Kitchen Supply, Inc. (KSI), manufactures three types of flatware: institutional, standard, and silver. It applies all indirect costs according to a predetermined rate based on direct labor-hours. A consultant recently suggested that the company switch to an activity-based costing system and prepared the following cost estimates for year 2 for the recommended cost drivers.

In addition, management estimated 7,100 direct labor-hours for year 2.

Assume that the following cost driver volumes occurred in January, year 2.

Actual labor costs were $16 per hour.

Required:

a.

(1) Compute a predetermined overhead rate for year 2 for each cost driver using the estimated costs and estimated cost driver units prepared by the consultant.
(2) Compute a predetermined rate for year 2 using direct labor-hours as the allocation base.

Processing orders: Rate per order?

Setting up Production: Rate per run?

Handling Materials: Rate per pound?

Using Machines: Rate per machine hour?

Performing Quality Control: Rate per Inspection?

Packing: Rate per unit?

a2. Predetermined Rate per direct labor-hour?

b. Compute the production costs for each product for January using direct labor-hours as the allocation base and the predetermined rate computed in requirement a(2).

Direct Labor for: Institutional? Standard? Silver?

Indirect Costs for: Instituional? Standard? Silver?

c. Compute the production costs for each product for January using the cost drivers recommended by the consultant and the predetermined rates computed in requirement a. (Note: Do not assume that total overhead applied to products in January will be the same for activity-based costing as it was for the labor-hour-based allocation.)

Institutional Standard Silver

Direct Labor?

Processing Orders?

Setting up Production?

Handling Materials?

Using Machines?

Performing Quality Control?

Packing?

The height of a type of bean plants is determined by five unlinked genes called A, B, C, D, and E. Each gene has two alleles: additive (uppercase letter) and nonadditive (lowercase letter).

How many phenotypic classes would you expect?

The shortest plants are 130 cm. The tallest plants are 220 cm. Estimate how many centimeters each allele contributes to the height difference.

The genotypes are known for two bean plants. Plant 1 is genotype AABbccDdEE. Plant 2 is genotype aaBBCcDdEE. What are their heights?

If the two plants from above are crossed, what is the probability they will produce a plant that is taller than either parent?

3You also have been asked to determine at both the 5% and 10% levels of significance whether the proportion of the population of universities that offers more than 50% of their student body some sort of financial aid is different from 40%. You select a random sample of universities from the population. The sample data concerning whether the university offers more than 50% of its students some form of financial aid is shown below. Answer the question posed above at each of the stated levels of significance based upon the sample data given in appendix two. If you arrive at different results for the two different parts of this problem, provide a reason for that difference. Appendix Two: University offers more than 50% of its students financial aid? (Y = yes, N = no)

Y         N         Y         Y         N         Y         N         N         N         Y         Y        

N         N         Y         Y         Y         N         N         Y         N         N         N        

N         Y         Y         Y         N         Y         Y         N         Y         N         Y

Y         N         Y         Y         Y         Y         Y         N         N         N         Y

N         Y         N         N         N         N         Y         Y         N         Y         Y

Y         Y         Y         N         Y         Y         Y         Y         N         N         Y

Econo-cool air conditioners cost $300 to purchase, result in electricity bills of $150 per year, and last for 5 years. Luxury Air models cost $500, result in electricity bills of $100 per year, and last for 8 years. The discount rate is 21 percent.

a. What are the equivalent annual costs of the Econo-cool and Luxury Air models? Which model is more cost effective?
b. Now you remember that the inflation rate is expected to be 10 percent per year for the foreseeable future. How does the inflation rate affect the evaluation of the two air conditioners?

Managers of Coronado Embroidery have decided to purchase a new monogram machine and are considering two alternative machines. The first machine costs $114,000 and is expected to last five years. The second machine costs $182,000 and is expected to last eight years. Assume that the opportunity cost of capital is 8 percent. What is the equivalent annual cost for each system? (Do not round intermediate calculations. Round final answers to 2 decimal places, e.g. 2.75.) Equivalent Annual Cost First machine $ Second machine $ Which machine should Coronado Embroidery purchase? Coronado Embroidery should purchase the machine.

Activity-Based Customer Costing

Deeds Company sells custom-made machine parts to industrial equipment manufacturers by bidding cost plus 40 percent, where cost is defined as manufacturing cost plus order processing cost. There are two types of customers: those who place small, frequent orders and those who place larger, less frequent orders. Cost and sales information by customer category is provided below.

Order-filling capacity is purchased in steps (order-processing clerks) of 1,000, each step costing $45,000; variable order-filling activity costs are $35 per order. The activity capacity is 45,000 orders; thus, the total order-filling cost is $3,449,500 [(45 steps × $45,000) + ($35 × 40,700)]. Current practice allocates ordering cost in proportion to the units purchased.

Deeds recently lost a bid for 100 units. (The per-unit bid price was $2 per unit more than the winning bid.) The manager of Deeds was worried that this was a recurring trend for the larger orders. (Other large orders had been lost with similar margins of loss.) No such problem was taking place for the smaller orders; the company rarely lost bids on smaller orders.

Required:

1. Calculate the unit bid price offered to Deeds’s customers assuming that order-filling cost is allocated to each customer category in proportion to units sold. Note: Do not round interim calculations. Round your final answer to the nearest cent.
$

2. Assume that a newly implemented ABC system concludes that the number of orders placed is the best cost driver for the order-filling activity. Assign order-filling costs using this driver to each customer type and then calculate the new unit bid price for each customer type. Note: Do not round interim calculations. Round the final order cost allocation to the nearest whole dollar. Round final bid prices to the nearest cent.

Using this new price, would Deeds have won the bid for the units recently lost?

24.Rolling Die Two dice are rolled. Find the probability of getting

a.A sum of 8, 9, or 10

b.Doubles or a sum of 7

c.A sum greater than 9 or less than 4

d.Based on the answers to a, b, and c, which is least likely to occur?

Loan Amortization

Your company is planning to borrow $1.5 million on a 7-year, 8%, annual payment, fully amortized term loan. What fraction of the payment made at the end of the second year will represent repayment of principal? Round your answer to two decimal places.

1,Which of the following imaging procedures is used to inspect a patient's veins?

2.Which of the following is known as bad cholesterol that should not be higher than 100?

3.Hypertension causes the heart to work harder, which causes hypertrophy of the heart.

4. BLANK describes the accumulation of plaque on the walls of the arteries.

A.Phlebitis

B.Aneurysm

C.Atherosclerosis

5.

6.

7.

8. A(An) BLANK angina occurs without exertion and feels unlike any chest pain felt before. This pain can last up to a half-hour and does not go away with medicine.

A.stable

B.unstable

C.variant

9. Rheumatic heart disease can result from an untreated BLANK bacterial infection.

A. pseudomonas auriginosa

B.streptococcus

C.helicobacter pylori bacteria

10.Which of the following cardiomyopathy conditions is present when the left and right ventricles have become stiff?

A customized option on a stock pays the option holder (S - K)^2 where S is the

stock price at maturity, one week from now, and K is $54. The current stock price is $50.

There are only two possibilities one week from now, that the stock is $59 with probability

70%, or that it's $47 with probability 30%. Taking dividends and interest rates to both

be zero, compute the price of this derivative using a one-step binomial tree. Compute the

derivative price two ways:

1) by setting up a delta-hedged portfolio and working out the cost

2) by determining risk-neutral probabilities and applying them.