Strategic Initiatives and CSR
Get Hitched Inc. is a production company that is in the process of testing a strategic initiative aimed at increasing gross profit. The company’s current sales revenue is $2,100,000. Currently, the company’s gross profit is 35% of sales, but the company’s target gross profit percentage is 40%. The company’s current monthly cost of production is $1,365,000. Of this cost, 60% is for labor, 20% is for materials, and 20% is for overhead.
The strategic initiative being tested at Get Hitched is a redesign of its production process that splits the process into two sequential procedures. The make up of the costs of production for Procedure 1 is currently 50% direct labor, 45% direct materials, and 5% overhead. The makeup of the costs of production for Procedure 2 is currently 50% direct labor, 20% direct materials, and 30% overhead. Company management estimates that Procedure 1 costs twice as much as Procedure 2.
1. Determine what the cost of labor, materials, and overhead for both Procedures 1 and 2 would need to be for the company to meet its target gross profit at the current level of sales.
Cost makeup of Procedure 1:
| Direct Labor | $ |
| Direct Materials | |
| Overhead | |
| Total | $ |
Cost makeup of Procedure 2:
| Direct Labor | $ |
| Direct Materials | |
| Overhead | |
| Total | $ |
2. The company’s actual direct materials cost is $390,600 for Procedure 1. Determine the actual cost of direct labor, direct materials, and overhead for each procedure, and the total cost of production for each procedure.
Cost makeup of Procedure 1:
| Direct Labor | $ |
| Direct Materials | |
| Overhead | |
| Total | $ |
Cost makeup of Procedure 2:
| Direct Labor | $ |
| Direct Materials | |
| Overhead | |
| Total | $ |
3. The company is planning a CSR initiative to reuse some of the indirect materials used in production during Procedure 2. These indirect materials normally make up 60% of the overhead cost for Procedure 2, but the CSR initiative would reduce the usage of indirect materials. Determine what the maximum new cost of these indirect materials could be for Procedure 2 if this CSR initiative is expected to enable the company to meet its target gross profit percentage (holding all other costs constant).
Maximum new cost of P2 overhead materials:
$
In: Finance
Race One Motors is an Indonesian car manufacturer. At its largest manufacturing facility, in Jakarta, the company produces subcomponents at a rate of 290 per day, and it uses these subcomponents at a rate of 12,800 per year ( of 250 working days). Holding costs are $2 per item per year, and ordering costs are $31 per order.
a, What is the economic production quantity? (ROUND YOUR RESPONSE TO TWO DECIMAL PLACES)
b, How many production runs per year will be made? (ROUND YOUR RESPONSE TO TWO DECIMAL PLACES)
c, What will be the maximum inventory level?(ROUND YOUR RESPONSE TO TWO DECIMAL PLACES)
d, What percentage of time will the facility be producing components? (ENTER YOUR RESPONSE AS A PERCENTAGE ROUNDED TO TWO DECIMAL PLACES)
e, What is the annual cost of ordering and holding inventory? (ROUND YOUR RESPONSE TO TWO DECIMAL PLACES)
In: Operations Management
The amounts of electricity bills for all households in a particular city have approximately normal distribution with a mean of $140 and a standard deviation of $30. A researcher took random samples of 25 electricity bills for a certain study.
a. Based on this information, what is the expected value of the mean of the sampling distribution of mean?
b. What is the standard error of the sampling distribution of mean?
c. If his one sample of 25 bills has an average cost of $155, what is the z-score that represents the location of this value in the sampling distribution?
d. What is the probability of getting this result or greater (enter as a percentage - if your percentage is less than one full percent enter a zero before the decimal point)?
e. Assuming that z-scores greater than +2 or less than -2 are unlikely to occur due to sampling error alone, is this a likely or unlikely result?
In: Statistics and Probability
2. Add a title comment block to the top of the new Python file using the following form # A brief description of the project
3. Ask user - to enter the charge for food
4. Ask user - to enter theTip for server ( remember this is a percentage , the input therefore should be decimal. For example, for a 15% tip, 0.15 should be entered)
5. Ask user - to enter the Tax amount ( this is a percentage too, so for a 6% tax , 0.06 should be entered)
6. Calculate tip and tax
7. Display the following: *Calculated tip *Calculated tax *Display total cost of meal ( food charge + tip+ tax)
8. What is the finished code solution file(s)
Notes: the tip , tax and amount are to be requested from the user, they are NOT hard coded (fixed amounts) Write program Pseudocode ( detail algorithm) and add it as a comment block to the submitted program.
In: Computer Science
On December 1, Year 1, John and Patty Driver formed a corporation called Susquehanna Equipment Rentals. The new corporation was able to begin operations immediately by purchasing the assets and taking over the location of Rent-It, an equipment rental company that was going out of business. The newly formed company uses the following accounts.
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|
|
|
Cash |
Capital Stock |
|
Accounts Receivable |
Retained Earnings |
|
Prepaid Rent |
Dividends |
|
Unexpired Insurance |
Income Summary |
|
Office Supplies |
Rental Fees Earned |
|
Rental Equipment |
Salaries Expense |
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Accumulated Depreciation: Rental Equipment |
Maintenance Expense |
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Notes Payable |
Utilities Expense |
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Accounts Payable |
Rent Expense |
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Interest Payable |
Office Supplies Expense |
|
Salaries Payable |
Depreciation Expense |
|
Dividends Payable |
Interest Expense |
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Unearned Rental Fees |
Income Taxes Expense |
|
Income Taxes Payable |
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|
|
|
The corporation performs adjusting entries monthly. Closing entries are performed annually on December 31. During December, the corporation entered into the following transactions.
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Dec. |
1 |
|
Issued to John and Patty Driver 20,000 shares of capital stock in exchange for a total of $240,000 cash. |
|
Dec. |
1 |
|
Purchased for $288,000 all of the equipment formerly owned by Rent-It. Paid $168,000 cash and issued a 1-year note payable for $120,000. The note, plus all 12 months of accrued interest, are due November 30, Year 2. |
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Dec. |
1 |
|
Paid $14,400 to Shapiro Realty as three months’ advance rent on the rental yard and office formerly occupied by Rent-It. |
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Dec. |
4 |
|
Purchased office supplies on account from Modern Office Co., $1,200. Payment due in 30 days. (These supplies are expected to last for several months; debit the Office Supplies asset account.) |
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Dec. |
8 |
|
Received $9,600 cash as advance payment on equipment rental from McNamer Construction Company. (Credit Unearned Rental Fees.) |
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Dec. |
12 |
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Paid salaries for the first two weeks in December, $6,240. |
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Dec. |
15 |
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Excluding the McNamer advance, equipment rental fees earned during the first 15 days of December amounted to $21,600, of which $14,400 was received in cash. |
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Dec. |
17 |
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Purchased on account from Earth Movers, Inc., $720 in parts needed to repair a rental tractor. (Debit an expense account.) Payment is due in 10 days. |
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Dec. |
23 |
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Collected $2,400 of the accounts receivable recorded on December 15. |
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Dec. |
26 |
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Rented a backhoe to Mission Landscaping at a price of $300 per day, to be paid when the backhoe is returned. Mission Landscaping expects to keep the backhoe for about two or three weeks. |
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Dec. |
26 |
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Paid biweekly salaries, $6,240. |
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Dec. |
27 |
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Paid the account payable to Earth Movers, Inc., $720. |
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Dec. |
28 |
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Declared a dividend of 12 cents per share, payable on January 15, Year 2. |
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Dec. |
29 |
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Susquehanna Equipment Rentals was named, along with Mission Landscaping and Collier Construction, as a co-defendant in a $30,000 lawsuit filed on behalf of Kevin Davenport. Mission Landscaping had left the rented backhoe in a fenced construction site owned by Collier Construction. After working hours on December 26, Davenport had climbed the fence to play on parked construction equipment. While playing on the backhoe, he fell and broke his arm. The extent of the company’s legal and financial responsibility for this accident, if any, cannot be determined at this time. (Note: This event does not require a journal entry at this time, but may require disclosure in notes accompanying the statements.) |
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Dec. |
29 |
|
Purchased a 12-month public liability insurance policy for $11,520. This policy protects the company against liability for injuries and property damage caused by its equipment. However, the policy goes into effect on January 1, Year 2, and affords no coverage for the injuries sustained by Kevin Davenport on December 26. |
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Dec. |
31 |
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Received a bill from Universal Utilities for the month of December, $840. Payment is due in 30 days. |
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Dec. |
31 |
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Equipment rental fees earned during the second half of December amounted to $24,000, of which $18,720 was received in cash. |
Data for Adjusting Entries
In: Accounting
You are an audit senior at Morton and Lowe Chartered Accountants LLP. The firm has recently begun to perform audits and has two partners, managers, senior and junior staff accountants respectively. Your firm has recently been approached by Don Cherry, the owner of Maple Leaf Construction, to be engaged in their upcoming audit. The company’s bank requires them to submit annual audited financial statements 60 days after year end. In addition to submitting the statements to the bank, the company is bound by specific covenants. If in violation of these covenants the bank will require full payment of the outstanding loan.
The owner tells you that he had never liked his previous auditor Dafnas and Arthurs LLP. Don tells you “they would ignore my instructions on how to complete the audit and would threaten to qualify my report if I did not make adjustments to my year end work in process.” He advises you not to contact them due to this poor relationship.
Maple Leaf Construction has projects all over the country and has recently been in the news for building new developments in marshy areas, and not building their homes up to code.
The company’s controller Phil Kessel is a recent graduate from Nipissing University and has no previous accounting experience. He was hired four months ago after the old controller Dion Phaneuf was caught for defrauding the company for over $80,000 of cash and assets.
Excerpts from financial statements are as follows:
|
2012 |
2011 |
||||||
|
Cash |
(106,584) |
76,854 |
|||||
|
Accounts receivable |
1,025,896 |
658,000 |
|||||
|
Work in process |
- |
1,056,000 |
|||||
|
Capital assets |
750,000 |
750,000 |
|||||
|
Accounts payable |
987,000 |
648,000 |
|||||
|
Bank loan |
950,000 |
1,000,000 |
|||||
|
Billings in excess of work completed |
- |
650,000 |
|||||
|
Sales |
3,000,000 |
2,000,000 |
|||||
|
Cost of Sales |
720,000 |
1,300,000 |
|||||
You have been asked by the engagement partner to analyse whether or not to accept the client.
What are three things to consider (not including engagement risks or preliminary analytical review) when accepting Maple Leaf Construction as a new client
In: Accounting
Question A1 Paula Chan, the Director of Montreal Construction Company, requests the Human Resources Department to find two Senior Engineering Managers through internal recruitment. To achieve this recruiting goal, the Human Resources Manager announces the job opening internally through newsletters, bulletin boards, and intranet. In addition, the human resources manager, Mary, also uses the Human Resources Information Systems (HRIS) to identify potential candidates and contacts them to apply for promotion. Montreal Construction Company in the past five years has invested much money in HRIS which is a comprehensive database used for monitoring and tracking employees’ skills and abilities of the entire workforce. Answer the following question based on the above scenario. (a) Identify ONE Internal Recruitment System of Montreal Construction Company. Explain whether this system could reduce unfairness in personnel selection. (b) Name TWO recruitment sources adopted by the HR manager, Mary, to find potential candidates for the position of Senior Engineering Mangers. After interviewing the potential candidates, Paula strongly feels that all candidates do not process all the skills and abilities which are essential for the job positions of Senior Engineering Managers. She determines to use external recruitment to find the right candidates. Given the time and cost of rigorous selection procedures, the HR manager, Mary, suggests Paula to use Initial Assessment Methods for external recruitment. (c) Suggest ONE initial assessment method Mary may use for recruitment which is the best predictor of job performance. Explain ONE disadvantage of this method. (Note: If you provide than ONE method, only the FIRST method will be marked.) (d) Paula is informed by the HR managers that some initial assessment methods are highly used by recruiters for selecting applicants but with low validity. Name ONE of these assessment methods with these characteristics. (1 mark) (e) Mary considers using employment agencies and executive search firms for finding the right candidates. Suggest and explain which source is more suitable for the hiring of Senior Engineering Managers.
In: Operations Management
The graph illustrates a normal distribution for the prices paid
for a particular model of HD television. The mean price paid is
$1000 and the standard deviation is $105.
685 790 895 1000 1105 1210 1315
What is the approximate percentage of buyers who paid between
$1000 and $1210?
%
What is the approximate percentage of buyers who paid between $895
and $1105?
%
What is the approximate percentage of buyers who paid less than
$685?
%
What is the approximate percentage of buyers who paid more than
$1210?
%
What is the approximate percentage of buyers who paid between $1000
and $1105?
%
What is the approximate percentage of buyers who paid between $685
and $1000?
%
In: Statistics and Probability
A property is subject to taxation at a rate of $2.69485 per $100 of value. If the property has an assessed value $275,000 the tax amount due would be?
a. $74,108.38 b. $ 741.08 c. $7,410.84 d. $7,425.00 e. $7,140.84
Which of the following describes a Gross Lease?
a. A lease in which the tenant pays rent plus defined operating expenses related to the property.
b. An agreement in which the tenant pays a fixed amount of rent and some or all of the utilities while the landlord/property owner is responsible for payment of all taxes, insurance and expenses related to the property.
c. A lease in which the tenant pays the landlord a percentage of the monthly income derived from the property.
d. An agreement allowing the tenant to terminate the lease should certain conditions near the premises become intolerable.
e. An agreement in which the tenant pays a fixed amount plus their share of taxes, insurance and operating expenses.
Which of the following transactions is BEST described as involving a ground lease?
a. A tenant agrees to pay a base amount for the property plus a percentage of business generated income
b. A landowner charges a commercial tenant separate amounts for the land and the leased restaurant facility.
c. A property owner negotiates terms with a prospective occupant to purchase the subject property at a fixed rate of $500 per month for a period of 10 years.
d. A property owner negotiates terms charging rent for a period of 50 years, allowing the tenant to improve the property with a restaurant building. After the 50 year period, the property and improvements return to the property owner.
e. A tenant agrees to pay a proportionate amount of rent, increasing on annual third-party appraisals of the leased property.
Lenders who make funds available directly to borrowers for the purchase of property include all of the following EXCEPT:
a. Commercial Banks b. Credit Unions c. Fannie Mae d. Savings Associations e. Endowment Funds
The following are requirements for a valid lease EXCEPT:
a. Capacity to contract b. Legal Objective c. Offer and Acceptance d. Attorney Approval e. Consideration
In: Finance
As the vice president of finance for a company producing and selling electronic switchboards, you are considering a foreign investment to build a plant to assemble electronic components. A source in China advises you that a town near Shenzhen may be an excellent location for a new plant. Chinese are well educated and willing to work for reasonable wages. Projected construction costs are acceptable. Both rail lines and airports are nearby, and the current Chinese government seems politically stable. The town even has a technical college that will be an excellent source for skilled employees. The plant will ship most of the finished electronic components back to the United States.
Do you know everything you need to make an investment decision?
If not, what else do you need to know about investment in foreign countries?
What does it mean to say that law is the foundation of the
private enterprise system?
Three years ago the Darden Corporation bought a thousand acres of land that borders the Potowac River in Washam County. While waiting on development opportunities, Darden cut timber to help repay the mortgage loan it took out to buy the land. On March 2, the Washam County Commission proposed an ordinance to establish a 250-foot-wide greenway along the south side of the Potowac that will effectively ban both development and timbering on nearly 80 acres of Darden’s land. The same day in an unrelated accident a Darden truck ran over a hunter who was hunting without permission on the company’s land. Darden immediately contacted an attorney in Washam City.
What is the law?
What does it mean to say that Darden has “property” in the land? That the hunter has “property” in himself?
What sources of law will the attorney have to understand in order to advise Darden about the proposed greenway?
The company’s potential responsibility to the hunter?
In: Accounting