1, λ2 and λ3 of the customers at the servers 1,2 and 3 respectively.

(b) Find the expected number of customers at each server. (c) Find the average time a customer spends in the system.

1. CC Car Wash specializes in car cleaning services. The services offered by the company, the exact service time, and the resources needed for each of them are described in the table following:

   Service	Description	Processing Time	Resource
   A. Wash	Exterior car washing and drying	10 minutes	1 automated washing machine
   B. Wax	Exterior car waxing	15 minutes	1 automated waxing machine
   C. Wheel Cleaning	Detailed cleaning of all wheels	16 minutes	1 employee
   D. Interior Cleaning	Detailed cleaning inside the car	20 minutes	1 employee

   The company offers the following packages to their customers:

   • Package 1: Includes only car wash (service A).

   • Package 2: Includes car wash and waxing (services A and B).

   • Package 3: Car wash, waxing, and wheel cleaning (services A, B, and C).

   • Package 4: All four services (A, B, C, and D).

   Customers of CC Car Wash visit the station at a constant rate (you can ignore any effects of variability) of 50 customers per day. Of these customers, 30 percent buy Package 1, 30 percent buy Package 2, 15 percent buy Package 3, and 25 percent buy Package 4. The mix does not change over the course of the day. The store operates 10 hours a day.

   ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

   For the next summer, CC Car Wash anticipates an increase in the demand to 80 customers per day. Together with this demand increase, there is expected to be a change in the mix of packages demanded: 40 percent of the customers ask for Package 1, 30 percent for Package 2, 20 percent for Package 3, and 10 percent for Package 4. The company will install an additional washing machine to do service A. Answer the following questions based on this new situation.

   e. What is the implied utilization rate for the washing machines? Round your answer to the nearest whole number and ignore the percentage sign. For example, if your answer is 0.45 or 45%, fill in 45; if your answer is 0.76 or 76%, fill in 76.

   Your answer is .

   Ovservation   Portland   Houston   Jacksonville  
   1 85 71 64  
   2 75 75 69  
   3 82 73 67  
   4 76 74 74  
   5 71 69 80  

6 85 82 72

National Bearings manufactures bearings at plants located in Portland Oregon, Houston Texas, and Jacksonville Florida. To measure employee knowledge of Total Quality Management (TQM), six employees were randomly selected at each plant and tested. The test scores for these employees are given in DATA. Managers want to know if, on average, knowledge of TQM is equal across the 3 plants. Test equality of mean scores at Alpha = 0.05 .

What is the F value? p value? F critical value?

Do we reject equality mean or not? Is knowledge of TQM equal across all 3 plants or not?

Question 1

Always Fit Company is engaged in providing group fitness classes in a studio. Customers are required to purchase group classes coupons in advance. Coupons are redeemed when customers attend fitness classes. Adjusting entries are performed on a monthly basis. Closing entries are performed annually on December 31. Below is the Company’s unadjusted trial balance at the year ended December 31, 2018.


Always Fit Company Unadjusted Trial Balance December 31, 2018 Account Title Debit $ Credit $ Cash 114,400 Accounts receivable 220,100 Unexpired insurance 36,000 Supplies 6,500 Equipment 120,000 Accumulated depreciation: Equipment 21,200 Accounts payable 24,000 Income taxes payable 9,100 Unearned revenue 21,000 8% Notes payable 42,000 Share capital (100,000 shares) 200,000 Retained earnings 77,000 Services revenue 304,000 Wages expense 50,000 Rent expense 91,000 Insurance expense 12,000 Depreciation expense 18,000 Supplies expense 3,000 Income taxes expense 27,300 $698,300 $698,300
  

Information on adjusting entries:

(1) The estimated useful life of equipment is five years and straight-line depreciation method is adopted. Depreciation expense had been updated to end of September 2018.

(2) Accrued, but unrecorded and unpaid wages amounted to $7,000.

(3) On November 1, 2018, the company borrowed $42,000 from its owner by signing 9-month note at 8% interest rate per annum. The monthly interests were paid by the company at the end of the next months. No entries had been made after recording the note.

(4) Physical count shows supplies on hand were $6,000 on December 31, 2018.

(5) On August 1, 2018, the company prepaid a 12-month insurance policy, which was effective on September 1, 2018.

(6) On December 31, 2018, the Company declared a cash dividend of $0.10 per share to be paid in the following year.

(7) Group class coupons amounting $8,000 were redeemed in December, 2018.

(8) The Company estimated that the income taxes expense for the entire year was $30,300, which to be paid next year.

(9) Unrecorded and unpaid fuel expenses of the owner’s private vehicle amounted to $2,000.


Required:

(a) Prepare the necessary adjusting journal entries on December 31, 2018 so as to bring the financial records of Always Fit Company up-to-date. Workings are required, but explanations are NOT required. If no adjusting entries are required, state “No entry” and name the accounting principle applied.

(b) Prepare the income statement of the Company for the year ended December 31, 2018, showing breakdown of items under the captions of Total Revenues, Total Expenses, Profit before Tax, Profit after Tax.

(c) Prepare the statement of financial position as of December 31, 2018, showing breakdown of items under the captions of Total Assets, Total Liabilities, Total Shareholder’s Equity and Total Liabilities & Shareholders’ Equity.

Case Study: PackCo

PackCo is an Australian-listed company that manufactures packaging products. PackCo services customers that are mainly food and beverage producers. The company currently operates in Australia, New Zealand and USA, and employs more than 6,000 staff. With its head office in Melbourne, Victoria, PackCo is listed on the Australian Stock Exchange and operates a number of production facilities in Australia, mainly in Victoria and South Australia. Since its inception, the company has grown steadily with revenues reaching almost USD $4 billion in 2016. The company has also acquired a number of other businesses to support its business growth.

PackCo sells its products and services to both local and overseas customers, and is reliant on third party logistics (3PLs) for transportation and forwarding companies to move its products. A newly appointed Supply Chain Optimisation Manager, Aras, has been tasked to oversee transportation and freight optimisation within PackCo. His responsibilities include conducting RFPs (requests for proposals) for the selection of carriers, and also implementing S&OP and CPFR projects to ensure that demand planning within the category is cost efficient and service effective.

Despite the implementation of an ERP system, management and replenishment of inventory to the right location has been a challenge.

Aras, in his first weeks of this job in overseeing one of the business groups within PackCo, recognised that due to forecast inaccuracies, it would be a big challenge to get the transport planning right. Despite the implementation of an ERP system, due to master data inaccuracies, management and replenishment of inventory to the right location has been a challenge. This has led to the demand planners in his team resorting to using spreadsheets to communicate demand requirements to the providers. Also, the lack of accurate data has resulted in higher inventories and accumulation of aged and obsolete stock.

Aras realised that his supply chain team has constantly exceeded its logistics budget to provide outstanding service levels for customers. Due to lack of clear sales strategy, expedited delivery or special production runs for low-order customers have further reduced the profit margins. For example, one of PackCo’s biggest accounts, Healthy Foods, spends only $2 million a year and, yet the logistics costs incurred servicing this client as a percent of revenue is over 25%.

Aras, prior to his first quarterly C-level management meeting, asked his team to run some analysis for the customer base and its use of 3PL provider services. The results were astonishing:

36.1% of the customer base accounts for 73% of the company’s operating profits.

24.9% of the customer base accounts for approximately USD246 million in losses.

the average DIFOT (deliver in-full and on-time) rate is 99.6% for the customer base.

the average logistics costs as a per cent of revenue across the customers is 16.3%.

there is no long-term contract with any 3PLs. Contracts tend to be 'arms-length' and negotiated with the 3PLs on ad-hoc basis.

68.2% of the outbound deliveries tend to be LTL (less-than-truckload).

special production runs lead to overtime wastage of more than USD $46 million in the last financial year.

Question:

Students are required to prepare a one-page executive summary (no more than 500 words) that describes the problem(s) identified from the case company and to prescribe recommendations to overcome the problems and take following elements in consideration.

1) Identification of key issues and their practical ramifications.

2) Rich recommendations (or recommended solutions).

3) Logical and coherent argument to support recommendations, substantiated, where appropriate, by credible, tested practices and/or well established academic paradigms or perspectives.

4) Indication of limitations or plausible pitfalls arising from implementation of recommendations.

What countries surprise you that there are no publicly available cybersecurity strategies??