SkyChefs, Inc., prepares in-flight meals for a number of major airlines. One of the company’s products is grilled salmon in dill sauce with baby new potatoes and spring vegetables. During the most recent week, the company prepared 5,600 of these meals using 2,700 direct labor-hours. The company paid its direct labor workers a total of $21,600 for this work, or $8.00 per hour. According to the standard cost card for this meal, it should require 0.50 direct labor-hours at a cost of $7.50 per hour. Required:

1. What is the standard labor-hours allowed (SH) to prepare 5,600 meals?

2. What is the standard labor cost allowed (SH × SR) to prepare 5,600 meals?

3. What is the labor spending variance?

4. What is the labor rate variance and the labor efficiency variance?

Once every weekend, I go out for breakfast – usually at Sweet Paris, Mess, or First Watch. However, my decision usually depends on where I ate in the prior week. Basically, my breakfast eating habits are a Markov process and I’ve summarized the transition matrix below.

Sweet Paris Mess First Watch

Sweet Paris 0.3 0.3 0.4

Mess 0.6 0.4   0

First Watch 0.3 0.7 0

Sweet Paris has a policy where you earn a free crepe after 16 visits – thus I might be interested in the 16th passage time – how long it would take me to visit 16 times and earn a free crepe.

As it turns out, I already have 15 visits. I only need one more to earn my free crepe!!! I.e., I’m interested in my first passage to Sweet Paris.

1. (a) If I most recently ate at Sweet Paris, determine the probability I will earn a free crepe in 1 week, 2 weeks, 3 weeks, and 4 weeks.

2. (b) If I most recently ate at Mess, determine the probability I will earn a free crepe in 1 week, 2 weeks, 3 weeks, and 4 weeks.

3. (c) If I most recently ate at First Watch, determine the probability I will earn a free crepe in 1 week, 2 weeks, 3 weeks, and 4 weeks.

a) Dr. Liu is learning how to juggle. He tosses a tennis ball (probably bad choice since it is so bouncy) up at 1.6 m/s at a height 1.6 m above the floor and attempts to use the other hand to catch the falling ball. The ball hit the floor at his feet. How long was Dr. Liu's tennis ball in the air (between tossing and landing)? Ignore air drag. He should probably practice tossing his juggling ball at the same height and the same speed before attempting to juggle. Hint: You can set the final position to be zero.

b) In a medieval castle siege reenactment, a castle defender threw down a "stone" (made of soft materials) with all his might, achieving an initial speed of 7 m/s downward. The castle was 7.5 m tall. How long will the attacker have before the "stone" hit the ground? You can assume the final position to be zero. The "stone" has a negligible amount of air drag. Hint: the "stone" has a downward initial velocity.

c) A careless painter dropped a brush (with paint!) from a scaffold outside a building he's supposed to paint. You were just recording a selfie video across the street and caught the falling brush in your video. You used your physics skills to figure out the paintbrush was falling at 6.5 m/s when it was just passing the top of a window that you estimated at 4.6 m above the ground. How long did it take the brush to fall from that height to the ground and make a colorful splash? You can assume the final position to be zero. The paintbrush has a negligible amount of air drag. Hint: the paintbrush has a downward initial velocity at the height you estimated.

J Bonita, Ltd. is a local coat retailer. The store’s accountant prepared the following income statement for the month ended January 31:

Bonita sells its coats for $250 each. Selling expenses consist of fixed costs plus a commission of $6.50 per coat. Administrative expenses consist of fixed costs plus a variable component equal to 5% of sales.

(a)

Prepare a contribution format income statement for January. (Round per unit cost to 2 decimal places, e.g. 52.75 and all other answers to 0 decimal places, e.g. 5,275.)

Based on an annual cost comparison, using an interest rate of 15%, determine the most economical method of replacing a wearing surface on a road. Method A has a first cost of $20000 a life of 10 years and an annual maintenance cost of $1000. Method B has a first cost of $30000 a life of 14 years and an annual maintenance cost of $800.

Armando has been laid off by Red Robin Restaurant due to falling demand during the COVID19 pandemic.

Group of answer choices

structural

not in labor force

seasonal

cyclical

frictional

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Question 80.8 pts

Linda is taking voluntary retirement from teaching and is looking for part-time work.

Group of answer choices

seasonal

cyclical

structural

frictional

not in labor force

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Question 90.8 pts

Soo Li, a homemaker of 20 years, is out looking for her first paid job.

Group of answer choices

frictional

cyclical

not in labor force

seasonal

structural

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Question 100.7 pts

Sarah has quit her job to stay home and raise her first child.

Group of answer choices

not in labor force

structural

seasonal

frictional

cyclical

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Question 110.7 pts

Isabel was laid off from her job at Apple Computer and the only work she could find was in fast food restaurants. She is not now looking for work.

Group of answer choices

structural

seasonal

frictional

cyclical

not in labor force

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Question 120.7 pts

The six year-old California drought reduced the demand for fruit processors and ski instructors.

Group of answer choices

not in labor force

cyclical

seasonal

structural

frictional

The Wall Street Journal reported that the age at first startup for 25% of entrepreneurs was 29 years of age or less and the age at first startup for 75% of entrepreneurs was 30 years of age or more. (a) Suppose a sample of 200 entrepreneurs will be taken to learn about the most important qualities of entrepreneurs. Show the sampling distribution of p where p is the sample proportion of entrepreneurs whose first startup was at 29 years of age or less. If required, round your answers to four decimal places. np = n(1-p) = E(p) = σ(p) = (b) Suppose a sample of 200 entrepreneurs will be taken to learn about the most important qualities of entrepreneurs. Show the sampling distribution of p where p is now the sample proportion of entrepreneurs whose first startup was at 30 years of age or more. If required, round your answers to four decimal places. np = n(1-p) = E(p) = σ(p) = (c) Are the standard errors of the sampling distributions different in parts (a) and (b)?

Chapter 8 Problem Session Homework

Questions:

1. Discuss some of the major benefits to be derived from budgeting.

2. What is meant by the term responsibility accounting?

3. Why is the sales forecast the starting point in budgeting?

Problems:

1.

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:

1. 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.

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

Sales for June totaled $300,000.

3. 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.
4. 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:

5. Gilden costs $0.80 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 $76,000.

Required:

1. Calculate the estimated sales, by month and in total, for the third quarter.

2. Calculate the expected cash collections, by month and in total, for the third quarter.

3. Calculate the estimated quantity of beach umbrellas that need to be produced in July, August, September, and October.

4. Calculate the quantity of Gilden (in feet) that needs to be purchased by month and in total, for the third quarter.

5. Calculate the cost of the raw material (Gilden) purchases by month and in total, for the third quarter.

6. Calculate the expected cash disbursements for raw material (Gilden) purchases, by month and in total, for the third quarter.

2.

You have just been hired as a new management trainee by Earrings Unlimited, a distributor of earrings to various retail outlets located in shopping malls across the country. In the past, the company has done very little in the way of budgeting and at certain times of the year has experienced a shortage of cash. Since you are well trained in budgeting, you have decided to prepare a master budget for the upcoming second quarter. To this end, you have worked with accounting and other areas to gather the information assembled below.

The company sells many styles of earrings, but all are sold for the same price—$10 per pair. Actual sales of earrings for the last three months and budgeted sales for the next six months follow (in pairs of earrings):

The concentration of sales before and during May is due to Mother’s Day. Sufficient inventory should be on hand at the end of each month to supply 40% of the earrings sold in the following month.

Suppliers are paid $4 for a pair of earrings. One-half of a month’s purchases is paid for in the month of purchase; the other half is paid for in the following month. All sales are on credit. Only 20% of a month’s sales are collected in the month of sale. An additional 70% is collected in the following month, and the remaining 10% is collected in the second month following sale. Bad debts have been negligible.

Monthly operating expenses for the company are given below:

Insurance is paid on an annual basis, in November of each year.

The company plans to purchase $16,000 in new equipment during May and $40,000 in new equipment during June; both purchases will be for cash. The company declares dividends of $15,000 each quarter, payable in the first month of the following quarter.

The company’s balance sheet as of March 31 is given below:

The company maintains a minimum cash balance of $50,000. All borrowing is done at the beginning of a month; any repayments are made at the end of a month.

The company has an agreement with a bank that allows the company to borrow in increments of $1,000 at the beginning of each month. The interest rate on these loans is 1% per month and for simplicity we will assume that interest is not compounded. At the end of the quarter, the company would pay the bank all of the accumulated interest on the loan and as much of the loan as possible (in increments of $1,000), while still retaining at least $50,000 in cash.

Required:

Prepare a master budget for the three-month period ending June 30. Include the following detailed schedules:

1. a. A sales budget, by month and in total.

    b. A schedule of expected cash collections, by month and in total.

    c. A merchandise purchases budget in units and in dollars. Show the budget by month and in total.

    d. A schedule of expected cash disbursements for merchandise purchases, by month and in total.

2. A cash budget. Show the budget by month and in total. Determine any borrowing that would be needed to maintain the minimum cash balance of $50,000.

3. A budgeted income statement for the three-month period ending June 30. Use the contribution approach.

4. A budgeted balance sheet as of June 30.

Which of the following represents the expenditure multiplier?

A. it is the factor by which a change in autonomous spending is multiplied to obtain the change in income

B. It is the ratio of income to consumption

C. It is the factor by which income is multiplied to obtain the change in aggregate spending

D. It is the ratio of the change in income divided by the change in consumption

Explain the effect of an increase in government spending on the on the equilibrium output and inflation in the AD-AS model. Carefully distinguish between the short-run and the long-run equilibrium. Would this increase in government spending affect the potential output? Why/Why not? (Need a brief answer of around 300-400 words)