Victory Company uses weighted-average process costing to account for its production costs. Conversion cost is added evenly throughout the process. Direct materials are added at the beginning of the first process. During November, the first process transferred 775,000 units of product to the second process. Additional information for the first process follows.

At the end of November, work in process inventory consists of 209,000 units that are 40% complete with respect to conversion. Beginning work in process inventory had $447,720 of direct materials and $128,790 of conversion cost. The direct material cost added in November is $2,996,280, and the conversion cost added is $2,447,010. Beginning work in process consisted of 70,000 units that were 100% complete with respect to direct materials and 80% complete with respect to conversion. Of the units completed, 70,000 were from beginning work in process and 705,000 units were started and completed during the period.

Required:
For the first process:
1. Determine the equivalent units of production with respect to direct materials and conversion.

2. Compute both the direct material cost and the conversion cost per equivalent unit.

3. Compute the direct material cost and the conversion cost assigned to units completed and transferred out and ending work in process inventory. (Round "Cost per EUP" to 2 decimal places.)

A bank teller can handle 40 customers an hour and customers arrive every six minutes. What is the average time a customer spends waiting in line?

a. 15 seconds b. 0.40 minutes c. 1.25 minutes d. 30 seconds

Customers arrive at a bakery at an average rate of 18 per hour on week day mornings. Each clerk can serve a customer in an average of three minutes. How long does each customer wait in the system?

a. 1 hour b. 0.33 hour c.0.45 hour d. 0.5 hour e. 1.5 hour

Students arrive at a class registration booth at the rate of 4 per hour. The administrators serve students in a first-come, first-serve priority with the average service time of 10 minutes. What is the mean number of students in the system?

a. 1.0 b. 1.33 c. 0.67 d. 2. 0 e. 15

Customers arrive at an ice cream store at the rate of 15 per hour. The owner attempts to serve in a first come, first-serve priority. The mean time to serve a customer is 3 minutes. Whatis the probability of walking into the store and not having to wait?

a. 75% b. 100% c. 133% d. 25% e. 50%

If demand is price inelastic, a decrease in price will cause a

     a. larger percentage increase in quantity demanded than the percentage decrease in price,

         thereby decreasing total revenue.

     b. smaller percentage decrease in quantity demanded than the percentage decrease in price,

         thereby decreasing total revenue.

     c. smaller percentage decrease in quantity demanded than the percentage decrease in price,

         thereby increasing total revenue.

     d. larger percentage decrease in quantity demanded than the percentage decrease in price,

         thereby decreasing total revenue.

      e.none of these choices are correct

.          Suppose that there is a recession and you observe that the market price of new cars decreases and

             the market price of used cars increases. This observation is consistent with:

1. new cars being a normal good
2. used cars being an inferior good
3. new cars being an inferior good and used cars being a normal good
4. new cars being a normal good and used cars being an inferior good

8.         Suppose that builders of new single family homes and prospective first time buyers of single

            family homes believe that housing prices will fall in the future. This would lead to:

1. market price to rise and quantity to be ambiguous
2. market price to fall and quantity to be ambiguous
3. market quantity to fall and price to be ambiguous
4. market quantity to rise and price to be ambiguous

.       The demand for good X will be more elastic

a.         the larger the number of substitutes

b.         the larger percentage good X takes in the consumer's budget.

c.         the longer the time period consumers have to adjust to a change in the price of good X

e.         all of these answers are correct

1. Calculate the price of a bond with Face value of bond is $1,000 and:

a. Bond yield of 8.4%, coupon rate of 7% and time to maturity is 5 years. Coupon is paid semi-annually (Bond 1)

b. Bond yield of 7%, coupon rate of 8% and time to maturity is 4 years. Coupon is paid semi-annually

c. Calculate the price of Bond 1 right after the 5th coupon payment.

2. Arcarde Ltd issues both ordinary shares and preference shares to raise capital, in which 500,000 ordinary shares have been issued at the price of $10 and 100,000 preference shares with a par value of $100.

a. Company promises to pay an annual dividend rate of 6.5% per share for its preference shares. If similar investment has a rate of return of 10% p.a, what is the fair price of Arcarde’s preference share?

b. Company also plans to pay dividend for its ordinary shares as follow: Y1 (next year): $0.8; Y2: $1; Y3: $1, after year 3, the dividend will growth at the rate of 3% and company’s rate of return is currently 9%, what should be the fair price of each ordinary shares?

Show all working out and equations

Mojo Industries tracks the number of units purchased and sold throughout each accounting period but applies its inventory costing method at the end of each period, as if it uses a periodic inventory system. Assume its accounting records provided the following information at the end of the accounting period, January 31. The inventory’s selling price is $8 per unit.

Today is 1 July 2020. Joan has a portfolio which consists of two different types of financial instruments (henceforth referred to as instrument A and instrument B). Joan purchased all instruments on 1 July 2011 to create this portfolio and this portfolio is composed of 29 units of instrument A and 25 units of instrument B.

• Instrument A is a zero-coupon bond with a face value of 100. This bond matures at par. The maturity date is 1 January 2030.
• Instrument B is a Treasury bond with a coupon rate of j₂ = 2.92% p.a. and face value of 100. This bond matures at par. The maturity date is 1 January 2023.

(b) Calculate the current price of instrument B per $100 face value. Round your answer to four decimal places. Assume the yield rate is j₂ = 4.26% p.a. and Joan has just received the coupon payment.

Select one:

a. 98.3139

b. 87.9163

c. 96.8539

d. 96.2635

Today is 1 July 2020. Joan has a portfolio which consists of two different types of financial instruments (henceforth referred to as instrument A and instrument B). Joan purchased all instruments on 1 July 2011 to create this portfolio and this portfolio is composed of 29 units of instrument A and 25 units of instrument B.

• Instrument A is a zero-coupon bond with a face value of 100. This bond matures at par. The maturity date is 1 January 2030.
• Instrument B is a Treasury bond with a coupon rate of j₂ = 2.92% p.a. and face value of 100. This bond matures at par. The maturity date is 1 January 2023.

(c) What is the duration of instrument B? Express your answer in terms of years and round your answer to three decimal places. Assume the yield rate is j₂ = 4.26% p.a.

Select one:

a. 4.855

b. 2.428

c. 5.783

d. 2.892

Today is 1 July 2020. Joan has a portfolio which consists of two different types of financial instruments (henceforth referred to as instrument A and instrument B). Joan purchased all instruments on 1 July 2011 to create this portfolio and this portfolio is composed of 29 units of instrument A and 25 units of instrument B.

• Instrument A is a zero-coupon bond with a face value of 100. This bond matures at par. The maturity date is 1 January 2030.
• Instrument B is a Treasury bond with a coupon rate of j₂ = 2.92% p.a. and face value of 100. This bond matures at par. The maturity date is 1 January 2023.

(d) Based on the price in part a and part b, and the duration value in part c, calculate the current duration of Joan’s portfolio. Express your answer in terms of years and round your answer to two decimal places.

Select one:

a. 5.58

b. 7.08

c. 6.51

d. 5.35

As a manager of a chain of movie theaters that are monopolies in their respective markets, you have noticed much higher demand on weekends than during the week. You therefore conducted a study that has revealed two different demand curves at your movie theaters. On weekends, the inverse demand function is P = 20 – 0.001Q; on weekdays, it is P = 15 – 0.002Q.

You acquire legal rights from movie producers to show their films at a cost of $25,000 per movie, plus a $2.50 “royalty” for each moviegoer entering your theaters (the average moviegoer in your market watches a movie only once). What type of pricing strategy should you consider in this case?

Third degree price discrimination

Block pricing

Second degree price discrimination

First degree price discrimination

What price should you charge on weekends? Instruction: Enter your response rounded to two decimal places.

What price should you charge on weekdays?

My Sheep’s Wool Blanket Company produces wool blankets that it sells for $350 each.

My Sheep’s Wool Blanket Company began operations on January 1, 2015. The company uses actual costs and does not generally carry Work in Process Inventories at the end of the year. Costing for the first three years of operations is given below.

Variable Costs for the first three years of operation (2015, 2016 & 2017):

                                                               Per Blanket

Direct Material                                           $125

Direct Labor                                               $100

Variable Overhead                                      $30

Variable Selling Expense                              $10

Fixed Costs for each of the first three years of operation (2015, 2016 & 2017):

Fixed Overhead                                          $150,000

Total Fixed Selling and Administrative Costs    $250,000

The Selling Price is $350 per blanket for all three years. Production and Sales figures (In number of blankets) for the three years are below.

                                    2015                    2016                     2017

Production                      5,000                    10,000                   6,250

Sales                             4,000                    7,000                  10,000

My Sheep’s Wool Blanket uses the FIFO method to assign cost to any units left in Ending Finished Goods Inventory.

Tasks:

A.     

1. Prepare, in good form, two Income Statements for the year ending December 31, 2016: One using Absorption costing and one using Variable Costing. Use the formats that I used in the class example for Chapter 6.

2. Then, prepare a Reconciliation to explain the difference in the Net Operating Income figures. Again, use the format that I used in the class example.

B.      In a management meeting at the end of December 2017, you are provided with a Variable Income Statement for year ending December 31, 2017. The Variable Income Statement showed Net Operating Income of $450,000. WITHOUT DOING ANY INCOME STATEMENTS FOR THE YEAR ENDING DECEMBER 31, 2017, prepare a Reconciliation for that year (2017)) that will give us the Net Operating Income (Loss) figure using Absorption Costing. In other words, what was the Net Operating Income (Loss) for the year ending December 31, 2017? You are ONLY TO PREPARE A RECONCILIATION STATEMENT.