Cardinal Company has determined the following standard cost data necessary to manufacture one unit of its primary product:

Direct Materials….. (6 pounds @ $20)

Direct Labor…………. .(8 hours @ $15)

During 20X1, Cardinal produced only 1 unit of product. This unit required 7 pounds of direct material (a total of 8 pounds were purchased at a cost of $18 per pound). In addition, total payroll costs for direct labor during 20X1 were $130 (10 hours @ $13 per hour).

Required:

Answer the following questions, indicating BOTH the dollar amount of each variance and whether each variance is FAVORABLE (F) or UNFAVORABLE (U).

The materials price variance was $__
The materials efficiency (usage) variance was $__
The labor rate (price) variance was $__
The labor efficiency (usage) variance was $__

The total cost of the unit completed in 20X1 and transferred from Work in Process to Finished Goods was $

Mary Itzoff is a scholarship soccer player at Local University. During the summer she works at a youth all-sport camp that several of the university’s coaches operate. The sports camp runs for eight weeks during July & August. Campers come for a one-week period, during which time they live in the university’s dormitories and use the athletic fields and facilities. At the end of a week a new group of players/campers comes in.

Mary serves primarily as one of the camp soccer instructors. However, she has also been placed in charge of arranging for sheets for the beds the campers will sleep on in the dormitories. Mary has been instructed to develop a plan for purchasing and cleaning sheets each week of camp at the lowest possible cost.

Clean sheets are needed at the beginning of each week, and the campers use the sheets all week. At the end of the week campers strip their beds and place their sheets in large bin. Mary must arrange either to purchase new sheets or clean old sheets. A set of new sheets costs $10.00. A local laundry has indicated it will clean a set of sheets for $4.00. Also a couple of Mary’s friends have asked her to let them clean some of the sheets. They have told her they will only charge $2.00 for each set of sheets. However, the laundry will provide cleaned sheets in a week, Mary’s friends can only deliver cleaned sheets in two weeks. They are going to summer school and plan to launder the sheets at night in a neighbourhood laundromat.

The following number of campers have registered during each of the eight weeks will operate

Based on the discussions with camp administrators from previous summers and on some old camp records and receipts, Mary estimates that about 20% of the cleaned sheets that are returned will have to be discarded and replaced. The campers spill food and drinks on the sheets, and sometimes the stains will not come out of the sheets during cleaning. Also, the campers occasionally tear the sheets or the sheets can be torn at the cleaners. In either case, when sheets come back from the cleaners and are put on the beds, 20% are taken off and thrown away.

At the beginning of the summer, the camp has no sheets available, so initially sheets must be purchased. Sheets are thrown away at the end of the summer.

Mary’s major at Local University is operations management, and she wants to develop a plan for purchasing and cleaning sheets using linear programming. Help Mary formulate a linear programming model for the problem, and solve it using Excel.

1. Use the following production function to answer the questions below where labor is measured in workers per day, capital is measured in sewing machines available per day, and output is measured in jeans per day.

                                                                        Labor

                                                1        2      3       4       5       6       7       8

                        Capital

                              1                 15     34     44     48     50     51     51     47

                              2                 20     46     64     72     78     81     82     80

                              3                 21     50     73     83     92     99   103   103

Suppose a firm had three sewing machines and could vary only the amount of labor input.

a. Graph the production function for jeans given three sewing machines.

b. Compute and graph the marginal product curve on a separate diagram.

c. What amount of labor is associated with the point of diminishing returns?

d. After the point of diminishing returns is reached, is total output still increasing when marginal product begins
    to diminish? In other words, does diminishing returns imply diminishing output? Explain your answer.  

e. When total output stops increasing, what is the value of marginal product?

The comparative balance sheets for 2018 and 2017 are given below for Surmise Company. Net income for 2018 was $88 million.

Required:
Prepare the statement of cash flows of Surmise Company for the year ended December 31, 2018. Use the indirect method to present cash flows from operating activities because you do not have sufficient information to use the direct method. You will need to make reasonable assumptions concerning the reasons for changes in some account balances. A spreadsheet or T-account analysis will be helpful. (Hint: The right to use a building was acquired with a seven-year lease agreement. Annual lease payments of $8 million are paid at January 1 of each year starting in 2018.) (Enter your answers in millions (i.e., 10,000,000 should be entered as 10). Amounts to be deducted should be indicated with a minus sign.)

A study regarding the relationship between age and the amount of pressure sales personnel feel in relation to their jobs revealed the following sample information. At the 0.01 significance level, is there a relationship between job pressure and age?

State the decision rule. Use 0.01 significance level. (Round your answer to 3 decimal places.)

H₀: Age and pressure are not related.

H₁: Age and pressure are related.

Compute the value of chi-square. (Round your answer to 3 decimal places.)

What is your decision regarding H₀?

Problem 6-5A (Part Level Submission)

You are provided with the following information for Najera Inc. for the month ended June 30, 2017. Najera uses the periodic method for inventory.

Calculate gross profit rate under each of the following methods. (1) LIFO. (2) FIFO. (3) Average-cost. (Round answers to 1 decimal place, e.g. 51.2%.)

Integrate the following values of y from x = 0 to x = 130 using (a) The midpoint rule using intervals of [0 10], [10 30], [30 70], and [70 130] (b) The trapezoid rule using the same intervals (c) Simpson’s rule using the same intervals

x y

0 6

5 12

10 18

20 30

30 42

50 36

70 24

100 18

130 6

Integrate the differential equation dydt = y from t = 0 to t = 1 in one step (i.e., with a t of 1) using the Euler method, the Improved Euler method, and the classical Runge-Kutta method, which is the analog of Simpson’s rule. Assume that the initial value of y is 1. Compare your answers to the correct answer, which is exp(1) = 2.7183. You can do all the calculations with an excel spread sheet. Alternatively, you can do all the calculations by hand.

X Company is considering replacing one of its machines in order to save operating costs. Operating costs with the current machine are $64,000 per year; operating costs with the new machine are expected to be $35,385 per year. The new machine will cost $154,000 and will last for five years, at which time it can be sold for $2,500. The current machine will also last for five more years but will not be worth anything at that time. It cost $41,000 four years ago, but its current disposal value is only $4,000.

A) Assuming a discount rate of 8%, what is the incremental net present value of replacing the current machine?

B) Assume the following two changes: 1) both machines will last for six more years, 2) the salvage value of the new machine after six years will be zero. If X Company replaces the current equipment, what is the approximate internal rate of return [enter your answer as .XX, so 1% would be .01]?

X Company is considering replacing one of its machines in order to save operating costs. Operating costs with the current machine are $60,000 per year; operating costs with the new machine are expected to be $32,310 per year. The new machine will cost $154,000 and will last for four years, at which time it can be sold for $1,000. The current machine will also last for four more years but will not be worth anything at that time. It cost $44,000 four years ago, but its current disposal value is only $4,000.

9. Assuming a discount rate of 8%, what is the incremental net present value of replacing the current machine?

10. Assume the following two changes: 1) both machines will last for six more years, 2) the salvage value of the new machine after six years will be zero. If X Company replaces the current equipment, what is the approximate internal rate of return? Tries 0/3