Top executive officers of Vernon Company, a merchandising firm, are preparing the next year’s budget. The controller has provided everyone with the current year’s projected income statement.

  
Cost of goods sold is usually 70 percent of sales revenue, and selling and administrative expenses are usually 10 percent of sales plus a fixed cost of $77,000. The president has announced that the company’s goal is to increase net income by 15 percent.

Required

The following items are independent of each other.

1. Prepare a pro forma income statement. What percentage increase in sales would enable the company to reach its goal?

2. The market may become stagnant next year, and the company does not expect an increase in sales revenue. The production manager believes that an improved production procedure can cut cost of goods sold by 1 percent. Prepare a pro forma income statement still assuming the President's goal to increase net income by 15 percent. Calculate the required reduction in selling & administrative expenses to achieve the budgeted net income.

3. The company decides to escalate its advertising campaign to boost consumer recognition, which will increase selling and administrative expenses to $341,000. With the increased advertising, the company expects sales revenue to increase by 15 percent. Assume that cost of goods sold remains a constant proportion of sales. Prepare a pro forma income statement. Will the company reach its goal?

Question No.1: Solve the following system of two linear equations with two variables x and y by “Equating the equations” method. ? = ?? − ?? ??? ? = −? + 5

Question No.2: Is this matrix ? = [ ? ? ? ? ] singular or non-singular?

Question No. 3: Solve the following operations with the help of “PEMDAS”. ? ? − (?? ÷ ?) × ? ÷ ? − ? × ? + ?? ÷ ?3

Question No.4: A car was purchased for 5400 RO and is sold for 4300 RO. What is the percentage loss?

Question No.5 The total revenue function is given as ?? = ?? ? + ?? + ? 1. Find the average revenue 2. Find the marginal revenue 3. Find the marginal revenue when x = 3

Question No.6 : Calculate the rate of interest required for an investment ????? R.O to earn ???? R.O interest over ? years.

Question No.7: A salesman discounts a watch marked at 125 RO by 15%. 1. How much is the discount? 2. How much will a customer pay for the watch?

State-of-the-art digital imaging equipment purchased 2 years ago for $50,000 had an expected useful life of 5 years and a $5000 salvage value. After its poor installation performance, it was upgraded for $20,000 1 year ago. Increased demand now requires another upgrade for an additional $26,000 so that it can be used for three more years. Its new annual operating cost will be $30,000 with a $13,000 salvage after the 3 years. Alternatively, it can be replaced with new equipment costing $64,000, an estimated AOC of $15,000, and an expected salvage of $24,000 after 3 years. If replaced now, the existing equipment can be traded for only $9,000. Use a MARR of 12% per year.

South Shore Construction builds permanent docks and seawalls along the southern shore of long island, new york. Although the firm has been in business for only five years, revenue has increased from $320,000 in the first year of operation to $1,188,000 in the most recent year. The following data show the quarterly sales revenue in thousands of dollars:

1. Use Excel Solver to find the coefficients of a multiple regression model with dummy variables as follows to develop an equation to account for seasonal effects in the data. Qtr1 = 1 if Quarter 1, 0 otherwise; Qtr2 = 1 if Quarter 2, 0 otherwise; Qtr3 = 1 if Quarter 3, 0 otherwise. Round your answers to two decimal places.
   
   F_t = ____________ + ____________Qtr1 + ___________Qtr2 +__________ Qtr3
   
2. Let Period = 1 to refer to the observation in Quarter 1 of year 1; Period = 2 to refer to the observation in Quarter 2 of year 1; . . . and Period = 20 to refer to the observation in Quarter 4 of year 5. Using the dummy variables defined in part (b) and Period, develop an equation to account for seasonal effects and any linear trend in the time series using Excel Solver. Round your answers to two decimal places. If your answer is negative value enter minus sign.
   
   F_t = ___________ + ___________Qtr1 + _____________Qtr2 + _____________Qtr3 + __________Period
   
   Based upon the seasonal effects in the data and linear trend, compute estimates of quarterly sales for year 6. Round your answers to one decimal place.
   
   Quarter 1 forecast =
   
   Quarter 2 forecast =
   
   Quarter 3 forecast =
   
   Quarter 4 forecast =

Problem 15-28 (Algorithmic)

South Shore Construction builds permanent docks and seawalls along the southern shore of long island, new york. Although the firm has been in business for only five years, revenue has increased from $320,000 in the first year of operation to $1,188,000 in the most recent year. The following data show the quarterly sales revenue in thousands of dollars:

1. Use Excel Solver to find the coefficients of a multiple regression model with dummy variables as follows to develop an equation to account for seasonal effects in the data. Qtr1 = 1 if Quarter 1, 0 otherwise; Qtr2 = 1 if Quarter 2, 0 otherwise; Qtr3 = 1 if Quarter 3, 0 otherwise. Round your answers to two decimal places.
   
   F_t =  + Qtr1 + Qtr2 + Qtr3
   
2. Let Period = 1 to refer to the observation in Quarter 1 of year 1; Period = 2 to refer to the observation in Quarter 2 of year 1; . . . and Period = 20 to refer to the observation in Quarter 4 of year 5. Using the dummy variables defined in part (b) and Period, develop an equation to account for seasonal effects and any linear trend in the time series using Excel Solver. Round your answers to two decimal places. If your answer is negative value enter minus sign.
   
   F_t =  + Qtr1 + Qtr2 + Qtr3 + Period
   
   Based upon the seasonal effects in the data and linear trend, compute estimates of quarterly sales for year 6. Round your answers to one decimal place.
   
   Quarter 1 forecast =  
   
   Quarter 2 forecast =  
   
   Quarter 3 forecast =  
   
   Quarter 4 forecast =

Use R to do each of the following. Use R code instructions that are as general as possible, and also as efficient as possible. Use the Quick-R website for help on finding commands. 1. The following is a random sample of CT scores selected from 32 Miami students. 28, 27, 29, 27, 29, 31, 32, 30, 34, 30, 27, 25, 30, 32, 35, 32 23, 26, 27, 33, 33, 33, 31, 25, 28, 34, 30, 33, 28, 26, 30, 28 (a) Find the mean and standard deviation of this sample. Give the interpretation of the mean in the context. (b) Find the five numbers summary and provide the interpretation of the sample median in the context. (c) Draw the histogram of the data. What can you say about the distribution of the data. (d) Draw the Boxplot of the data. Is there any potential outlier? 2. The weekly amount spent for maintenance and repairs in a certain company has an approximately normal distribution, with a mean of $600 and a standard deviation of $40. If $700 is budgeted to cover repairs for next week, (a) what is the probability that the actual costs will exceed the budgeted amount? (b) how much should be budgeted weekly for maintenance and repairs to ensure that the probability that the budgeted amount will be exceeded in any given week is only 0.1?

AirQual Test Corporation provides on-site air quality testing services. The company has provided the following cost formulas and actual results for the month of February:

The company uses the number of jobs as its measure of activity. For example, mobile lab operating expenses should be $4,900 plus $31 per job, and the actual mobile lab operating expenses for February were $8,460. The company expected to work 120 jobs in February, but actually worked 122 jobs.

Required:

Prepare a flexible budget performance report showing AirQual Test Corporation’s revenue and spending variances and activity variances for February. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)

AirQual Test Corporation provides on-site air quality testing services. The company has provided the following cost formulas and actual results for the month of February:

The company uses the number of jobs as its measure of activity. For example, mobile lab operating expenses should be $4,900 plus $33 per job, and the actual mobile lab operating expenses for February were $9,030. The company expected to work 130 jobs in February, but actually worked 136 jobs.

Required:

Prepare a flexible budget performance report showing AirQual Test Corporation’s revenue and spending variances and activity variances for February. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)

AirQual Test Corporation provides on-site air quality testing services. The company has provided the following cost formulas and actual results for the month of February:

The company uses the number of jobs as its measure of activity. For example, mobile lab operating expenses should be $4,900 plus $30 per job, and the actual mobile lab operating expenses for February were $9,240. The company expected to work 150 jobs in February, but actually worked 154 jobs.

Required:

Prepare a flexible budget performance report showing AirQual Test Corporation’s revenue and spending variances and activity variances for February. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)

In your own words Discuss in detail why bonds may be sold or traded at a discount or a premium. Also explain in your own words what the amortization of a bond discount or a bond premium is and how it works.