Morning Sky, Inc. (MSI), manufactures and sells computer games. The company has several product lines based on the age range of the target market. MSI sells both individual games as well as packaged sets. All games are in CD format, and some utilize accessories such as steering wheels, electronic tablets, and hand controls. To date, MSI has developed and manufactured all the CDs itself as well as the accessories and packaging for all of its products.
The gaming market has traditionally been targeted at teenagers and young adults; however, the increasing affordability of computers and the incorporation of computer activities into junior high and elementary school curriculums has led to a significant increase in sales to younger children. MSI has always included games for younger children but now wants to expand its business to capitalize on changes in the industry. The company currently has excess capacity and is investigating several possible ways to improve profitability.
MSI is considering eliminating a product from its ToddleTown
Tours collection. This collection is aimed at children one to three
years of age and includes “tours” of a hypothetical town. Two
products, The Pet Store Parade and The Grocery Getaway, have
impressive sales. However, sales for the third CD in the
collection, The Post Office Polka, have lagged the others. Several
other CDs are planned for this collection, but none is ready for
production.
MSI’s information related to the ToddleTown Tours collection
follows:
| Segmented Income Statement for MSI’s | ||||||||||||||||||
| ToddleTown Tours Product Lines | ||||||||||||||||||
| Pet Store Parade | Grocery Getaway | Post Office Polka | Total | |||||||||||||||
| Sales revenue | $ | 145,000 | $ | 140,000 | $ | 38,000 | $ | 323,000 | ||||||||||
| Variable costs | 61,000 | 57,000 | 34,000 | 152,000 | ||||||||||||||
| Contribution margin | $ | 84,000 | $ | 83,000 | $ | 4,000 | $ | 171,000 | ||||||||||
| Less: Direct Fixed costs | 8,600 | 8,800 | 3,600 | 21,000 | ||||||||||||||
| Segment margin | $ | 75,400 | $ | 74,200 | $ | 400 | $ | 150,000 | ||||||||||
| Less: Common fixed costs* | 7,250 | 7,000 | 1,900 | 16,150 | ||||||||||||||
| Net operating income (loss) | $ | 68,150 | $ | 67,200 | $ | (1,500 | ) | $ | 133,850 | |||||||||
*Allocated based on total sales dollars.
MSI has determined that elimination of the Post Office Polka (POP)
program would not impact sales of the other two items. The
remaining fixed overhead currently allocated to the POP product
would be redistributed to the remaining two products.
Required:
1. Calculate the incremental effect on profit if the POP
product is eliminated:
2. Should MSI drop the POP product?
| Yes | |
| No |
3-a. Calculate the incremental effect on profit if
the POP product is eliminated. Suppose that $1,200 of the common
fixed costs could be avoided if the POP product line were
eliminated:
3-b. Should MSI drop the POP product?
| Yes | |
| No |
In: Accounting
ABC
ABC, Channel 6, is located in Eugene, Oregon, home of the University of Oregon’s football team. The station was owned and operated by George Wilcox, a former Duck (University of Oregon football player). Although there were other television stations in Eugene, ABC was the only station that had a weatherperson who was a member of the American Meteorological Society (AMS). Every night, Joe Hummel would be introduced as the only weatherperson in Eugene who was a member of the AMS. This was George’s idea, and he believed that this gave his station the mark of quality and helped with market share.
In addition to being a member of AMS, Joe was also the most popular person on any of the local news programs. Joe was always trying to find innovative ways to make the weather interesting, and this was especially difficult during the winter months when the weather seemed to remain the same over long periods of time. Joe’s forecast for next month, for example, was that there would be a 60% chance of rain every day, and that what happens on one day (rain or shine) was not in any way dependent on what happened the day before.
One of Joe’s most popular features of the weather report was to invite questions during the actual broadcast. Questions would be phoned in, and they were answered on the spot by Joe. Once a 10-year-old boy asked what caused fog, and Joe did an excellent job of describing some of the various causes.
Occasionally, Joe would make a mistake. For example, a high school senior asked Joe what the chances were of getting 15 days of rain in the next month (30 days). Joe made a quick calculation:
(60%) x (15 days / 30 days) = (60%) (1/2) = 30%
Joe quickly found out what it was like being wrong in a university town. He had over 50 phone calls from scientists, mathematicians, and other university professors, telling him that he had made a big mistake in computing the chances of getting 15 days of rain during the next 30 days. Although Joe didn’t understand all of the formulas the professors mentioned, he was determined to find the correct answer and make a correction during a future broadcast.
Discussion Questions
1. What are the chances of getting 15 days of rain during the next 30 days?
2. What do you think about Joe’s assumptions concerning the weather for the next 30 days?
Note : Answers should be in Word format
In: Statistics and Probability
Morning Sky, Inc. (MSI), manufactures and sells computer games.
The company has several product lines based on the age range of the
target market. MSI sells both individual games as well as packaged
sets. All games are in CD format, and some utilize accessories such
as steering wheels, electronic tablets, and hand controls. To date,
MSI has developed and manufactured all the CDs itself as well as
the accessories and packaging for all of its products.
The gaming market has traditionally been targeted at teenagers and young adults; however, the increasing affordability of computers and the incorporation of computer activities into junior high and elementary school curriculums has led to a significant increase in sales to younger children. MSI has always included games for younger children but now wants to expand its business to capitalize on changes in the industry. The company currently has excess capacity and is investigating several possible ways to improve profitability.
MSI is considering eliminating a product from its ToddleTown
Tours collection. This collection is aimed at children one to three
years of age and includes “tours” of a hypothetical town. Two
products, The Pet Store Parade and The Grocery Getaway, have
impressive sales. However, sales for the third CD in the
collection, The Post Office Polka, have lagged the others. Several
other CDs are planned for this collection, but none is ready for
production.
MSI’s information related to the ToddleTown Tours collection
follows:
| Segmented Income Statement for MSI’s | ||||||||||||||||||
| ToddleTown Tours Product Lines | ||||||||||||||||||
| Pet Store Parade | Grocery Getaway | Post Office Polka | Total | |||||||||||||||
| Sales revenue | $ | 135,000 | $ | 130,000 | $ | 36,000 | $ | 301,000 | ||||||||||
| Variable costs | 57,000 | 53,000 | 32,000 | 142,000 | ||||||||||||||
| Contribution margin | $ | 78,000 | $ | 77,000 | $ | 4,000 | $ | 159,000 | ||||||||||
| Less: Direct Fixed costs | 8,200 | 8,200 | 3,400 | 19,800 | ||||||||||||||
| Segment margin | $ | 69,800 | $ | 68,800 | $ | 600 | $ | 139,200 | ||||||||||
| Less: Common fixed costs* | 6,750 | 6,500 | 1,800 | 15,050 | ||||||||||||||
| Net operating income (loss) | $ | 63,050 | $ | 62,300 | $ | (1,200 | ) | $ | 124,150 | |||||||||
*Allocated based on total sales dollars.
MSI has determined that elimination of the Post Office Polka (POP)
program would not impact sales of the other two items. The
remaining fixed overhead currently allocated to the POP product
would be redistributed to the remaining two products.
Required:
1. Calculate the incremental effect on profit if the POP
product is eliminated.
| Effect On Profit |
2. Should MSI drop the POP product?
| Yes | |
| No |
3-a. Calculate the incremental effect on profit if
the POP product is eliminated. Suppose that $1,200 of the common
fixed costs could be avoided if the POP product line were
eliminated.
| Effect On Profit |
3-b. Should MSI drop the POP product?
| Yes | |
| No |
In: Accounting
Which of the following describes a growth mindset, as opposed to a fixed mindset?
a. Believing your talents, abilities, and intelligence can be developed in different ways
b.Learning and growing your brain through opportunities helps performance in school
c. Challenging yourself by persisting longer with problems helps to grow your mental muscle
d. All of the above phrases describe the growth mindset
In: Anatomy and Physiology
What role does Social Media play in your life? Are you aware of the social media policies of the organizations where you work, attend school, or volunteer? Have you used social media to resolve problems, participate in a cause you are passionate about, or to learn about UMUC? How does Social Media impact your personal and professional communications?
In: Other
Martin is a piano teacher who wants to price discriminate across his students based on their household income. He doesn't know the exact household income of his students, but what is a simple, verifiable characteristic he could use as a proxy for student income?
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age |
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hair color |
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parents' musical background |
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prior purchasing history |
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year in school |
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address |
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number of siblings |
In: Economics
According to the Economist in January 2015, Bitcoins have three useful qualities in a currency: they are “hard to earn, limited in supply and easy to verify.” Why therefore do many economists doubt that crypto-currencies can provide an alternative to conventional fiat money? What lessons from the historical evolution of money might the “Cartalist school” of money point to in the crypto-currencies debate?
In: Economics
It is believed that 1/4 of adults over 50 years old graduated from high school. We want to see if the percentage is the same for 30 year olds. How many should we survey in order to estimate the proportion of non-grads within 0.06 with 90 % confidence? Suppose we have no idea of the % of non-grads, what would be the "n" value?
In: Statistics and Probability
This assignment asks you to record a ten minute 'TedTalk' style speech that engages a social issue of your choice related to course content
You are free to craft your talk in any form you wish. Whom the talk would be intended for is up to you as well (high school student, family members, community members, elder, college student, etc).
In: Economics
Mr. and Mrs. Alalami Golden are married and have one pre-school-aged child. During the
year, Mrs. Alalami is employed and earns $64,000 while Mr. Alalami is a full-time student for
the entire year. The amount paid for tuition and fees is $8,700.
Required: On a joint income tax return, calculate their child tax credit and the allowed education
expenses deduction.
In: Accounting