You are conducting a study to determine if there is a relationship between annual household income and a high school student’s GPA. The school district you are studying is diverse and lower income.

a) Before you conduct the study, do you expect there to be an association between these two variables? Why or why not? Which should be the explanatory variable?

b) You collect data from a random sample of 15 students. The first row of the table is household income of a particular student (in thousands of dollars) and the second row is the GPA of that particular student.

c) Does the data have a scatterplot that shows a linear association? What is the correlation coefficient? What does it tell you about the association between these two variables?

d) Use the above data to make a linear (regression) model.

e) Use the model to predict the GPA of a high-schooler that comes from a family that has a household income of $48,000.

f) How accurate is the model’s prediction of GPA for the family that makes $44,000?

g) If a family’s income increases by $10,000, what is the amount of change in a student’s GPA, as predicted by the model?

h) Statisticians often state “correlation is not necessarily causation.” Would it be correct to conclude that household income is “causing” GPA? Is it possible that there are other variables that are “lurking,” causing GPA and household income to be correlated? What might these variables be?

You plan to invest in the Kish Hedge Fund, which has total capital of $500 million invested in five stocks:

Kish's beta coefficient can be found as a weighted average of its stocks' betas. The risk-free rate is 5%, and you believe the following probability distribution for future market returns is realistic:

1. What is the equation for the Security Market Line (SML)? (Hint: First determine the expected market return.)
   
   1. r_i = 3.8% + (9.2%)b_i
   2. r_i = 3.8% + (7.7%)b_i
   3. r_i = 5.0% + (9.2%)b_i
   4. r_i = 8.5% + (11.0%)b_i
   5. r_i = 5.0% + (7.7%)b_i
   
   -Select ONE
   
2. Calculate Kish's required rate of return. Do not round intermediate calculations. Round your answer to two decimal places.
     %
3. Suppose Rick Kish, the president, receives a proposal from a company seeking new capital. The amount needed to take a position in the stock is $50 million, it has an expected return of 14%, and its estimated beta is 1.4. Should Kish invest in the new company?
   The new stock -Select-should notshouldItem 3 be purchased.
   
   At what expected rate of return should Kish be indifferent to purchasing the stock? Round your answer to two decimal places.
     %

Milo Company manufactures beach umbrellas. The company is preparing detailed budgets for the third quarter and has assembled the following information to assist in the budget preparation:

The Marketing Department has estimated sales as follows for the remainder of the year (in units):

The selling price of the beach umbrellas is $12 per unit.

All sales are on account. Based on past experience, sales are collected in the following pattern:

Sales for June totaled $480,000.

The company maintains finished goods inventories equal to 15% of the following month’s sales. This requirement will be met at the end of June.

Each beach umbrella requires 4 feet of Gilden, a material that is sometimes hard to acquire. Therefore, the company requires that the ending inventory of Gilden be equal to 50% of the following month’s production needs. The inventory of Gilden on hand at the beginning and end of the quarter will be:

Gilden costs $0.60 per foot. One-half of a month’s purchases of Gilden is paid for in the month of purchase; the remainder is paid for in the following month. The accounts payable on July 1 for purchases of Gilden during June will be $52,890.

2. Prepare a production budget for each of the months July–October.

At January 1, 2018, Café Med leased restaurant equipment from Crescent Corporation under a nine-year lease agreement. The lease agreement specifies annual payments of $31,000 beginning January 1, 2018, the beginning of the lease, and at each December 31 thereafter through 2025. The equipment was acquired recently by Crescent at a cost of $234,000 (its fair value) and was expected to have a useful life of 13 years with no salvage value at the end of its life. (Because the lease term is only 9 years, the asset does have an expected residual value at the end of the lease term of $68,243.). Both (a) the present value of the lease payments and (b) the present value of the residual value (i.e., the residual asset) are included in the lease receivable because the two amounts combine to allow the lessor to recover its net investment. Crescent seeks a 9% return on its lease investments. By this arrangement, the lease is deemed to be a finance lease.

Required: 1. What will be the effect of the lease on Crescent’s earnings for the first year (ignore taxes)? (Enter decreases with negative numbers.)

2. What will be the balances in the balance sheet accounts related to the lease at the end of the first year for Crescent (ignore taxes)?

At January 1, 2018, Café Med leased restaurant equipment from Crescent Corporation under a nine-year lease agreement. The lease agreement specifies annual payments of $27,000 beginning January 1, 2018, the beginning of the lease, and at each December 31 thereafter through 2025. The equipment was acquired recently by Crescent at a cost of $198,000 (its fair value) and was expected to have a useful life of 12 years with no salvage value at the end of its life. (Because the lease term is only 9 years, the asset does have an expected residual value at the end of the lease term of $46,826.) Crescent seeks a 9% return on its lease investments. By this arrangement, the lease is deemed to be an operating lease. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.)
  
Required:
1. What will be the effect of the lease on Café Med’s earnings for the first year (ignore taxes)? (Enter decreases with negative numbers)
2. What will be the balances in the balance sheet accounts related to the lease at the end of the first year for Café Med (ignore taxes)?

(For all requirements, round your intermediate calculations to the nearest whole dollar amount.

This problem consists of four independent mini-problems.

Omit headings other than those already given. A. Kriter Kitchen Tools produces and sells insulated ice buckets. The sales budget for 2016 is as follows: 1st quarter — 8,000 units 3rd quarter — 13,000 units 2nd quarter — 11,000 units 4th quarter — 10,000 units Kriter desires an ending inventory equal to 10% of the next quarter's sales. The January 1, 2016 inventory is 800 units. Unit sales during the 1st quarter of 2017 are estimated at 9,000 units. Instructions: Compute required production for 2016, showing quarterly data. Description Quarter 1 Quarter 2 Quarter 3 Quarter 4 —————————————————————————————————————————— —————————————————————————————————————————— —————————————————————————————————————————— —————————————————————————————————————————— —————————————————————————————————————————— —————————————————————————————————————————— —————————————————————————————————————————— —————————————————————————————————————————— ——————————————————————————————————————————

B. Shanigan’s Manufacturers is preparing its direct labor budget for the second quarter of 2017 from the following budgeted production figures: April—8,000 units; May—7,000 units; and June—9,000 units. Each unit requires 3.25 hour of direct labor. The hourly wage rates are expected to be $15 in April, and $15.50 in May and June. Instructions: Prepare a direct labor budget for the quarter, showing monthly data. Description April May June Quarter —————————————————————————————————————————— —————————————————————————————————————————— —————————————————————————————————————————— —————————————————————————————————————————— —————————————————————————————————————————— —————————————————————————————————————————— —————————————————————————————————————————— ——————————————————————————————————————————

C. JetGreen Cleaners makes 80% of its sales on credit. Experience shows that 25% of the credit customers pay in the month of sale, 55% within the following month, the rest during the next month. Total sales for May, June, July, and August are estimated at $180,000; $220,000; $280,000; and $200,000, respectively. Instructions: Determine budgeted cash receipts for July and August. Description July August —————————————————————————————————————————— —————————————————————————————————————————— —————————————————————————————————————————— —————————————————————————————————————————— —————————————————————————————————————————— —————————————————————————————————————————— —————————————————————————————————————————— ——————————————————————————————————————————

D. Southside Sports is preparing its annual cash budget, showing quarterly data, for 2017. A $14,000 cash balance is desired at the end of each quarter. Borrowings and repayments are in $1,000 increments at 6% annual interest. The company borrows at the beginning of a quarter based on the estimated deficiency. Interest is paid only when principal is repaid at the end of a quarter with excess cash. The maximum amount of principal was repaid in the second and fourth quarters. The cash balance on December 31, 2016 is $17,000. Total receipts and disbursements, other than borrowings and principal or interest payments, are estimated at: Quarter 1 Quarter 2 Quarter 3 Quarter 4 Disbursements: $110,000 $135,000 $124,000 $140,000 Receipts: 102,000 142,000 120,000 155,000 Instructions: Prepare a schedule of estimated borrowings and repayments of principal and interest for the four quarters of 2017. Description Quarter 1 Quarter 2 Quarter 3 Quarter 4 ——————————————————————————————————————————

The beginning inventory at Midnight Supplies and data on purchases and sales for a three month period ending March 31 are as follows:

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Chart of Accounts

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FIFO

1. Record the inventory, purchases, and cost of goods sold data in a perpetual inventory record similar to the one illustrated in

Exhibit 3

, using the first-in, first-out method. Under FIFO, if units are in inventory at two different costs, enter the units with the LOWER unit cost first in the Cost of Goods Sold Unit Cost column and in the Inventory Unit Cost column.

Points:

0 / 95

Feedback

Check My Work

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Journal

2. Determine the total sales and the total cost of goods sold for the period. Journalize the entries in the sales and cost of goods sold accounts. Assume that all sales were on account and date your journal entry March 31. Refer to the Chart of Accounts for exact wording of account titles.

Lean Principles

Bright Night, Inc., manufactures light bulbs. Its purchasing policy requires that the purchasing agents place each quarter’s purchasing requirements out for bid. This is because the Purchasing Department is evaluated solely by its ability to get the lowest purchase prices. The lowest bidder receives the order for the next quarter (90 working days).

To make its bulb products, Bright Night requires 52,200 pounds of glass per quarter. Bright Night received two glass bids for the third quarter, as follows:

• Central Glass Company: $23.00 per pound of glass. Delivery schedule: 52,200 (580 lbs. x 90 days) pounds at the beginning of July to last for 3 months.
• Ithaca Glass Company: $23.15 per pound of glass. Delivery schedule: 580 pounds per working day (90 days in the quarter).

Bright Night accepted Central Glass Company’s bid because it was the low-cost bid.

1. A manufacturing company gets quotes from each supplier and allocates the purchase order to the company which quotes the lowest price with the expected quality. Is this process effective in long run? Identify reason that supports the answer.

1. Yes
2. No

Reason:

1. The policy is effective as it lowers the cost of purchase.
2. The policy considers the quoted price and the quality of the product is ignored.
3. The policy of the company is not practically viable as it is not building long-term relationships with its suppliers. The reputation of the company may be affected.
4. Supplier relationships are not required as the products are purchased for the quarter alone.

2. A manufacturing company gets quotes from each supplier and allocates the purchase order to the company which quotes the lowest price with the expected quality. Are there any additional costs that are involved in bulk purchase for the quarter? Identify reason that supports the answer.

1. Yes
2. No

Reason:

1. The cost of storage, obsolescence, material management and wastages are ignored in this concept.
2. The cost of storage, obsolescence, material management and wastages are included in the purchase cost computation.
3. The cost related to quality can be compensated as the price of the material is low.
4. The responsibility of the manager is to get the lowest bid for the product and all other information is irrelevant.

3. Considering only inventory financing costs, what is the additional cost per pound of Central Glass Company’s bid if the annual cost of money is 8%? (Hint: Determine the average value of glass inventory held for the quarter and multiply by the quarterly interest charge, then divide by the number of pounds.) Round to the nearest cent.
$ per lb.

Lean Accounting

Dashboard Inc. manufactures and assembles automobile instrument panels for both eCar Motors and Greenville Motors. The process consists of a lean product cell for each customer’s instrument assembly. The data that follow concern only the eCar lean cell.

For the year, Dashboard Inc. budgeted the following costs for the eCar production cell:

Dashboard Inc. plans 2,000 hours of production for the eCar cell for the year. The materials cost is $240 per instrument assembly. Each assembly requires 24 minutes of cell assembly time. There was no April 1 inventory for either Raw and In Process Inventory or Finished Goods Inventory.

The following summary events took place in the eCar cell during April:

a. Electronic parts and wiring were purchased to produce 450 instrument assemblies in April.
b. Conversion costs were applied for the production of 400 units in April.
c. 380 units were started, completed, and transferred to finished goods in April.
d. 350 units were shipped to customers at a price of $800 per unit.

Required:

1. Determine the budgeted cell conversion cost per hour.
$ per hour

2. Determine the budgeted cell conversion cost per unit.
$ per unit

3. Journalize the summary transactions (a) through (d). If an amount box does not require an entry, leave it blank.

4. Determine the ending balance in Raw and In Process Inventory and Finished Goods Inventory.

5. Lean accounting is different from traditional accounting because it is more   and uses  control. As a result, the number of transactions are  . In many lean operations, purchased materials are charged to a  . Direct labor is  . Often, nonfinancial performance measures, such as  , are used to monitor performance.

please solve with best of your ability. The whole thing, I already talked to the administrative services.

What is the one thing, for Aristotle, which the human being seeks most for its own sake than for the sake of anything else? Why cannot money, pleasurable goods, or fame be the highest goods? What, in fact, is a virtuous person, for Aristotle? That is, what are some of the elements that go into a virtuous life? How does he characterize a person who has practical wisdom?

Kingsport Containers Company makes a single product that is subject to wide seasonal variations in demand. The company uses a job-order costing system and computes plantwide predetermined overhead rates on a quarterly basis using the number of units to be produced as the allocation base. Its estimated costs, by quarter, for the coming year are given below:

Management finds the variation in quarterly unit product costs to be confusing and difficult to work with. It has been suggested that the problem lies with manufacturing overhead because it is the largest element of total manufacturing cost. Accordingly, you have been asked to find a more appropriate way of assigning manufacturing overhead cost to units of product.

Required:

1. Assuming the estimated variable manufacturing overhead cost per unit is $0.60, what must be the estimated total fixed manufacturing overhead cost per quarter?

2. Assuming the assumptions about cost behavior from the first three quarters hold constant, what is the estimated unit product cost for the fourth quarter?

3. What is causing the estimated unit product cost to fluctuate from one quarter to the next?

4. Assuming the company computes one predetermined overhead rate for the year rather than computing quarterly overhead rates, calculate the unit product cost for all units produced during the year.

Required 1:

Assuming the estimated variable manufacturing overhead cost per unit is $0.60, what must be the estimated total fixed manufacturing overhead cost per quarter?

Required 2:

Assuming the assumptions about cost behavior from the first three quarters hold constant, what is the estimated unit product cost for the fourth quarter? (Do not round the intermediate calculations and round the "Unit product cost" to 2 decimal places.)

Required 3:

What is causing the estimated unit product cost to fluctuate from one quarter to the next?

Required 4:

Assuming the company computes one predetermined overhead rate for the year rather than computing quarterly overhead rates, calculate the unit product cost for all units produced during the year. (Do not round the intermediate calculations and round the "Unit product cost" to 2 decimal places.)