The chapter 22 team discussion problem is presented below.

• If your team has three members, complete part 1 only; each team member should prepare a budgeted income statement for a different month (April, May, or June).
• If your team has four members, complete parts 1 and 2; the first three team members will complete part 1 (April, May, and June, respectively), and the fourth team member will complete part 2.

The problem is reproduced below.

• For full credit on part 1: present the budgeted income statement for your month neatly, and show all calculations for your Sales and Cost of Goods Sold figures.
• For full credit on part 2: your recommendation should be a professional-quality full paragraph of 3-4 sentences.

IMPORTANT INSTRUCTIONS:

1. Navigate to your Group Homepage and use your Group's Announcement tool to decide among your teammates who will work on which parts (budgeted income statements for April, May, and June in part 1, and -- if your team has a fourth member -- the recommendation letter in part 2).

2. Once your roles are agreed, post your solutions in your group's Discussion forum. Be sure to clearly label your answer, indicating which part you are answering.

3. In teams that have 4 members, note that the person who completes part 2 will need to have access to the solutions to part 1 before they can complete their recommendation. Accordingly, the deadline for completing part 2 is 24 hours after the initial submission deadline.

4. For full credit, be sure to comment constructively on your teammates' posts.

CHAPTER 22 TEAM DISCUSSION PROBLEM

Kodiak Office Furniture expects second-quarter 2020 sales of its new line of computer furniture to be the same as the first quarter's sales (reported below) without any changes in strategy. Monthly sales averaged 40 desk units (sales price of $1,250) and 20 chairs (sales price of $500).

* Revenue: (120 desks x $1,250) + (60 chairs x $500) = $150,000 + $30,000 = $180,000.

** Cost of goods sold: [variable portion = (120 desks x $750) + (60 chairs x $250)] + [fixed portion = $10,000] = $115,000.

You believe that sales will increase each month for the next three months (April, 48 desks, 32 chairs; May, 52 desks, 35 chairs; June, 56 desks, 38 chairs) if selling prices are reduced to $1,150 for desks and $450 for chairs, and advertising expenses are increased by 10% and remain at that level for all three months. The products' variable cost will remain at $750 for desks and $250 for chairs. The sales staff will continue to earn a 10% commission, the fixed manufacturing costs will be $10,000 per month, and other fixed expenses will remain at $6,000 per month.

Required

1. Prepare budgeted income statements for each of the months of April, May, and June that show the expected results from implementing the proposed changes.

2. Use the budgeted income statements from part 1 to recommend whether Santana Rey should implement the proposed changes. Explain.

^{_{Just do JUNE}}

^{_{Please follow the same format. Thank you}}

Calculations for May:

Sales: 52 desks @ $1150 = $59,800 35 chairs @ $450 = $15,750 Total April Sales = $75,550

Variable Costs:   52 desks @ $750 = $39,000 35 chairs @ $250 = $8,750 Total Costs of Goods Sold = $47,750

Advertising: $3000 per month x 10% = $3300

Commissions: Sales of $75,550 x 10% = $7555

Fixed Expenses: $6000 per month, unchanged

In a survey of 100 randomly selected taxi drivers in a city, 76 support increased government spending on roads and bridges. In a survey of 100 randomly selected bus drivers in the same city, 82 support such spending. Compute the test statistic for a hypothesis test to compare the population proportion of taxi drivers to the proportion of bus drivers in the city that support such spending. Assume that the conditions for a hypothesis test for the difference between the population proportions are met. Round your answer to two decimal places.

3. The Chinese government is expected to increase military spending in 2017 to counter President Trump’s increased defense spending policies.

a. Explain in macroeconomic measurement, modeling, and movement terms how this action will affect GDP and inflation in China in the Chinese Transactions sector and the Chinese Money sector.

b. Explain how increases in military spending in China could affect the economies of other countries using macroeconomic measures, models, and movement cycles. State at least two different perspectives on what the changes will mean.

A certain newspaper has an annual subscription price of $338, and annual variable costs per subscriber are $300. Current retention spending is $8 a year per customer resulting in an attrition rate of 23% per year. The marketing department estimates that if the newspaper were to increase its retention spending to $12 a year, the attrition rate would be reduced to 15%. What would be the difference in the CLV if the spending is increased and a discount rate of 13% is used?

Please post the Excel formula

For this coding exercise, you need to create a new Java project in Eclipse and finish all the coding in Eclipse. Run and debug your Eclipse project to make sure it works. Then you can just copy and paste the java source code of each file from Eclipse into the answer area of the corresponding box below.

The boxes will expand once you paste your code into them, so don’t worry about how it looks J

All data members are private and all methods are public in each class/interface in the exercise below.

Creare a class named CreditCard, which has three private data members:

1. domesticSpending of double type,
2. foreignSpending of double type,
3. and basicFeeRate of double type.

Provide:

1. default constructor with no parameters,
2. constructor with three parameters to initialize its three data members, respectively.
3. getter/setter methods for each data member

There are two effector methods:

1. Method calcBasicFee() takes no parameters and it returns a double type.
   1. This method calculates the basic transaction fee by multiplying the basicFeeRate with the sum of domestic and foreign spending.
   2. For example, if a person has $100 and $50 in domestic and foreign spending, respectively, then under a basicFeeRate of 2% (0.02), the credit card company will charge 0.02 * (100+50) = $3 as the basic transaction fee.
2. Method calcBasicMileage() takes no parameter and it returns a double type.
   1. This method calculates the basic mileage award for the user by awarding 1 mile for every $20 spent.
   2. Follow the same example above, this credit card user spends $150 (domestic and foreign in total), and will receive an award of $150 / ($20 per mile) = 7.5 miles.

/** CreditCard.java */

Code a subclass named ExpressCard that inherits from the superclass CreditCard, which has two private data members:

1. foreignFeeRate of double type,
2. and domesticBonusMileageRate of double type.

Provide:

1. default constructor with no parameters,
2. constructor with all parameters to initialize its own private data and the inherited data from CreditCard
3. getter/setter methods for each data member

There are two effector methods:

1. Method calcFee() takes no parameters and it returns double type.
   1. This method calculates the transaction fee.
   2. First you need to call the method in superclass to obtain the basic fee, and then for ExpressCard user, there is an extra charge for foreign spending.
   3. Given the same example above as in class CreditCard, the basic fee is $3, and under a foreignFeeRate of 3%, then the extra fee is calculated by multiplying $50 of foreign spending with 3% (0.03) of foreignFeeRate, which yields $50 *0.03 = $1.5, so the total fee is $3 + $1.5 = $4.5.
      
2. Method calcMileage() takes no parameters and it returns double type.
   1. This method calculates the mileage award.
   2. First you need to call the method in superclass to obtain the basic mileage, then there is a bonus mileage award for domestic spending under a rate of domesticBonusMileageRate.
   3. Given the same example as in class CreditCard, the basic mileage award is 7.5 miles, and if the domesticBonusMileageRate is 4% (0.04), then the bonus mileage is calculated by multiplying $100 of domestic spending with domesticBonusMileageRate 0.04, which yields 4 miles. Then the total mileage award is 7.5 + 4 = 11.5 miles.

/** ExpressCard.java */

Code a subclass named PremiumCard that inherits from the superclass CreditCard, which has two private data members:

1. annualMemberFee of double type,
2. and foreignBonusMileageRate of double type

Provide:

1. default constructor with no parameters,
2. constructor with all parameters to initialize its own private data and the inherited data from CreditCard
3. getter/setter methods for each data member

There are two effector methods:

1. Method calcFee() takes no parameters and it returns double type.
   1. This method calculates the transaction fee.
   2. First you need to call the method in superclass to obtain the basic fee, then for PremiumCard user, the annual member fee must be added on top of the basic fee.
   3. Given the same example above as in class CreditCard, the basic fee is $3, and if the annual member fee is $65, then the total fee is $3 + $65 = $68.

2. Method calcMileage() takes no parameters and it returns double type.
   1. This method calculates the mileage award.
   2. First you need to call the method in superclass to obtain the basic mileage, then there is a bonus mileage award for foreign spending under a rate of foreignBonusMileageRate.
   3. Given the same example above as in class CreditCard, the basic mileages award is 7.5 miles, and if foreignBonusMileageRate is 20% (0.2), then the bonus mileage is calculated by multiplying $50 of foreign spending with foreignBonusMileageRate 0.2, which yields 10 miles. Then the total mileage is 7.5 + 10 = 17.5 miles.

/** PremiumCard.java */

Code a class named JohnDoeTest that has a main method. Replace JohnDoe with your name.

In the main method, create two objects:

1. one ExpressCard object,
2. and one PremuimCard object

When creating these two objects, you need to use the constructor that has all parameters in each class, and you need to hardcode reasonable values for the parameters needed by the constructor in each class. (There is no need to ask user to input data - so don’t include the Scanner class!).

Then in the main method, use each object created above to invoke the necessary methods, so that you can calculate each object’s transaction fee and mileage award, then output the transaction fee and mileage award.

Keep 2-digit precision in the output for transaction fee, and keep 1-digit precision in output for mileage award.

/** JohnDoeTest.java, and replace JohnDoe with your name*/

The owners of an e-business have been successful in selling fashion products but are now venturing into another domain. Knowing that the impact of advertising on profit cannot be overemphasized, they are interested in determining the right amount to allocate to advertising for the new business. Based on a monthly report from the fashion e-business, a regression analysis of monthly profit (in thousands of dollars) on advertising spending (in hundreds of dollars) produced the following results: slope y-intercept r 1.26 2.543 0.7377 where y = profit (in $1000s) x = advertising spending (in $100s)

a. State the least-squares regression line for the data. ŷ = 0 + 0 x b.

Interpret the value of the slope as it relates to this problem.

For every $1 increase in advertising spending, there is a $1.213 increase in profit.

For every $100 increase in advertising spending, there is a $1,213 increase in profit.

For every $100 increase in advertising spending, there is a $121.3 increase in profit.

For every $1,000 increase in advertising spending, there is a $121.3 increase in profit.

c. Compute and interpret the coefficient of determination. R2= 0 Round to 4 decimal places

d. Predict the monthly profit for a month when advertising is $2,300. $0.00 Round to the nearest cent e. If the expected profit in a particular month is $49,163, about how much should be set aside for advertising that month? $0.00 Round to the nearest cent

The owners of an e-business have been successful in selling fashion products but are now venturing into another domain. Knowing that the impact of advertising on profit cannot be overemphasized, they are interested in determining the right amount to allocate to advertising for the new business. Based on a monthly report from the fashion e-business, a regression analysis of monthly profit (in thousands of dollars) on advertising spending (in hundreds of dollars) produced the following results:

where yy = profit (in $1000s)
           xx = advertising spending (in $100s)

a. State the least-squares regression line for the data.
ŷ = ŷ =

++

xx

b. Interpret the value of the slope as it relates to this problem.

For every $1 increase in advertising spending, there is a $1.213 increase in profit.

For every $100 increase in advertising spending, there is a $1,213 increase in profit.

For every $100 increase in advertising spending, there is a $121.3 increase in profit.

For every $1,000 increase in advertising spending, there is a $121.3 increase in profit.

c. Compute and interpret the coefficient of determination.
R2=R2=

Round to 4 decimal places

d. Predict the monthly profit for a month when advertising is $2,100.

Round to the nearest cent

e. If the expected profit in a particular month is $41,495, about how much should be set aside for advertising that month?

Round to the nearest cent

The owners of an e-business have been successful in selling fashion products but are now venturing into another domain. Knowing that the impact of advertising on profit cannot be overemphasized, they are interested in determining the right amount to allocate to advertising for the new business. Based on a monthly report from the fashion e-business, a regression analysis of monthly profit (in thousands of dollars) on advertising spending (in hundreds of dollars) produced the following results:

where yy = profit (in $1000s)
           xx = advertising spending (in $100s)

a. State the least-squares regression line for the data.
ŷ = ŷ =

++

xx

b. Interpret the value of the slope as it relates to this problem.

For every $1 increase in advertising spending, there is a $1.213 increase in profit.

For every $100 increase in advertising spending, there is a $1,213 increase in profit.

For every $100 increase in advertising spending, there is a $121.3 increase in profit.

For every $1,000 increase in advertising spending, there is a $121.3 increase in profit.

c. Compute and interpret the coefficient of determination.
R2=R2=

Round to 4 decimal places

d. Predict the monthly profit for a month when advertising is $2,300.

Round to the nearest cent

e. If the expected profit in a particular month is $43,448, about how much should be set aside for advertising that month?

Round to the nearest cent

In the Austrian View, in a market economy without government intervention, if there is an unusually large number of unemployed workers looking for a job without success

Select one:

a. The market wage rate will increase, giving an incentive to many of the workers to accept a new job, and as a result, the labor market will clear rather quickly.

b. The situation will last for a long time, because of the downward stickiness of the wage rate, unless the government intervenes by increasing its spending.

c. The market wage rate will decline, making it profitable for some businesses to hire many of these workers, and as a result, the labor market will clear rather quickly.

d. Many of the businesses will become pessimistic about their future prospects, leading them to decrease their investment in capital goods, and as a result, the number of unemployed workers will become even larger.

According to the real balances effect, as the price level in the U.S. falls,

a. Aggregate quantity demanded increases because lower price levels lead to lower interest rates, which stimulates spending.

b. The entire aggregate demand curve will shift to the right.

c. Aggregate quantity demanded increases because lower price levels cause the purchasing power of the dollar to increase.

d. Aggregate quantity demanded increases because U.S. consumers tend to buy more domestically-produced goods/services and fewer imports.

e. Answers b). and c). above.

and

An increase in aggregate supply (AS) will result in

a. Cost-push inflation.

b. The contraction phase of a business cycle.

c. The expansion phase of a business cycle.

d. Answers a). and b). above.

e. Answers a). and c). above.