Organizations use budgets to reach their financial goals. A planning budget is a detailed financial plan that shows future income and expenses. For example, all of us sometimes create household budgets that plan projected income and expenses for food, clothing, housing, etc. At the end of the budgeting period, we compare what we earned and our expenses to the planning budget to make sure we followed the plan. For example, if we buy a boat and didn’t budget for that boat, what might happen? Organizations use budgets in a similar way.

We also create flexible budgets to help guide actual operations. For example, an organization’s actual expenses will rarely equal its budgeted expenses as estimated. Activities, such as sales, are rarely the same as budgeted. Many actual expenses and revenues will naturally differ from what was budgeted. A flexible budget is an estimate of what revenues and costs should have been, given the actual level of activity for the period. A flexible budget might help us to justify buying that boat!

Variance analysis evaluates and improves performance. A varianceis the difference between the actual amount and the amount budgeted in a certain time period. In other words, the amounts are different. Revenue variance is the difference between actual revenue and budgeted revenue. If the actual revenue is higher than budgeted revenue, the variance is labeled favorable. If actual revenue is less than budgeted, the variance is labeled unfavorable. Spending variances also occur. If the actual spending exceeds budgeted spending, the variance is unfavorable. If the actual spending is less than budgeted spending, the variance is favorable. As you can see, earning more than budgeted is good, but we should try to avoid spending more than what we budget. Think about the boat!

• Describe the budgeting process at your place of work. If you do not work or if this information is not available, you may describe the budgeting process you use in your personal life.
• Explain how using a flexible budget and variance analysis can help make the process you described above more effective.

You would like to have $600,000 when you retire in 30 years. How much should you invest each quarter if you can earn a rate of 3% compounded quarterly?

a) How much should you deposit each quarter?

$

b) How much total money will you put into the account?

$

c) How much total interest will you earn?

Determine the magnitude of the seasonal ratio of the average quarter centered at that time period.

Barbara has a jar of coins, some Canadian, some U.S., and similarly, some quarters, some dimes. [There is no other nationality of coin, nor any other value of coin.] 70% are Canadian coins. Given that it is a Canadian coin, there is a 40% chance it is a quarter. Given that it is not a Canadian coin, there is a 40% chance it is a quarter. Are nationality and value independent? Or is impossible to tell? Please explain how you know.

Identify the following interest rate statements as either nominal or effective: (a) 1.3% per month; (b) 1% per week compounded weekly; (c) 15% per year compounded monthly; (d) effective 1.5% per month compounded daily; (e) 15% per year compounded semiannually; (f) 3% per quarter; (g) 3% per quarter compounded continuously.

You are following Parks’s Perfect Pianos (3P) stock. You’re asked to value the firm’s stock. You’re told the firm will pay a dividend of $1.80 next quarter. You estimate the firm’s dividends will grow at 5% per quarter for 4 years; then at 3% quarterly for 5 years; then at 1% quarterly thereafter. The discount rate is 11% per year, compounded annually. Find the stock price.

You would like to have $650,000 when you retire in 40 years. How much should you invest each quarter if you can earn a rate of 2.7% compounded quarterly?

a) How much should you deposit each quarter?

b) How much total money will you put into the account?

c) How much total interest will you earn?

Eye Trendy Corporation is a distributor of frames for sunglasses. The company’s controller is currently preparing a budget for the third quarter of the year. The following information is from company’s financial records: Projected Sales July 3,120 units August 2,000 units September 2,640 units October 3,000 units • Selling price is RM25 per unit • Collections from customers are normally 70 per cent in the month of sale, 20 per cent in the month following sale, and 9 per cent in the second month following the sale. The balance is expected to be uncollectible. Projected Purchases • Purchase price is RM18 per unit. • All frames purchases are on account. 70 per cent of the frames purchased are paid for in the month of purchase; the remaining 30 per cent are paid for in the month after acquisition. • Inventory of frames on 1st July is 1,200 units. The frames inventory at the end of each month equals 20 per cent of sales anticipated for the following month. • The company purchases the frames as needed in multiple quantities of 1,000 units per shipment. Operating Expenses • General and administrative expenses are projected to be RM33,000 for the quarter. The breakdown of these expenses is presented in the following schedule. All cash expenditures will be paid uniformly throughout the quarter: Promotion RM9,000 Insurance RM12,000 Utilities RM7,500 Depreciation RM4,500 Total RM33,000 Other information • Cash proceeds from sale of old equipment amounted to RM5,000 in the month of August. • Purchase of new equipment amounted to RM50,000 is to be made in the month of September. • Eye Trendy is expected to maintain a minimum cash balance of RM20,000 at all times. If the cash balance is less than RM20,000 at the end of each month, the company borrows amounts necessary to maintain this balance. All amounts are repaid out of the subsequent positive cash flow. • The company’s cash balance on 1st July is RM22,000. Required: a. Prepare the following schedules: (i) Expected cash collections for the sales of frames during the third quarter. Show computations by month and in total for the quarter. (ii) Expected Cash disbursements for the purchases of frames during the third quarter. Show computations by month and in total for the quarter. (iii) Expected Cash balance on 30th September. Show computations by month and in total for the quarter. b. Refer to your answer in requirement (a). Prepare a schedule that shows whether or not the company meets the minimum cash requirement and compute the amount of borrowing required, if any, to maintain the firm’s minimum cash balance. c. How can a company’s board of directors use the different types of budget to influence the future direction of the firm? Please answer point b and c only

Eye Trendy Corporation is a distributor of frames for sunglasses. The company’s controller is currently preparing a budget for the third quarter of the year. The following information is from company’s financial records: Projected Sales July 3,120 units August 2,000 units September 2,640 units October 3,000 units • Selling price is RM25 per unit • Collections from customers are normally 70 per cent in the month of sale, 20 per cent in the month following sale, and 9 per cent in the second month following the sale. The balance is expected to be uncollectible. Projected Purchases • Purchase price is RM18 per unit. • All frames purchases are on account. 70 per cent of the frames purchased are paid for in the month of purchase; the remaining 30 per cent are paid for in the month after acquisition. • Inventory of frames on 1st July is 1,200 units. The frames inventory at the end of each month equals 20 per cent of sales anticipated for the following month. • The company purchases the frames as needed in multiple quantities of 1,000 units per shipment. Operating Expenses • General and administrative expenses are projected to be RM33,000 for the quarter. The breakdown of these expenses is presented in the following schedule. All cash expenditures will be paid uniformly throughout the quarter: Promotion RM9,000 Insurance RM12,000 Utilities RM7,500 Depreciation RM4,500 Total RM33,000 Other information • Cash proceeds from sale of old equipment amounted to RM5,000 in the month of August. • Purchase of new equipment amounted to RM50,000 is to be made in the month of September. • Eye Trendy is expected to maintain a minimum cash balance of RM20,000 at all times. If the cash balance is less than RM20,000 at the end of each month, the company borrows amounts necessary to maintain this balance. All amounts are repaid out of the subsequent positive cash flow. • The company’s cash balance on 1st July is RM22,000. Required: a. Prepare the following schedules: (i) Expected cash collections for the sales of frames during the third quarter. Show computations by month and in total for the quarter. (ii) Expected Cash disbursements for the purchases of frames during the third quarter. Show computations by month and in total for the quarter. (iii) Expected Cash balance on 30th September. Show computations by month and in total for the quarter. b. Refer to your answer in requirement (a). Prepare a schedule that shows whether or not the company meets the minimum cash requirement and compute the amount of borrowing required, if any, to maintain the firm’s minimum cash balance. c. How can a company’s board of directors use the different types of budget to influence the future direction of the firm? You only answer point a.Please answer point b and c.

The answer for A is too long to be update here.You can check in search.

43.   Economists would classify all the following as land except:
a)   2000 acres of virgin land
b)   Crude oil reserves
c)   A hydro electric dam
d)   Iron ore deposits
44.   As a student of economics, when you speak of scarcity, you are referring to the ability of society to:
a)   Employ all of its resources
b)   Consume all that is produced
c)   Satisfy economic wants given scarce resources
d)   Continually make technological advances and increase production
45.   Airlines charge business travelers more than leisure travelers because there is more:
a)   Elastic supply of business travel
b)   Inelastic supply of business travel
c)   Elastic demand for business travel
d)   Inelastic demand for business travel
46.   For which product is the income elasticity of demand most likely to be negative:
a)   Computer software
b)   Used clothing
c)   Basketballs
d)   Bread
47.   For which product is the income elasticity of demand most likely to be positive: a) Re-treaded tires
b)   Cabbage
c)   Used clothing
d)   Computers
48.   A study reported that the coefficient of the cross elasticity of popcorn and potato chips is positive. Based on this report, you can conclude that popcorn and potato chips are: a) Normal goods
b)   Complementary goods
c)   Independent goods
d)   Substitute goods

Quantity   Total Utility-
Movies   Total Utility -
Books
1   50   22
2   80   42
3   100   52
4   110   57
5   116   60
6   121   62
7   123   63
Based on the table above:
49.   Suppose the price of Movies is $8 each and price of books is $20 each. If the consumer had $80 to spend, how much of each product should the consumer buy to achieve maximum total utility?
a)   7 movies and 4 books
b)   5 movies and 2 books
c)   4 movies and 2 books
d)   Cannot be determined
50.   If the price of the books fell to $10 and the price of movies stayed the same, he or she would purchase:
a)   The same amount of the two goods
b)   More books and fewer movies
c)   More books and more movies
d)   More books and the same amount of movies