A researcher was interested in the effects of alcohol on attractiveness of mate selected (referred to as the beer goggle effect). She compared the rating (by independent raters) on level of attractiveness of the partners that young people chose at a party. She compared a group before using alcohol then after using alcohol. Assessment was whether their chosen partners differed in levels of attractiveness. Higher scores indicated more attractive partners. The attractiveness of partner for each participant (measured by independent raters) in 2 scenarios for the same group (before using alcohol and after using alcohol) was as follows:

1. Test the hypothesis (Use alpha level of 0.05) using both manual and MS Excel calculations that there is no statistically significant difference between alcohol using and non-alcohol using group with regard to the level of attractiveness of the partners they chose by the end of the party. In your answer determine and interpret the strength of this relationship.

Topic 2:

Book: Operations and Supply Chain Management Jacobs & Chase 14e

2. The Levy Box plant produces wooden packing boxes to be used in the local seafood industry. Current operations allow the company to make 600 boxes per day, in two 8-hour shifts (300 boxes per shift). The company has introduced some moderate changes in equipment, and conducted appropriate job training, so that production levels have risen to 400 boxes per shift. Labor costs average $13 per hour for each of the 5 full-time workers on each shift. Capital costs were previously $4,000 per day, and rose to $4,200 per day with the equipment modifications. Energy costs were unchanged by the modifications, at $400 per day.

a) What is the firm's multifactor productivity ( exhibit 2.5) before and after the changes?

b) What is the firm's labor hours productivity before and after the changes?

c) What is the percent change in the multifactor productivity before and after the changes?

The Bookbinder Company has made $300,000 before taxes during each of the last 15 years, and it expects to make $300,000 a year before taxes in the future. However, in 2016 the firm incurred a loss of $750,000. The firm will claim a tax credit at the time it files its 2016 income tax return, and it will receive a check from the U.S. Treasury. Show how it calculates this credit, and then indicate the firm's tax liability for each of the next 5 years. Assume a 35% tax rate on all income to ease the calculations. Enter your answers as positive values. If an amount is zero, enter "0".

1. Prior Years	2014	2015
   Profit earned	$	$
   Carry-back credit	$	$
   Adjusted profit	$	$
   Tax previously paid (35%)	$	$
   Tax refund: Taxes previously paid	$	$

   
   Total check from U.S. Treasury $  
   
2. Firm's tax liability
   2017:    $  
   2018:    $  
   2019:    $  
   2020:    $  
   2021:    $  

BAK Corp. is considering purchasing one of two new diagnostic machines. Either machine would make it possible for the company to bid on jobs that it currently isn’t equipped to do. Estimates regarding each machine are provided below.

Click here to view the factor table.

Calculate the net present value and profitability index of each machine. Assume a 9% discount rate.

2. Turney Company produces and sells automobile batteries, the heavy-duty HD-240. The 2020 sales forecast is as follows.

3. The January 1, 2020, inventory of HD-240 is 2,120 units. Management desires an ending inventory each quarter equal to 40% of the next quarter’s sales. Sales in the first quarter of 2021 are expected to be 25% higher than sales in the same quarter in 2020.

Prepare quarterly production budgets for each quarter and in total for 2020.

Rodriguez, Inc., is preparing its direct labor budget for 2020 from the following production budget based on a calendar year.

Each unit requires 1.80 hours of direct labor.

Prepare a direct labor budget for 2020. Wage rates are expected to be $18 for the first 2 quarters and $20 for quarters 3 and 4. (Round Direct labor time per unit answers to 2 decimal places, e.g. 52.50.)

HOT AIR Company of Atlanta sells fans and heaters to retail outlets throughout the Southeast. Joe Smith, the president of the company, is thinking about changing the firm’s credit policy to attract customers away from competitors. The present policy calls for a 1/10, net 30 cash discount. The new policy would call for a 3/10, net 50 cash discount. Currently, 30 percent of Hot Air customers are taking the discount, and it is anticipated that this number would go up to 50 percent with the new discount policy. It is further anticipated that annual sales would increase from a level of $400,000 to $600,000 as a result of the change in the cash discount policy. The increased sales would also affect the inventory level. The average inventory carried by Hot Air is based on a determination of an EOQ. Assume sales of fans and heaters increase from 15,000 to 22,500 units. The ordering cost for each order is $200 and the carrying cost per unit is $1.50 (these values will not change with the discount). The average inventory is based on EOQ/2. Each unit in inventory has an average cost of $12. Cost of goods sold is equal to 65 percent of net sales; general and administrative expenses are 15 percent of net sales, and interest payments of 14 percent will only be necessary for the increase in the accounts receivable and inventory balances. Taxes will be 40 percent of before-tax income.

a. Compute the accounts receivable balance before and after the change in the cash discount policy. Use the net sales (total sales minus cash discounts) to determine the average daily sales.

b. Determine EOQ before and after the change in the cash discount policy. Translate this into average inventory (in units and dollars) before and after the change in the cash discount policy.

c. Complete the following income statement. Before Policy Change After Policy Change Net sales (Sales – Cash discounts)

................ Cost of goods sold........................................

Gross profit...................................................

General and administrative expense.............

Operating profit............................................

Interest on increase in accounts receivable and inventory (14%).................

Income before taxes......................................

Taxes.............................................................

Income after taxes........................................

d. Should the new cash discount policy be utilized? Briefly comment.

Show ALL work

Ratio Analysis. The Williams Corporation’s forecasted 2010 financial statements follow, along with some industry average ratios.

a. Calculate the indicated ratios for William’s in the appropriate blanks.

b. Outline William’s strengths and weaknesses as compared to its industry. Be detailed in your ratio analysis.

c. Recommend at least three areas for correction. Be sure to support your recommendations.

d. Why is being trustworthy essential to success in the business world? Use at least two of the following scriptures to answer this question: Psalm 101:7, Proverbs 4:20-27, Proverbs 13:11, and Proverbs 28:12-13.

Boehm Corporation has had stable earnings growth of 6% a year for the past 10 years, and in 2019 Boehm paid dividends of $1 million on net income of $10 million. However, net income is expected to grow by 22% in 2020, and Boehm plans to invest $7.5 million in a plant expansion. This one-time unusual earnings growth won't be maintained, though, and after 2020 Boehm will return to its previous 6% earnings growth rate. Its target debt ratio is 34%. Boehm has 1 million shares of stock.

1. Calculate Boehm's dividend per share for 2020 under each of the following policies:
   1. Its 2020 dividend payment is set to force dividends per share to grow at the long-run growth rate in earnings. Round your answer to the nearest cent.

      $  

   2. It continues the 2019 dividend payout ratio. Round your answer to the nearest cent.

      $  

   3. It uses a pure residual policy with all distributions in the form of dividends (34% of the $7.5 million investment is financed with debt). Round your answer to the nearest cent.

      $  

   4. It employs a regular-dividend-plus-extras policy, with the regular dividend being based on the long-run growth rate and the extra dividend being set according to the residual policy. What will the extra dividend be? Round your answer to the nearest cent.

      $  

2. Which of the preceding policies would you recommend?

   -Select-

Go Party Ltd (GPL) is a successful New Zealand catering company, operating in South Island. It has a balance date of 30 June. During the preparation of the 30 June 2020 financial statements, the following two issues have come into the light. The details of these issues are as follows:

(a) After a wedding party held by a customer in January 2020, 60 people became seriously ill, possibly as a result of food poisoning from food served by GPL. Legal proceedings were commenced seeking damages from GPL. The company lawyers advised that owing to developments in the case, and it was probable that the company would be found liable and the estimated damages were $85,000 that would be material to the company’s reported profits.

(b) On 15 February 2020, the Department of Occupational Health and Safety undertook an audit against the complaints regards to the company’s unsafe storage practices. If found to be negligent by the court, the company will have to pay a fine and incur cleaning costs. At the end of the financial year, the outcome of the audit is unknown. The company directors are of the opinion that there is a 50% chance that Go Party Ltd will be found negligent.

Required: Determine how GPL should treat the above two issues in its financial statements for the year ended 30 June 2020. Include in your answer the criteria as per NZ IAS 37, necessary journal entries (if required) or any disclosure note/s required.

Go Party Ltd (GPL) is a successful New Zealand catering company, operating in South Island. It has a balance date of 30 June. During the preparation of the 30 June 2020 financial statements, the following two issues have come into the light. The details of these issues are as follows:

(a)   After a wedding party held by a customer in January 2020, 60 people became seriously ill, possibly as a result of food poisoning from food served by GPL. Legal proceedings were commenced seeking damages from GPL. The company lawyers advised that owing to developments in the case, and it was probable that the company would be found liable and the estimated damages were $85,000 that would be material to the company’s reported profits.

(b)   On 15 February 2020, the Department of Occupational Health and Safety undertook an audit against the complaints regards to the company’s unsafe storage practices. If found to be negligent by the court, the company will have to pay a fine and incur cleaning costs. At the end of the financial year, the outcome of the audit is unknown. The company directors are of the opinion that there is a 50% chance that Go Party Ltd will be found negligent.

Required:

Determine how GPL should treat the above two issues in its financial statements for the year ended 30 June 2020. Include in your answer the criteria as per NZ IAS 37, necessary journal entries (if required) or any disclosure note/s required.