With double-digit annual percentage increases in the cost of health insurance, more and more workers are likely to lack health insurance coverage (USA Today, January 23, 2004). The following sample data provide a comparison of workers with and without health insurance coverage for small, medium, and large companies. For the purposes of this study, small companies are companies that have fewer than 100 employees. Medium companies have 100 to 999 employees, and large companies have 1000 or more employees. Sample data are reported for 50 employees of small companies, 75 employees of medium companies, and 100 employees of large companies.

1. Conduct a test of independence to determine whether employee health insurance coverage is independent of the size of the company. Use  = .05. Use Table 12.4.
   
   Compute the value of the  ² test statistic (to 2 decimals).
   
   
   The p value is Selectless than .005between .005 and .01between .01 and .025between .025 and .05between .05 and .10greater than .10Item 2
   
   What is your conclusion?
   SelectConclude health insurance coverage is not independent of the size of the companyCannot reject the assumption that health insurance coverage and size of the company are independentItem 3
   
2. The USA Today article indicated employees of small companies are more likely to lack health insurance coverage. Calculate the percentages of employees without health insurance based on company size (to the nearest whole number).
   

   Small	%
   Medium	%
   Large	%

   
   
   Based on the percentages calculated above, what can you conclude?

Q1. Shine Bright Housekeeping provides two types of housekeeping services, Basic and Gold.
It charges customers $30 for a unit of Basic service and $50 for a unit of Gold service. Its direct costs in providing each unit of service are:

Basic $9, Gold $15. All other costs of the business are fixed and total $7,350 per month.

In all the sub-parts of this part (i.e., part 3.1, 3.2, etc.), assume that Shine Bright always provides a constant mix of the two services, namely 3 units of Basic service for every 2 units of Gold service....

3.1 What is Shine Bright’s Contribution Margin Ratio (CMR)?

Contd.

2

3.2 How much Sales Revenue should Shine Bright generate monthly to report Net-Income-after-tax (NIAT) of $11,760? The income tax rate is 20%. Use the CMR concept.

3.3. What is Shine Bright’s Degree-of-Operating-Leverage (DOL) at the Sales Revenue computed in part 3.2 above?

3.4. Using the DOL concept to get your answer, what will be Shine Bright’s NIAT if the Sales Revenue falls 10% from the level in part 3.2 ?

4. Using B to stand for units of Basic service, and G to stand for units of Gold service, specify the equation whose solutions are the combinations of the amounts of the two services that would allow Shine Bright to break-even each month.

That is, specify the “break-even function” f (B, G) = where C is a constant.

Lapps Inc. makes a gift product that sells best during the holiday season. Retailers stock up in the fall, so Lapps's sales are largest in October and November and drop dramatically in December. The firm expects the following revenue pattern for the second half of this year ($000). The third quarter figures are actual results, while the fourth quarter is a projection. Jul Aug Sep Oct Nov Dec Revenue $5,500 $6,000 $7,500 $8,000 $9,500 $4,000 Historically, Lapps collects its receivables according to the following pattern. Months after sale 1 2 3 % collected 60% 30% 9% The firm offers a 2% prompt payment discount, which is taken by about half of the customers that pay in the first month. Lapps receives inventory one month in advance of sales. The cost of material is 40% of revenue. Invoices are paid 45 days after receipt of material. The firm uses temporary labor to meet its seasonal production needs, so payroll can be estimated at 35% of the current month's sales. Other expenses are a constant $1.8 million per month. A $.7 million tax payment is scheduled for November, and an expansion project will require cash of $.5 million in October and $.8 million in December. Lapps has a $6 million short-term loan outstanding at the end of September. Monthly interest is 1% of the previous month-end balance. Prepare Lapps's cash budget for the fourth quarter.

PLEASE SHOW EQUATIONS

Dudley Transport Company divides its operations into four divisions. A recent income statement for its West Division follows:

Required

By how much would companywide income increase or decrease if West Division is eliminated? Should West Division be eliminated?

Assume that West Division is able to increase its revenue to $324,000 by raising its prices. Determine the amount of the increase or decrease that would occur in companywide net income. Should West Division be eliminated if revenue were $324,000?

What is the minimum amount of revenue required to justify continuing the operation of West Division?

A: Income would INCREASE by _____?

B: Income would INCREASE by _____?

C: minimum amount of revenue _____?

A firm can produce orange juice in the US and ship it to Japan at a cost of $1.75/unit. They want to sell it with a 50% markup (50% higher than their cost), and the yen/US$ exchange rate is 111.11.

1) At what price would they sell it in Japan (in yen)?

2)What is their US$ profit?

Now suppose the $ appreciates from ¥/US$ 111.11 to ¥120/US$ prior to payment.

3) What is the new US$ revenue and profit?

4) How does it compare with what the company was expecting?

5) What might the company have done to protect itself?

Prepare the journal entries (omit explanations) for all transactions from January 01, 2016 through June 30, 2016, post all journal entries to the general ledger, and prepare an Unadjusted Trial Balance for the six months ending June 30, 2016.

1/1       The owner of the business contributed $10,000 cash and a truck worth $16,000 to the business in exchange for 26,000 shares of $1par common stock. This is the first ever transaction for the business. Use perpetual inventory.

1/31     Borrowed $50,000 on a note payable from the bank.

1/31     Paid January rent, $500

2/01     Purchased equipment for $10,000 cash.

2/15     Purchased 100 bags of lawn fertilizer for $2.00 per bag on account (this lawn fertilizer will be sold to customers to apply themselves)

2/01     Paid February rent, $500

3/01     Prepaid, March – December rent at $500 per month

3/01     Purchased 100 bags of weed preventive fertilizer for $8 per bag on account (this fertilizer will be sold to customers to apply themselves)

3/01     Paid amount owed on lawn fertilizer from 2/15 transaction

3/15     Sold 20 bags of weed preventive fertilizer for $15 per bag (cash)

3/15     Received $500 cash from customers for spring lawn services performed

3/15     Performed spring lawn service to customers on account $750

4/01     Collected $500 from customers on account from 3/15 transaction

4/14     Collected $250 from customers on account from 3/15 transaction

4/15     Sold 25 bags of weed preventive fertilizer for $15 per bag (cash)

4/15     Sold 15 bags of lawn fertilizer for $6 per bag (cash)

4/15     Paid for advertising campaign, $5,000 cash

5/01     Received payment for summer services in advance from 20 customers

            5 months (May – September) at $1000 each for a total of $100,000

5/31     Received payment for May’s lawn services provided from 5 customers, $5,500

5/31     Performed May lawn service for 5 customers on account to be received by 6/15, $5,500

5/31     Paid fuel expense of $1,000 for May

6/05     Paid wages to employees for May, $8000

6/15     Received payment from May’s credit customers, $5,500

6/15     Sold 20 bags of lawn fertilizer for $6 per bag (cash)

6/30     Received payment for June’s lawn service from 4 customers, $4,400

6/30     Performed June lawn service for 5 customers on account to be received by 7/15, $5,500

6/30     Purchased supplies on account, $1,000

6/30     Paid semi-annual payment on note from bank, $4,000 principal plus $2,000 interest expense for a total payment of $6,000

6/30     Paid fuel expense of $1,000 for May

The average number of customers visiting the science center was 800 per day last year and the populations standard deviation is 250 customers per day.

1. In a span of a month, i.e. 30 days, write out the distribution of the sample mean

2. What is the probability that the sample mean is over 275 customers per day in a month?

3. What is the probability that the sample mean is less than 275 customers per day in a month?

4. A good month means the average number of customers is more than the average of 95% of the other month. Determine the criteria of a good month.

Consider a study to relate birthweight (y) to the estriol level(x) of pregnant women. The data is below with 32 observations.

PLEASE SHOW ALL YOUR WORK:

1. Calculate the correlation coefficient r. :   

2. Estimate the equation of the regression line that best describes the relationship between birthweight and the estriol level of pregnant women (Assume that the dependent variable is birthweight). :

3. Is the coefficient(β) of birthweight significantly different than zero at significance

level 0.05? :

Work for the first variable, X:

2. Construct a frequency table, containing at least 5 classes, but no more than 8 classes. [2]

**Data goes up to 83**

3. Make the following graphs, using Stat Crunch.

1. histogram [2]

2. frequency polygon [2]

3. cumulative frequency polygon [2]

4. stem and leaf [2]

5. box plot [2]