A company studied the number of lost-time accidents occurring at its Brownsville, Texas, plant. Historical records show that of the employees suffered lost-time accidents last year. Management believes that a special safety program will reduce such accidents to during the current year. In addition, it estimates that of employees who had lost-time accidents last year will experience a lost-time accident during the current year.
a. What percentage of the employee will experience a lost-time accident in both years (to 1 decimal)?
b. What percentage of the employee will experience a lost-time accident over the two-year period (to 1 decimal)?
In: Statistics and Probability
Find the measures of center for following. Data Frequency 30 - 34 11 35 - 39 18 40 - 44 13 45 - 49 9 50 - 54 8 55 - 59 5 60 - 64 3 65 - 69 0 70 - 74 2
In: Statistics and Probability
Doaktown Products manufactures fishing equipment for recreational uses. The Miramichi plant produces the company’s two versions of a special reel used for river fishing. The two models are the M-008, a basic reel, and the M-123, a new and improved version. Cost accountants at company headquarters have prepared costs for the two reels for the most recent period. The plant manager is concerned. The cost report does not coincide with her intuition about the relative costs of the two models. She has asked you to review the cost accounting and help her prepare a response to headquarters.
Manufacturing overhead is currently assigned to products based on their direct labor costs. For the most recent month, manufacturing overhead was $320,800. During that time, the company produced 12,800 units of the M-008 and 2,900 units of the M-123. The direct costs of production were as follows:
| M-008 | M-123 | Total | ||||
| Direct materials | $ | 102,400 | $ | 116,000 | $ | 218,400 |
| Direct labor | 102,400 | 58,000 | 160,400 | |||
Management determined that overhead costs are caused by three cost drivers. These drivers and their costs for last year were as follows:
| Activity Level | |||||||||
| Cost Driver | Costs | M-008 | M-123 | Total | |||||
| Number of machine-hours | $ | 148,800 | 8,000 | 2,000 | 10,000 | ||||
| Number of production runs | 80,000 | 10 | 30 | 40 | |||||
| Number of inspections | 92,000 | 15 | 35 | 50 | |||||
| Total overhead | $ | 320,800 | |||||||
Required:
a. How much overhead will be assigned to each product if these three cost drivers are used to allocate overhead? What is the total cost per unit produced for each product? (Round your intermediate calculations and final answers to 2 decimal places.)
b. How much of the overhead will be assigned to each product if direct labor cost is used to allocate overhead? What is the total cost per unit produced for each product? (Round "Total unit cost" to 2 decimal places.)
In: Accounting
Doaktown Products manufactures fishing equipment for recreational uses. The Miramichi plant produces the company’s two versions of a special reel used for river fishing. The two models are the M-008, a basic reel, and the M-123, a new and improved version. Cost accountants at company headquarters have prepared costs for the two reels for the most recent period. The plant manager is concerned. The cost report does not coincide with her intuition about the relative costs of the two models. She has asked you to review the cost accounting and help her prepare a response to headquarters.
Manufacturing overhead is currently assigned to products based on their direct labor costs. For the most recent month, manufacturing overhead was $344,800. During that time, the company produced 14,800 units of the M-008 and 2,700 units of the M-123. The direct costs of production were as follows.
| M-008 | M-123 | Total | ||||
| Direct materials | $ | 118,400 | $ | 108,000 | $ | 226,400 |
| Direct labor | 118,400 | 54,000 | 172,400 | |||
Management determined that overhead costs are caused by three cost drivers. These drivers and their costs for last year were as follows.
| Activity Level | |||||||||
| Cost Driver | Costs | M-008 | M-123 | Total | |||||
| Number of machine-hours | $ | 179,800 | 8,000 | 2,000 | 10,000 | ||||
| Number of production runs | 70,000 | 20 | 20 | 40 | |||||
| Number of inspections | 95,000 | 25 | 25 | 50 | |||||
| Total overhead | $ | 344,800 | |||||||
Required:
a. How much overhead will be assigned to each product if these three cost drivers are used to allocate overhead? What is the total cost per unit produced for each product?
M-008
Total overhead?
Total unit cost- ?
M-123
Total overhead- ?
Total unit cost- ?
b. How much of the overhead will be assigned to each product if direct labor cost is used to allocate overhead? What is the total cost per unit produced for each product?
M-008
Total overhead- ?
Total unit cost- ?
M-123
Total overhead- ?
Total unit cost- ?
In: Accounting
Doaktown Products manufactures fishing equipment for recreational uses. The Miramichi plant produces the company’s two versions of a special reel used for river fishing. The two models are the M-008, a basic reel, and the M-123, a new and improved version. Cost accountants at company headquarters have prepared costs for the two reels for the most recent period. The plant manager is concerned. The cost report does not coincide with her intuition about the relative costs of the two models. She has asked you to review the cost accounting and help her prepare a response to headquarters.
Manufacturing overhead is currently assigned to products based on their direct labor costs. For the most recent month, manufacturing overhead was $244,000. During that time, the company produced 10,000 units of the M-008 and 2,100 units of the M-123. The direct costs of production were as follows.
| M-008 | M-123 | Total | ||||
| Direct materials | $ | 80,000 | $ | 84,000 | $ | 164,000 |
| Direct labor | 80,000 | 42,000 | 122,000 | |||
Management determined that overhead costs are caused by three cost drivers. These drivers and their costs for last year were as follows.
| Activity Level | |||||||||
| Cost Driver | Costs | M-008 | M-123 | Total | |||||
| Number of machine-hours | $ | 64,000 | 8,000 | 2,000 | 10,000 | ||||
| Number of production runs | 80,000 | 20 | 20 | 40 | |||||
| Number of inspections | 100,000 | 30 | 20 | 50 | |||||
| Total overhead | $ | 244,000 | |||||||
Required:
a. How much overhead will be assigned to each product if these three cost drivers are used to allocate overhead? What is the total cost per unit produced for each product?
b. How much of the overhead will be assigned to each product if direct labor cost is used to allocate overhead? What is the total cost per unit produced for each product?
a. M-008 M-123
Total Overhead
Total Unit Cost
b. M-008 M-123
Total Overhead
Total Unit Cost
In: Accounting
Starbucks has a large, global supply chain that must efficiently supply over 17,000 stores. Although the stores might appear to be very similar, they are actually very different. Depending on the location of the store, its size, and the profile of the customers served, Starbucks management configures the store offerings to take maximum advantage of the space available and customer preferences.
Starbucks’ actual distribution system is much more complex, but for the purpose of our exercise let’s focus on a single item that is currently distributed through five distribution centers in the United States. Our item is a logo branded coffeemaker that is sold at some of the larger retail stores. The coffeemaker has been a steady seller over the years due to its reliability and rugged construction. Starbucks does not consider this a seasonal product, but there is some variability in demand. Demand for the product over the past 18 weeks is shown in the following table. (week −1 is the week before week 1 in the table, −2 is two weeks before week 1, etc.).
Management would like you to experiment with some forecasting models to determine what should be used in a new system to be implemented. The new system is programmed to use one of two forecasting models: simple moving average or exponential smoothing.
| WEEK | −5 | −4 | −3 | −2 | −1 | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 | 13 |
| Atlanta | 35 | 34 | 33 | 58 | 32 | 32 | 46 | 35 | 33 | 54 | 30 | 20 | 58 | 46 | 35 | 26 | 57 | 42 |
| Boston | 58 | 29 | 49 | 45 | 33 | 34 | 33 | 45 | 42 | 46 | 49 | 55 | 21 | 64 | 45 | 33 | 43 | 53 |
| Chicago | 53 | 24 | 62 | 40 | 40 | 45 | 33 | 26 | 50 | 47 | 65 | 65 | 30 | 25 | 95 | 34 | 44 | 48 |
| Dallas | 36 | 30 | 34 | 55 | 40 | 28 | 28 | 35 | 38 | 47 | 60 | 68 | 62 | 45 | 40 | 35 | 46 | 43 |
| LA | 42 | 42 | 46 | 38 | 36 | 36 | 42 | 44 | 46 | 46 | 66 | 42 | 35 | 39 | 42 | 45 | 50 | 50 |
| Total | 224 | 159 | 224 | 236 | 181 | 175 | 182 | 185 | 209 | 240 | 270 | 250 | 206 | 219 | 257 | 173 | 240 | 236 |
a. Consider using a simple moving average model. Experiment with models using five weeks’ and three weeks’ past data. (Round your answers to 2 decimal places.)
3-week MA
| Week | ATL | BOS | CHI | DAL | LA | Total |
| 1 | ||||||
| 2 | ||||||
| 3 | ||||||
| 4 | ||||||
| 5 | ||||||
| 6 | ||||||
| 7 | ||||||
| 8 | ||||||
| 9 | ||||||
| 10 | ||||||
| 11 | ||||||
| 12 | ||||||
| 13 | ||||||
5-week MA
| Week | ATL | BOS | CHI | DAL | LA | Total |
| 1 | ||||||
| 2 | ||||||
| 3 | ||||||
| 4 | ||||||
| 5 | ||||||
| 6 | ||||||
| 7 | ||||||
| 8 | ||||||
| 9 | ||||||
| 10 | ||||||
| 11 | ||||||
| 12 | ||||||
| 13 | ||||||
b. Evaluate the forecasts that would have been
made over the 13 weeks using the overall (at the end of the 13
weeks) mean absolute deviation, mean absolute percent error, and
tracking signal as criteria. (Round your answers to 2
decimal places. Negative values should be indicated by a minus
sign.)
| ATL | BOS | CHI | DAL | LA | Avg of DCs | ||
| 3-week MA | MAD | ||||||
| MAPE | |||||||
| TS | |||||||
| 5-week MA | MAD | ||||||
| MAPE | |||||||
| TS |
In: Accounting
You are making an investment where you have an exclusive patent for production of Barkelgassers (BGs) for a period of six years.
The investment will cost $25 million and production/revenue will not commence until year 2. Your production costs are $65 per BG and the marketing manager believes you will be able to sell 200,000 units at $100 per unit until the patent runs out in year 6 (five years’ time).
After that the marketing manager is unsure what the price will be as competitors will come into the market.
The real cost of capital is 9%, you assume the technology will not change and capital and production costs will remain the same. There are no taxes and BG production facilities will last for 12 years and will have no salvage value.
What is the NPV of the project?
Hint: You need to work out what the price will be per Barkelgassers when the competitors come into the market when the patent runs in year 6.
In: Finance
Suppose you have access to the following bond data.
One year zero coupon bond, priced at 98, face value 100. Two year coupon bond, priced at 97. Annual coupons are $2, delivered at end of year. Three year coupon bond, priced at 96. Annual coupons are $3, delivered at the end of the year.
1. What is the coupon rate on the two-year coupon bond?
2. What is the current yield on the three-year coupon bond?
3. What is the yield-to-maturity of the three-year coupon bond?
4. Extract one year, two year, and three year spot rates from the bond data.
5. Using the spot rates, calculate the present value of $35 received in one year and $35 received in two years.
6. Using the spot rates, calculate the rate I should be able to lock in for a one year loan starting one year from now. Suppose now that you are a life insurance company projecting to pay benefits of $40 per year for the next 10 years to your policyholders. You are operating in an economy where the term structure of interest rates is completely flat at 4%, so that all spot rates are 4%.
7. Calculate the present value of your benefit obligations.
8. Calculate the duration of your benefit obligations.
9. Given your calculation above, if you were choosing a single type of bond from 1-year, 2-year, 3-year, 4-year, 5-year, 6-year, 7-year, 8-year, 9-year, and 10-year zero coupon bonds, which would serve you best from the perspective of asset-liability matching? In other words, if interest rates were to change, which bond’s price would move most closely with the present value of your obligations?
10. Calculate the percentage change in the value of your obligations if the interest rate were to drop from 4.0% to 3.9%.
11. Calculate the percentage change in the value of the bond you identified in (9) if the interest rate were to drop from 4.0% to 3.9%.
12. Calculate the percentage change in the value of a 1-year zero coupon bond if the interest rate were to drop from 4.0% to 3.9%.
13. (EXTRA CREDIT) If you were allowed to invest in more than one type of bond, could you provide a better match to your benefit obligations than you found in (9)? Propose a mix of bonds that would provide a better match, and verify that the percentage change in the value of the mix would more closely match the percentage change in obligation value in the interest rate scenario used in (10) through (12).
In: Finance
Question 3
(a) Discuss probability, independence and mutual exclusivity,
giving examples to illustrate your answer. (6)
(b) i. How many ways are there of choosing a committee of three
people from a club of ten? (2)
ii. How many ways are there of selecting from those three people a
president, secretary and treasurer? (2)
iii. Illustrate your answer to the second part of the question with
a tree diagram. (2)
Question 4
An ice-cream vendor on the beachfront knows from long experience
that the average rate of ice-cream sales is 12 per hour. If, with
two hours to go at work, she finds herself with only five
ice-creams in stock, what are the probabilities that
(a) she runs out before the end of the day; (4)
(b) she sells exactly what she has in stock by the end of the day
without any excess demand after she sells the last one; and
(3)
(c) she doesn't sell any?
In: Statistics and Probability
Taxes are costs, and, therefore, changes in tax rates can affect consumer prices, project lives, and the value of existing firms. Evaluate the change in taxation on the valuation of the following project:
|
0 |
1 |
2 |
3 |
|
|
1.Initial investment |
100 |
|||
|
2.revenues |
100 |
100 |
100 |
|
|
3.cash operating costs |
50 |
50 |
50 |
|
|
4.tax depreciation |
33.33 |
33.33 |
33.33 |
|
|
5.income pretax |
16.67 |
16.67 |
16.67 |
|
|
6.tax at 40% |
6.67 |
6.67 |
6.67 |
|
|
7.net income |
10 |
10 |
10 |
|
|
8. after -tax salvage |
15 |
|||
|
9. cash flow (7+8+4-1) |
-100 |
43.33 |
43.33 |
58.33 |
|
NPV at 20%=0 |
Assumptions: Tax depreciation is straight-line over three years. Pre-tax salvage value is 25 in year 3 and 50 if the asset is scrapped in year 2. Tax on salvage value is 40% of the difference between salvage value and book value of the investment. The cost of capital is 20%.
Please show the detailed process
In: Finance