Tess Company's inventory records show the following data for the month of May: Units Unit Cost Inventory, May 1 200 $2.00 Purchases: May 8 200 3.00 May 15 100 4.00 The company uses a periodic inventory system. A physical inventory on May 30 shows 150 units on hand. Assuming FIFO (First-In-First-Out) inventory costing, calculate the cost of goods sold. a. $1,100 b. $850 c. $700 d. $980

Use EXCEL (show Excel functions) to determine the following:

1. Ty bought a new car for $25,000. He put $2,000 down and financed the rest with the dealer who had a special offer of 2% interest for 60 monthly payments. How much will Ty pay each month?

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2. Twins Taylor and Tanner both received $1,000 from their grandmother for their birthday. She told them they had to save it for 5 years. Taylor found an account paying 4.5% with monthly compounding. Tanner elected an account paying 5% with annual compounding. Who will have more at the end of the five years?

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3. Piper has $300,000 for her retirement. She is considering investing in a 20-year, 7% annuity and is trying to determine whether she should take the payments quarterly or monthly. Under which method would she get the most money each year?

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4. Twins Kate and Allie will be going to college in 15 years. Their parents have decided that Dad will start a savings fund for Kate. He will deposit $2,000 into an account the first of each year. That account earns 7% and interest is compounded annually. Their mother will also deposit $2,000 into an account for Allie, but she is going to make those deposits at the end of each quarter and the account pays 7.5% compounded quarterly. Who will have more in her college fund?

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6. Examples of price discrimination

Complete the following table by indicating whether or not each scenario is an example of price discrimination.

Hint: To determine whether a scenario is an example of price discrimination, think about whether the market can be segmented into two groups that pay different prices for the same good.

Publisher is interested in the effects of sales of college texts that include more than 100 data files. The Publisher plans to produce 20 texts in the business area and randomly chooses 10 to have more than 100 fileas. The remaining 10 are produced with at most 100 files. For those with mıre than 100, first-year sales averaged 9254 and the sampel standard deviation was 2107. Fort he boks with at most 100 files, average first-year sales were 8167, and sample standard deviation was 1681. Assuming the two population distributions are normal, test the null hypothesis that the population variances are equal against the alternative that the population variance is higher for books with more than 100 files.

For this problem clearly state the

a) null and alternative hypothesis,

b) decision rule and

c) conclusion.

1. When interest rates are low, people are more likely to spend (or borrow) and less likely to save. This is consistent with the slopes of both the demand and supply in the loanable funds market.

2. The loanable funds market is a fundamental piece of a country's ability to grow and develop.

3. Which of the following would SHIFT the demand for loanable funds to the RIGHT (i.e. INCREASE). Select all that apply.

4. Match each item with the corresponding statement

5. Which of the following is related to (or occurs during) crowding out?

6. When the supply of loanable funds increases, the result is an increase in the real interest rates and a decrease in the number of loans granted.

7. When the demand for loanable funds increases, the result is an increase in both the real interest rate and the quantity of loans made.

8. Which of the following would cause the Supply of Loanable funds to shift left (decrease)?

9. Match the function of money with its definition.

Evaluation and testing of controls at Hales Ltd

Tyrone has provided a narrative of controls over inventory at Hales Ltd and would like you to provide some advice on making the preliminary control risk assessment. Hales is a distributor of haircare products, including shampoos, conditioners and styling products throughout Australia. Hales uses an on-line ordering system. Hales does not manufacture any goods in house, instead, an inventory of raw materials is kept, with manufacturing being outsourced to other companies. Hales has around 35 suppliers and 15 manufacturers. These companies have proven to be reliable in the past. Tyrone has made the following notes about three particular elements of the inventory system.

Purchase of raw materials

Purchase orders are generated by the computer when the inventory level of a particular material falls below 75% of what was used in the previous month. Purchase orders include the date, the suppliers name and the raw material required. Three copies of the purchase order are created. The first copy goes to the warehouse where it is used to enable the following up of overdue orders. The second copy is filed by the accounts clerk by order of date and the third copy goes to the supplier. Upon receipt of materials, barcodes on the delivery packages are scanned into the computer system. A two part receiving report is then generated. The first part is matched to the purchase order by the warehouse manager. The second is sent to the accounts clerk who files it. If the scanning of barcodes does not match data on the master file then the process is stopped.

Procedures for finished goods

When finished goods fall below 65% of the previous months sales, production orders are triggered. Production orders include a date, the manufacturers name, the raw materials needed and the volume of finished goods required. Two copies of the production order are generated. The first copy is sent to the raw materials warehouse where it is used as a picking slip by the warehouse staff. It is then included with materials which are sent to the manufacturer. The second copy is filed by the production manager by order of date. When finished goods arrive at Hales, barcodes on the delivery packets are scanned. A two part receiving report is generated, with the first copy being matched to the production order by the production manager and the second copy being filed by the accounts clerk. As with materials purchases, if the scanning of barcodes does not match the codes on the master file then the process is stopped.

Changes to the master file

The inventory master file contains information on the volumes of inventory on hand including barcode information and locations within the warehouse. The master file also has details of approved suppliers and manufacturers. Orders can only be made to suppliers and manufacturers on the master file. Changes to the master file can be made by the production manager. This applies to both raw materials and finished goods. To make changes the production manager completes an amendment form which is then kept as a record of any changes made.

Other information

There are separate warehouses, staff and procedures in place for the raw materials and finished goods. The selection of suppliers of raw materials and manufacturers is done automatically by the computer based on the latest price as per the last invoice and delivery time. Password access to the computer permits the following:

• Raw materials store staff have access to purchase order printing and goods received notes printing for materials.

• Finished goods store staff have access to goods received notes printing for finished goods.

• The production manager has access to production order printing and master file changes.

• The acounts clerk has access to master file changes.

Question 4

In relation to Hales Ltd:

• The weaknesses in the internal controls for each of the three aspects of the inventory system identified (raw materials, finished goods and changes to the master file).

• An assessment of the implications of each of the weaknesses you have identified.

• Three tests of control JDM’s IT audit division could perform to assist Tyrone with verifying the effectiveness of the internal controls (assuming that JDM will be performing tests of control).

• Two Computer Assisted Audit Techniques (CAATs) that Tyrone could request the IT auditors run to assist him in testing the valuation of inventory.

Jackie notices everyone wearing Converse sneakers on the first day of school. Ever the fashionista, this will likely affect:

Multiple Choice

• Jackie's income, as she now needs to buy Converse and will have less to spend on other goods.

• Jackie's preferences for shoes, since she feels as though she needs them now.

• Jackie's expectations of future prices, since the price of Converse will likely go up because they're getting so popular.

• the prices of related goods, since other shoes will be less popular and cost less now.

In its first month of operations, Literacy for the Illiterate opened a new bookstore and bought merchandise in the following order: (1) 340 units at $9 on January 1, (2) 630 units at $10 on January 8, and (3) 930 units at $12 on January 29. Assume 1,170 units are on hand at the end of the month, calculate the cost of goods available for sale, ending inventory, and cost of goods sold under the weighted average cost flow assumptions. Assume a periodic inventory system is used. (Round "Cost per Unit" to 2 decimal places.)

1. Shamokin Manufacturing produces two products, Big and Bigger. Shamokin expects to sell 10,000 units of product Bigger and to have an inventory of 2,000 units of Bigger on hand at the end of the period. Currently, Shamokin has 800 units of Bigger on hand. Bigger requires two labour operations, molding and polishing. Each unit of Bigger requires one hour of molding and two hours of polishing. The direct labour rate for molding is $20 per molding hour and the direct labour rate for polishing is $25 per polishing hour. The expected number of hours of direct labour for Bigger is

Select one:

a. 11,200 hours of molding; 22,400 hours of polishing.

b. 22,400 hours of molding; 11,200 hours of polishing.

c. 8,800 hours of molding; 17,600 hours of polishing.

d. 10,000 hours of molding; 20,000 hours of polishing.

e. 17,600 hours of molding; 8,800 hours of polishing.

2.

Daniel Inc. expects to sell 6,000 ceramic vases for $20 each in 2018. Direct materials costs are $2, direct manufacturing labour is $10, and manufacturing overhead is $3 per vase. Each vase requires 0.5 kilograms (kg) of material which is all added at the start of production. The units in work-in-process beginning and ending inventory were half complete as to direct labour and manufacturing overhead costs; the units in beginning inventory are completed before new units are started. Each vase requires one hour of direct labour, and manufacturing overhead is allocated based on direct labour hours. The following inventory levels are expected to apply to 2018:

a) On the 2018 budgeted income statement, what amount will be reported for gross margin?

Select one:

a. $122,000

b. $48,000

c. $30,000

d. $90,000

e. $120,000

b)

How many ceramic vases need to be produced in 2018?

Select one:

a. 5,900 vases

b. 6,000 vases

c. 6,300 vases

d. 6,100 vases

e. 7,000 vases

3.

Capable Inc. expects to sell 35,000 athletic uniforms for $80 each in 2019. Direct materials costs are $20, direct manufacturing labour is $8, and manufacturing overhead is $6 for each uniform. Each uniform requires 2.0 square metres (sq. m.) of material which is all added at the start of production. The following inventory levels are expected to apply to 2019:

a) What is the amount budgeted for cost of goods manufactured in 2019?

Select one:

a. $1,292,000

b. $1,054,000

c. $1,088,000

d. $986,000

e. $1,020,000

b)

What is the amount budgeted for cost of goods sold in 2019?

Select one:

a. $980,000

b. $840,000

c. $1,020,000.

d. $1,190,000.

e. $1,156,000.

4. Tripp Company sells three products with the following seasonal sales pattern:

                                         Products

  Quarter            X                Y                Z

       1                  40%         30%          10%

       2                  30%          20%          40%

       3                  20%          20%          40%

       4                  10%          30%          10%

The annual sales budget shows forecasts for the different products and their expected selling price per unit as follows:

Product           Units          Selling Price

      X                 40,000                  $ 3

      Y                 100,000              $12

      Z                 50,000                  $ 5

Required:

Prepare a revenue budget in dollars for each quarter. Present each quarter in a separate column and add a column to show total year sales.