Need solution for 3rd question
I solved first part below is my answers so far. Really need help on second question.
Below is the Background, What I need to do, and the price data
to start with. Any help with getting me started is appreciated.
Background
The Book Emporium wants to price books to optimize profits. The
spreadsheet for this homework has
sales data on Harry Potter book 7. For each week, the Book Emporium
varied prices on Harry Potter
7 to determine a demand curve. The percent of customers who visited
BookEmporium.com and purchased
Harry Potter book 7 is shown in the spreadsheet. J.K. Rowling has
announced a sequel to the Harry
Potter series. Determine the price for the sequel.
Definitions
Price what you will charge each customer who purchases the new book
Book Cost
what you must pay the publisher for each book
% purchased in your pricing test, the percent of people who bought
at that price Predicted %
your regression model estimate of the percent sold based on price
Predicted sales estimate of
number of customers who buy the book from you Revenue total revenue
generated (price *
predicted sales)
Profit (price – book cost) * predicted sales
Assumptions
1. Assume that the demand for the book sequel will be similar to
Harry Potter 7.
2. Assume that 100,000 customers will consider purchasing a book
from you
3. The data is not an entirely accurate prediction of the demand,
but a regression on the data
using a power model will give a reasonable prediction
4. Assume that you pay the publisher $5.00 for each book.
Outline and grading criteria:
1. Regression analysis (40%)
a. Graph the percent purchased against price (5%)
b. Perform a regression using power regression to determine the
predicted % column.
i. Graph the new curve (5%)
ii. Estimate the equation of the line (5%)
iii. What does the R2 mean? (5%)
c. Assuming there are 100,000 customers who visit your website and
the publisher cost is $5.00,
estimate the number of books sold (predicted sales column)
(5%)
d. Calculate the revenue column (price * predicted sales)
(5%)
e. Calculate the profit column ((price – book cost) * predicted
sales) (5%)
f. Use conditional formatting to highlight the profit values for
all prices (5%)
2. Optimization analysis (with constraints) (30%)
a. Calculate the price point for the highest profit possible
i. The publisher will sell the books to you at $5.00 each with no
minimum order (10%)
ii. The publisher has agreed to sell you the books at $4.50 each if
you sell at least 30,000
(10%)
iii. The publisher has agreed to sell you the books at $4.00 each
if you sell at least 50,000
(10%)
b. Run a constrained optimization for each of the above situations
to determine which cost point
(from the publisher) and price (to your customer) maximizes your
profit. Which cost point should
you accept from the publisher?
3. Discussion (30%)
a. What are the risks of using Harry Potter 7 data in predicting
your new demand curve for the
Harry Potter sequel? (15%)
b. What other data would you like to have to perform your analysis?
(15%)
|
Price |
% Purchased |
Predicted % |
Predicted Sales |
Revenue |
Profit |
|
$ 5.00 |
65% |
||||
|
$ 6.00 |
50% |
||||
|
$ 7.00 |
40% |
||||
|
$ 8.00 |
32% |
||||
|
$ 9.00 |
25% |
||||
|
$ 10.00 |
20% |
||||
|
$ 11.00 |
16% |
||||
|
$ 12.00 |
13% |
||||
|
$ 13.00 |
11% |
||||
|
$ 14.00 |
10% |
||||
|
$ 15.00 |
8% |
||||
|
$ 16.00 |
7% |
||||
|
$ 17.00 |
6% |
||||
|
$ 18.00 |
6% |
||||
|
$ 19.00 |
5% |
||||
|
$ 20.00 |
5% |
||||
|
$ 21.00 |
5% |
||||
|
$ 22.00 |
4% |
||||
|
$ 23.00 |
4% |
||||
|
$ 24.00 |
4% |
||||
|
$ 25.00 |
4% |
||||
|
Book Cost |
$ 5.00 |
||||
In: Statistics and Probability
| 1. |
On October 1, BSS placed an order for 100 golf shirts at a unit cost of $21, under terms 2/10, n/30. Record the place of the order for golf shirts. |
| 2. |
The order placed on October 1 was received by BSS on October 10, but 10 golf shirts had been damaged in shipment. Record the inventory purchased on account. |
| 3. |
On October 11, the 10 damaged golf shirts were returned. Record the return of the damaged inventory. |
| 4. |
On October 12, BSS complained that the remaining golf shirts were slightly defective so the supplier grated a $290 allowance. Record the allowance received for the defective inventory purchased. |
| 5. |
On October 13, BSS paid for the golf shirts. Record the payment in full. |
| 6. |
During the first week of October BSS received student and faculty orders for 90 golf shirts, at a unit price of $39.00, on terms 2/10, n/30. The golf shirts were delivered to the customers on October 18. Record the sales revenue on account for the order. |
| 7. |
During the first week of October BSS received student and faculty orders for 90 golf shirts, at a unit price of $39.00, on terms 2/10, n/30. The golf shirts were delivered to the customers on October 18. Record the cost of goods sold for the order. |
| 8. |
Customers were unhappy with the golf shirts, so BSS permitted them to be returned or gave an allowance of $9.00 per shirt. On October 21, one-half of the golf shirts were returned by customers. Record the return of the unsatisfactory merchandise sold on account. |
| 9. |
Customers were unhappy with the golf shirts, so BSS permitted them to be returned or gave an allowance of $9.00 per shirt. On October 21, one-half of the golf shirts were returned by customers. Record the cost of goods returned. |
| 10. |
Customers were unhappy with the golf shirts, so BSS permitted them to be returned or gave an allowance of $9.00 per shirt. On October 22, the remaining 45 customers were granted the allowance. Record the allowance granted for the defective inventory sold on account. |
| 11. |
On October 25, the customers paid their remaining balances due on account. Record the customers' payments in full. |
| 12. |
As of October 31, the payment of inventory ordered in full dated October 13 had not yet cleared the bank. Record the Otober 13 check that had not yet cleared the bank. |
value:
1.33 points
Required information
C6-1 Part 1
| Required: | |
| 1b. |
Prepare journal entries for the transactions described above, using the date of each transaction as its reference. Assume BSS uses perpetual inventory accounts. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) 1a. |
|
Report the financial effects of the above transactions in a multistep income statement for the month ended October 31 prepared for internal use. Assume operating expenses, other than cost of goods sold, are $100 and income tax expense is $135. |
|
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5. Cane Company manufactures two products called Alpha and Beta that sell for $180 and $145, respectively. Each product uses only one type of raw material that costs $6 per pound. The company has the capacity to annually produce 118,000 units of each product. Its average cost per unit for each product at this level of activity are given below: Alpha Beta Direct materials $ 36 $ 24 Direct labor 32 27 Variable manufacturing overhead 19 17 Traceable fixed manufacturing overhead 27 30 Variable selling expenses 24 20 Common fixed expenses 27 22 Total cost per unit $ 165 $ 140 The company considers its traceable fixed manufacturing overhead to be avoidable, whereas its common fixed expenses are unavoidable and have been allocated to products based on sales dollars. 5. Assume that Cane expects to produce and sell 107,000 Alphas during the current year. One of Cane's sales representatives has found a new customer who is willing to buy 22,000 additional Alphas for a price of $128 per unit; however pursuing this opportunity will decrease Alpha sales to regular customers by 11,000 units. a. What is the financial advantage (disadvantage) of accepting the new customer’s order? b. Based on your calculations above should the special order be accepted?
6. Cane Company manufactures two products called Alpha and Beta that sell for $180 and $145, respectively. Each product uses only one type of raw material that costs $6 per pound. The company has the capacity to annually produce 118,000 units of each product. Its average cost per unit for each product at this level of activity are given below: Alpha Beta Direct materials $ 36 $ 24 Direct labor 32 27 Variable manufacturing overhead 19 17 Traceable fixed manufacturing overhead 27 30 Variable selling expenses 24 20 Common fixed expenses 27 22 Total cost per unit $ 165 $ 140 The company considers its traceable fixed manufacturing overhead to be avoidable, whereas its common fixed expenses are unavoidable and have been allocated to products based on sales dollars. 6. Assume that Cane normally produces and sells 102,000 Betas per year. What is the financial advantage (disadvantage) of discontinuing the Beta product line? 7. Cane Company manufactures two products called Alpha and Beta that sell for $180 and $145, respectively. Each product uses only one type of raw material that costs $6 per pound. The company has the capacity to annually produce 118,000 units of each product. Its average cost per unit for each product at this level of activity are given below: Alpha Beta Direct materials $ 36 $ 24 Direct labor 32 27 Variable manufacturing overhead 19 17 Traceable fixed manufacturing overhead 27 30 Variable selling expenses 24 20 Common fixed expenses 27 22 Total cost per unit $ 165 $ 140 The company considers its traceable fixed manufacturing overhead to be avoidable, whereas its common fixed expenses are unavoidable and have been allocated to products based on sales dollars.
7. Assume that Cane normally produces and sells 52,000 Betas per year. What is the financial advantage (disadvantage) of discontinuing the Beta product line? 8. Cane Company manufactures two products called Alpha and Beta that sell for $180 and $145, respectively. Each product uses only one type of raw material that costs $6 per pound. The company has the capacity to annually produce 118,000 units of each product. Its average cost per unit for each product at this level of activity are given below: Alpha Beta Direct materials $ 36 $ 24 Direct labor 32 27 Variable manufacturing overhead 19 17 Traceable fixed manufacturing overhead 27 30 Variable selling expenses 24 20 Common fixed expenses 27 22 Total cost per unit $ 165 $ 140 The company considers its traceable fixed manufacturing overhead to be avoidable, whereas its common fixed expenses are unavoidable and have been allocated to products based on sales dollars.
8. Assume that Cane normally produces and sells 72,000 Betas and 92,000 Alphas per year. If Cane discontinues the Beta product line, its sales representatives could increase sales of Alpha by 12,000 units. What is the financial advantage (disadvantage) of discontinuing the Beta product line?
9.
Cane Company manufactures two products called Alpha and Beta that sell for $180 and $145, respectively. Each product uses only one type of raw material that costs $6 per pound. The company has the capacity to annually produce 118,000 units of each product. Its average cost per unit for each product at this level of activity are given below:
| Alpha | Beta | |||||||
| Direct materials | $ | 36 | $ | 24 | ||||
| Direct labor | 32 | 27 | ||||||
| Variable manufacturing overhead | 19 | 17 | ||||||
| Traceable fixed manufacturing overhead | 27 | 30 | ||||||
| Variable selling expenses | 24 | 20 | ||||||
| Common fixed expenses | 27 | 22 | ||||||
| Total cost per unit | $ | 165 | $ | 140 | ||||
The company considers its traceable fixed manufacturing overhead to be avoidable, whereas its common fixed expenses are unavoidable and have been allocated to products based on sales dollars.
9. Assume that Cane expects to produce and sell 92,000 Alphas during the current year. A supplier has offered to manufacture and deliver 92,000 Alphas to Cane for a price of $128 per unit. What is the financial advantage (disadvantage) of buying 92,000 units from the supplier instead of making those units?
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2020 is $210,000. What is the most that each can contribute
directly to a Roth IRA in 2020?
$6,000
$7,000
$0
None of the other answers is correct
$4,500
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6
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Your Answer:
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THANK YOU! :)
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