Give examples of specific companies that you would logically think should use each of the following inventory valuation methods (at least one company per method):

-Specific identification

-First-in, First-out (FIFO)

-Last-in, First-out (LIFO)

-Weighted average cost

Now identify reasons that a company may not use the most obvious logical cost flow valuation method, hence, the reason these are considered cost flow assumptions.

The records of ABC Company showed the following:

The physical inventory reveals 15,000 units on hand on December 31.
Compute the cost of ending inventory and cost of sales using:

Resources must be used in the production process to produce goods and services. Resources are also called factors of production. Resources are traded in the market where the equilibrium quantity and price of the resources are determined. Most markets are competitive, that is, there are many buyers and sellers. Resource demand or factor demand is a derived demand. Where is this demand derived from? Give an example to illustrate this relationship.

Periodic Inventory by Three Methods

The beginning inventory for Dunne Co. and data on purchases and sales for a three-month period are as follows:

Required:

1. Determine the inventory on June 30 and the cost of goods sold for the three-month period, using the first-in, first-out method and the periodic inventory system. Round the weighted average unit cost to the nearest cent.

2. Determine the inventory on June 30 and the cost of goods sold for the three-month period, using the last-in, first-out method and the periodic inventory system.

3. Determine the inventory on June 30 and the cost of goods sold for the three-month period, using the weighted average cost method and the periodic inventory system.

Note: Round the weighted average unit cost to the nearest dollar and final answers to the nearest dollar.

4. Compare the gross profit and June 30 inventories using the following column headings. Enter all amounts as positive numbers.

1. To economists, which of the following is true of pollution?

A. It is an externality.

B. It is always produced by third parties.

C. It is never caused by the consumers of the good, only by the producers.

D. It is never caused by the producers of the good, only by the consumers.

2.The free-rider problem is most likely to occur in which of the following cases?

A. A lighthouse

B. Buying apples at a farmers’ market

C. Visits to a local theme park

D. Visits to the emergency room

3. The term exclusion refers to which of the following?

A. The likelihood that the government may exclude the private sector from the production of certain goods

B. The possibility that you may receive benefits without having paid for them

C. The condition where you can’t consume a good if you don’t pay for it

D. The condition where your consumption of a good removes that good from someone else

4. Which of the following is a basic difference between public goods and private goods?

A. A private good is an internal good.

B. A public good must have no cost.

C. Public goods have the property of exclusion.

D. Private goods have the property of exclusion.

Rocky Ltd is a small business based in Napier, it sells one product which it manufacturers itself. It is currently in the process of establishing the fourth-quarter budget for 2015. Mark Leewood, the production manager has only been working for the company for a month, and is a little bit worried about aligning the production processes. He has asked for your help and provided you with the following information:

• The product sells for $325 per unit.
• Estimated sales volume in units for the next six months is:

• Rocky Ltd’s policy is to maintain ending finished goods inventory each month at a level equal to 40% of the next month’s budgeted sales.
• To make one unit of finished product, 5 kilos of direct materials are required.
• Rocky Ltd’s policy is to have enough materials on hand at the end of the month to equal 30% of next month’s usage.
• The cost per kilogram of material is $22.50.
• The product’s contribution margin is $250.

1. Prepare a production budget for Mark Leewood, in units for the last quarter of 2015.
2. Prepare a materials purchases budget for Mark, in kilograms for October and November 2015.
3. What is the cost of purchases in October?
4. Why is it important in a manufacturing environment to prepare a production and purchases budget? Answer with reference to the planning and control cycle.

A trusted employee of Wilderness Tours was caught in the act of

     embezzling funds. He confessed to earlier embezzlements, but

     retracted the confession on the advice of his attorney. Over the

     course of the most recent quarter, it has been determined that

     $20,000 was embezzled.

     Wilderness Tours has suffered adverse publicity in the recent past

     because of serious injury to five tourists that occurred during a

     two-week "Winter Wilds Adventure" tour. The company has therefore

     decided to avoid publicity and has agreed to drop all charges

     against the embezzling employee. In return, the employee has agreed

     to a notation of "Terminated——Not to be Rehired" to be appended to

     his personnel file.

     Required:      1. Who are the stakeholders in the decision not to prosecute?

     2. Was it ethical for the company to decide not to prosecute?

        Explain.

You are the head media planner for a small chain of upscale furniture outlets in a top-50 market that concentrates most of its advertising in the Sunday supplement of the local newspaper. The client also schedules display ads in the daily editions for special sales. Six months ago a new, high style metropolitan magazine approached you about advertising for your client. You deferred a decision by saying you’d see what reader acceptance would be. Now the magazine has shown some steady increases (its circulation is now about one-quarter of the newspapers). If you were to include the magazine on the ad schedule, you’d have to reduce the newspaper media somewhat. What would be your recommendation to the furniture store?

Briefly describe the aims of the Surrealists, as defined by Breton in the first “Surrealist Manifesto.” Which of the Surrealist artists “speaks” to your own subconscious life most directly? Why and how so?

Biarritz Corp. is growing quickly. Dividends are expected to grow at a rate of 25 percent for the next three years, with the growth rate falling off to a constant 4.5 percent thereafter. If the required return is 10.5 percent and the company just paid a dividend of $2.85, what is the current share price? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)