Longstreet died, leaving an insurance policy to his heir, Stuart. The contract provides that the beneficiary can choose any one of the following four options:

1. A) $550,000 immediate cash

2. B) $40,000 every three months, payable at the end of each quarter for five years

3. C) $180,000 immediate cash and $18,000 every three months for ten years, payable at the beginning of each

   three-month period

4. D) $40,000 every three months for three years and $15,000 each quarter for the following twenty-three

   quarters, all payments payable at the end of each quarter.

Stuart has come to you to ask for assistance and your advice. If money is discounted at a rate of 8% annually, which option would you recommend (in terms of pure value calculation)?

Calculating Cycle Time and Velocity

Indy Company has the following data for one of its manufacturing plants:

Maximum units produced in a quarter (3-month period): 250,000 units

Actual units produced in a quarter (3-month period): 199,000 units

Productive hours in one quarter: 25,000 hours

Required:

1. Compute the theoretical cycle time (in minutes).
minutes per unit

2. Compute the actual cycle time (in minutes). Round your answer to two decimal places.
minutes per unit

3. Compute the theoretical velocity in units per hour.
units per hour

4. Compute the actual velocity in units per hour. Round your answer to two decimal places.
units per hour

Nelson, Inc. hedges 50% of their translation exposure one calendar quarter in advance, and rolls the contracts when they mature. Currently 1^st quarter net income is projected to be 125 million Canadian dollars. The current spot rate is .98 US dollars per Canadian dollar, and the forward rate to March 31, 2011, the end of 1^st quarter, is .987 US dollars per Canadian dollar. On 3/31/2011 the spot rate is now 1.045 US dollars per Canadian dollar.

(a) Explain how you would put in place a hedge on 50% of the forecasted net income.

(b) On 3/31 what do you now need to do?

(c) What is your total translated net income from the Canadian subsidiary including the impact of the hedge on 3/31/2011?

Warrier Gear manufactures clothing. A flannel shirt requires the following:

Standard Direct Materials 2 square yards at $15 per yard

Standard Manufacturing Labor 1.5 hours at $25 per hour

During the third quarter, the company made 1,500 shirts and used 3,200 square yards of fabric costing $44,800. Direct labor totaled 2,100 hours for $56,700.

Required:

(A) Compute the direct materials price and efficiency variances for the quarter. Show all computations.

(B) Compute the direct manufacturing labor price and efficiency variances for the quarter. Show all computations.

(C) Describe 2 possible reasons for each of the following variances direct materials price variance, direct materials efficiency variance, direct manufacturing labor price variance, and direct manufacturing efficiency variance.

Gaus-Jordan Elimination:

A glass of skim milk supplies 0.1 mg of iron, 8.5 g of protein, and 1 g of carbohydrates. A quarter pound of lean red meat provides 3.4 mg of iron, 22 g of protein, and 20 g of carbohydrates. Two slices of whole-grain bread supply 2.2 mg of iron, 10 g of protein, and 12 g of carbohydrates. If a person on a special diet must have 22.9 mg of iron, 173.5 g of protein, and 131 g of carbohydrates, how many glasses of skim milk, how many quarter-pound servings of meat, and how many two-slice servings of whole-grain bread will supply this?

Preparing production and mfg. budgets

Black Diamond co produces snow skis. Each ski requlires 2 pounds of carbon fiber. Teh co. mangement predicts that 5000 skis and 6000 poiunds of carbon fiber will be ininvenotry of jun 30 of the cureent year andthat 150,000 skis will be sold during the next ( third ) quarter . A set of two skis sells for 300. Management wants to end the quarter with 3500 skis and 4000 pounds of carbon fiber in inventory. Carbon fiber can be purchasedd fo 15 per poiund. Each ski requires .5 hours of dircet labor at 20 per hour. Variable overhead is applies at the rate of 8 per direct labor hour. The company budgets fixed overheaddof 1,782,000 for quarter.

Make a direct materials budget for carbon

Analyze the Sales Budget your team has created. Based on the projected revenue numbers within the quarterly data given, determine approximately how many new airplanes will be needed to generate the necessary revenue on an annualized basis. The industry uses Passenger Seat Miles as a measure of revenue. Current data fm the industry shows revenue per Passenger Seat Mile is 16 cents. ExpressJet believes that their revenue will go up by one cent per month during the quarter. An average plane flies 52,500,000 miles a year and will last 30 years. Complete a 2 to 3 page memo to the management of ExpressJet explaining your analysis of their asset needs.

Homework problem to study for quiz Friday.

1. The # of units to be produced annually: 200,000 tins
Direct labor: 1 hour per 100 tins
Variable overhead costs per direct labor hour:
Indirect materials amount to $2.05
Indirect labor $1.20
Utilities $9.25
Maintenance $3.50
Fixed overhead costs per quarter:
Insurance $3,000
Depreciation $2,000
Rent $12,000

a. Calculate the budgeted total manufacturing overhead for the year.

b. Sales are 60,000 tins per quarter
Variable costs per dollar of sales: sales commissions 5%, delivery expense .5%, and advertising 1.5%.
Fixed costs per quarter: sales salaries $40,000, office rent $1,500, utilities $1,200, and repairs expense $200.
Selling price: $10 per tin

Calculate the budgeted total selling and administrative expenses for the quarter.

c. Sales are 30% cash and 70% on credit. Credit sales are collected 10% in the month of sale, 50% in the month following sale, and 36% in the second month following sale. Sales were December $180,000; January $220,000; February $250,000; and March $300,000.

Calculate the total cash received in March.