1. Describe in a paragraph, What is price elasticity?

2. How does Moore’s Law relate to this concept?

3. What’s special about falling chip prices compared to price drops for products like clothing or food?

A clock has an hour hand of length 2.4 cm and a minute hand of length 3.8 cm. (a) Calculate the position and velocity of the hour hand at noon. (b) Calculate the position and velocity of the minute hand at 12:15.

3. Represent the following information in a Lorenz curve. Make sure that the diagram is correctly labeled.

Part of the accounting records for the last quarter of 2014 of Alexandra Corp., a Canadian private company applying IFRS, were destroyed due to a software malfunction. You have been tasked with reconstructing the accounting records related to inventory and receivables.

The following information has been salvaged:

Extract from the Quarterly Statement of Financial Position as at December 31, 2014

Aging of receivables analysis as at December 31, 2014 (Incomplete)

By talking to the CEO, the controller, and other employees of the accounting department you were also able to gather the following information:

Firm’s Accounting Policies:

a) The company uses the periodic inventory system and the FIFO cost flow assumption.

b) The company applies the aging of receivables analysis to adjust the AFDA at year-end.

The only inventory and sale-related transactions during the quarter were:

1. On October 15, 2014, Alexandra Corp. sold 80 units at $10 each, shipped on the same day, FOB destination, and arrived 3 days later, freight-out of $30 for the entire shipment, and payment within 30 days. As at December 31, 2014, the client had still not paid.

2. On November 10, Alexandra Corp. received from its supplier a shipment of 1,000 units costing $5 each. Alexandra Corp. also had to cover shipping costs of $500, import duty taxes of $100 (non-refundable).

3. On December 1, Alexandra Corp. sold 500 units at $10 each, 2/10, n/30. The client paid half of the total amount on December 5, but made no other payment since.

4. On December 15, 2014, Alexandra Corp. signed a contract for the purchase of 500 units of inventory from a Canadian supplier at a price of $6.50 per unit. The supplier shipped the goods FOB destination on December 27. On December 31, 2014, the goods had not yet been delivered, and no invoice had been received.

Other information:

a) The physical count of inventory at the end of the previous quarter was 100 units. The physical count of inventory at the end of December 2014 was 520 units.

b) The beginning balance for Gross Accounts Receivable for the quarter was $5,000.

c) The CEO estimates that inventory on hand at the end of 2014 could be sold for a per unit price of $5.50, with $0.10 per unit costs to sell.

Required:

1. Re-construct the journal entries for the transactions during the quarter.

2. Make ALL necessary quarter-end adjusting entries as at December 31, 2014. Show your computation. (Hint: there are 4 adjusting entries needed to (1) record the write-down of inventory (2) record COGS and update ending inventory (3) record write-off (4) record bad debt expense using aging analysis.)

3. Present to the CEO the calculation of gross profit.

(Please use the Gross Method to record the sales discount)

A savvy business owner wanted to assess whether the type of fragrance influenced the amount of money spent. He tried peppermint, lavender, male cologne, and a floral perfume in his four stores. Amount of money spent (in hundreds) is reported for each type of fragrance. Conduct a one-way repeated measures ANOVA to determine whether fragrance influences total amount of money spent.

Given data from a completely randomized design experiment:

Treatment 1 = {3.8, 1.2, 4.1, 5.5, 2.3}

Treatment 2 = {5.4, 2.0, 4.8, 3.8}

Treatment 3 = {1.3, 0.7, 2.2}

a.) Calculate the treatment means and variances for each of the 3 treatments above.

b.) Use statistical software to complete the ANOVA table.

c.) In words, what is the null and alternative hypotheses for the ANOVA F-test?

d.) Test the null hypothesis that µ1=µ2=µ3against the alternative hypothesis that at least two means differ. Use α = .01.

e.) Explain in words what the ANOVA test tells us about the equality of treatment means?

Fill in the blank options questions 1-3:

0.66:1

cost of goods available for sale

estimated cost of goods sold

FIFO

first-in, first-out

gross margin method

higher

historical

last-in, first-out

less

LIFO

Lower

Merchandise Inventory

net sales

replacement

retail inventory method

Fill in the blank options questions 4:

Overstated

understated

At the beginning of the current period, Hutton Company holds 1,000 units of its only product with a per-unit cost of $18.  A summary of purchases during the current period follows:

                                                                        Units               Unit Cost                    Cost

Beginning Inventory                                     1,000                $18.00                   $18,000

Purchases: #1                                                1,800                  18.25                      32,850

                    #2                                                    800                  18.50                     14,800

                    #3                                                1,200                 19.00                     22,800

                                                                        ---------                                                       ------------

Goods Available for Sale                               4,800                                              $88,450

                                                                        ======                                         ========

During the current period, Hutton sells 2,800 units.

Required:

1. Assume that Hutton uses the first-in, first-out (FIFO) method.  Compute the cost of goods sold for the current period and the ending inventory balance.
2. Assume that Hutton uses the last-in, first-out (LIFO) method.  Compute the cost of goods sold for the current period and the ending inventory balance.
3. Assume that Hutton uses the average cost (AC) method.  Compute the cost of goods sold for the current period and the ending inventory balance.
4. As manager, which of these three inventory costing methods would you choose:
   1. To reflect what is probably the physical flow of goods?  Explain.
   2. To minimize income taxes for the period?  Explain.
5. Assume that Hutton utilizes the LIFO method and instead of purchasing lot #3, the company allows its inventory level to decline and delays purchasing lot #3 until the next period.  Compute the

cost of goods sold under this scenario and discuss the effect of end-of-year purchases under LIFO.

The technology underlying hip replacements has changed as these operations have become more popular (over 250,000 in the United States in 2008). Starting in 2003, highly durable ceramic hips were marketed. Unfortunately, for too many patients the increased durability has been counterbalanced by an increased incidence of squeaking. An article reported that in one study of 152 individuals who received ceramic hips between 2003 and 2005, 14 of the hips developed squeaking.

(a) Calculate a lower confidence bound at the 95% confidence level for the true proportion of such hips that develop squeaking. (Round your answer to three decimal places.)