CASE #1: COCA COLA
The Coca-Cola company started 110 years ago as a small, insignificant one man business. Since then, it has grown into one of the largest companies in the world. The first chairman of the company was Dr. John Pemberton and the current chairman is Muhtar Kent. The demand for this product has made this company into a 50 billion dollar business.
Coca-Cola was invented by Dr. John Pemberton, an Atlanta pharmacist. He concocted the formula in a three legged brass kettle in his backyard on May 8, 1886 by mixing lime, cinnamon, coca leaves, and the seeds of a Brazilian shrub. (Things Go Better With Coke 14). Coca-Cola, as he called the beverage, made its debut in Atlanta's largest pharmacy, Jacob's Pharmacy, as a five cent non- carbonated drink. Later on, the carbonated water was added to the syrup to make the beverage that we know today.
Coca-Cola was named by Frank Robinson, one of Pemberton's close friends. Pemberton, in a state of poor health and in debt, was forced to sell a portion of the company to Asa Candler. In time, Candler acquired the whole company for $2,300.
Candler achieved a lot during his time as owner of the company. On January 31,
1893, the famous Coca-Cola formula was patented. He aggressively advertised Coca-Cola in newspapers and on billboards. In the newspapers, he would give away coupons for a free Coke at any fountain. Coca-Cola was sold to Ernest Woodruff in 1919 for 25 million dollars. He gave control of Coca-Cola to his son, Robert Woodruff, who would be president for six decades.
Woodruff introduced the six bottle carton in 1923. He also made Coca-Cola available through vending machines in 1929. That same year, the iconic Coca- Cola bell glass was made available. He started advertising on the radio in the 1930s and on television in 1950.
Currently Coca-Cola is advertised on over five hundred TV channels around the world. Often considered the best known trademark in the world, Coca-Cola is sold in about one hundred and forty countries to 5.8 billion people in eighty different languages. This is why Coca-Cola is the largest soft drink company in the world. Coca-Cola is worth more than 58 billion dollars on the stock market (Coca-Cola, The Coca-Cola Company 232).
For more than 65 years, Coca-Cola has been a sponsor of the Olympics. One way to see all of the achievements of the Coca- Cola company is to visit the World of Coke in Atlanta. It houses a collection of memorabilia, samples of the products, exhibits, and many other interesting items.
Cost of production of coke is very low because it is nothing but water mixed with some sweetener and color. Demand for coke is growing. Rich and poor, young and old, everyone likes Coca Cola.
CASE #2: EXXON MOBIL CORPORATION
Over the last 125 years ExxonMobil has evolved from a regional marketer of kerosene in the U.S. to the largest publicly traded petroleum and petrochemical enterprise in the world. Today it operates in most of the world's countries and is best known by the familiar brand names: Exxon, Esso and Mobil. The company makes the products that drive modern transportation, power cities, lubricate industry and provide petrochemical building blocks that lead to thousands of consumer goods.
Exxon Mobil Corporation engages in the exploration and production of crude oil and natural gas, and manufacturing of petroleum products, as well as transportation and sale of crude oil, natural gas, and petroleum products. The company manufactures and markets petrochemicals, including olefins, aromatics, polyethylene and polypropylene plastics, and other specialty products. It also has interests in electric power generation facilities.
As of December 31, 2011, the company operated 37,692 gross and 31,683 net operated wells. Exxon Mobil Corporation has a strategic agreement with the Rosneft Oil Company for investment into oil and gas fields in the Russian
Federation. The company has operations in the United States, Canada, South America, Europe, Africa, Asia, and Australia/Oceania. Exxon Mobil Corporation was incorporated in 1882 and is based in Irving, Texas.
Finding, drilling, refining, shipping and selling to customers all contribute to the cost of gasoline. It is costly to produce and supply.
Gasoline is the main product that Exxon Mobil markets throughout the world, and is very important for the modern world. In addition to being used by cars, trucks, tractors, ships, planes, and many other vehicles, it is also used to run many mills and factories, and in many power plants to generate electricity. We know that we have limited supplies of oil and one day we shall run out of the gasoline derived from it. Yet, we pay roughly the same price for a liter of gasoline as we pay for a liter of coca cola.
As far as demand for petrol goes, most of the petrol is used to run cars. In order to own and run a car there are some restrictions. A driver has to be an adult and must have a driving license. Petrol is also sold from specially designed petrol pumps which are costly to build and operate. In contrast, Coke is sold everywhere and can be bought by anyone. One does not have to be an adult or owner of a car to buy coke.
Comparative Questions
What is the price elasticity of demand for gasoline? Is it elastic or inelastic? How about carbonated beverages?
What is the Income Elasticity of demand for carbonated beverages and gasoline? Which one has the higher elasticity?
In: Economics
prepare the following journal entries:
1) The company sold (5) payroll service packages, covering 6 months of fully automated payroll service for $6,000 each. The regular price was $6,500 each, but the customers received a discount for paying for the service up front. Each company will receive 2 payroll runs per month. One on the 15th and one on the 30th of each month.
2) The company provided $5,600 of tax consulting services to clients on account.
3) The company ran its first payroll service for two of the companies. The other three companies were not yet ready to begin running payroll.
4) The company paid $2,100 cash for two weeks salary earned by two employees.
5) The company purchased $950 for October advertising on account.
6) The company provided $8,200 of tax services to clients and received payment.
7) The company paid a $687 electic bill for October utilities.
8) The company collected $2,000 from clients that were provided service on account on the 13th.
9) The company paid 1/2 of the bill for paper and supplies that was purchased on the 8th.
10) The company paid $2,100 cash for two weeks salary earned by two employees.
11) The company ran payroll service for all five companies that purchased service in October. 30 The company paid dividends of $700.
12) An employee and received a $300 advance for November travel for the company.
In: Accounting
A suburban hotel derives its revenue from its hotel and restaurant operations. The owners are interested in the relationship between the number of rooms occupied on a nightly basis and the revenue per day in the restaurant. Below is a sample of 25 days (Monday through Thursday) from last year showing the restaurant income and number of rooms occupied.
| Day | Revenue | Occupied | Day | Revenue | Occupied | ||||||||
| 1 | $ | 1,452 | 65 | 14 | $ | 1,425 | 31 | ||||||
| 2 | 1,361 | 20 | 15 | 1,445 | 51 | ||||||||
| 3 | 1,426 | 21 | 16 | 1,439 | 62 | ||||||||
| 4 | 1,470 | 50 | 17 | 1,348 | 45 | ||||||||
| 5 | 1,456 | 70 | 18 | 1,450 | 41 | ||||||||
| 6 | 1,430 | 23 | 19 | 1,431 | 62 | ||||||||
| 7 | 1,354 | 30 | 20 | 1,446 | 47 | ||||||||
| 8 | 1,442 | 21 | 21 | 1,485 | 43 | ||||||||
| 9 | 1,394 | 15 | 22 | 1,405 | 38 | ||||||||
| 10 | 1,459 | 36 | 23 | 1,461 | 36 | ||||||||
| 11 | 1,399 | 41 | 24 | 1,490 | 30 | ||||||||
| 12 | 1,458 | 35 | 25 | 1,426 | 65 | ||||||||
| 13 | 1,537 | 65 | |||||||||||
Choose the scatter diagram that best fits the data.
| Scatter diagram 1 | Scatter diagram 2 | Scatter diagram 3 |
Scatter diagram 1
Scatter diagram 2
Scatter diagram 3
Determine the coefficient of correlation between the two variables. (Round your answer to 3 decimal places.)
Pearson correlation _____
c-1. State the decision rule for 0.01 significance level: H0: ρ ≤ 0; H1: ρ > 0. (Round your answer to 3 decimal places.)
Reject H0 if T> _____
c-2. Compute the value of the test statistic. (Round your answer to 2 decimal places.)
Value of the test statistic _________
c-3. Is it reasonable to conclude that there is a positive relationship between revenue and occupied rooms? Use the 0.01 significance level.
______ H0, it ______ reasonable to conclude that there is a positive relationship between revenue and occupied rooms.
What percent of the variation in revenue in the restaurant is accounted for by the number of rooms occupied? (Round your answer to 1 decimal place.)
_____ % of the variation in revenue is explained by variation occupied rooms.
In: Statistics and Probability
Use the “home” data to build a regression model that predicts market as a function of square feet. Give a 99% confidence interval for the value of one square foot. (select the closest answer)
| Home Market Value | ||
| House Age | Square Feet | Market Value |
| 33 | 1,812 | $90,000.00 |
| 32 | 1,914 | $104,400.00 |
| 32 | 1,842 | $93,300.00 |
| 33 | 1,812 | $91,000.00 |
| 32 | 1,836 | $101,900.00 |
| 33 | 2,028 | $108,500.00 |
| 32 | 1,732 | $87,600.00 |
| 33 | 1,850 | $96,000.00 |
| 32 | 1,791 | $89,200.00 |
| 33 | 1,666 | $88,400.00 |
| 32 | 1,852 | $100,800.00 |
| 32 | 1,620 | $96,700.00 |
| 32 | 1,692 | $87,500.00 |
| 32 | 2,372 | $114,000.00 |
| 32 | 2,372 | $113,200.00 |
| 33 | 1,666 | $87,500.00 |
| 32 | 2,123 | $116,100.00 |
| 32 | 1,620 | $94,700.00 |
| 32 | 1,731 | $86,400.00 |
| 32 | 1,666 | $87,100.00 |
| 28 | 1,520 | $83,400.00 |
| 27 | 1,484 | $79,800.00 |
| 28 | 1,588 | $81,500.00 |
| 28 | 1,598 | $87,100.00 |
| 28 | 1,484 | $82,600.00 |
| 28 | 1,484 | $78,800.00 |
| 28 | 1,520 | $87,600.00 |
| 27 | 1,701 | $94,200.00 |
| 28 | 1,484 | $82,000.00 |
| 28 | 1,468 | $88,100.00 |
| 28 | 1,520 | $88,100.00 |
| 27 | 1,520 | $88,600.00 |
| 27 | 1,484 | $76,600.00 |
| 28 | 1,520 | $84,400.00 |
| 27 | 1,668 | $90,900.00 |
| 28 | 1,588 | $81,000.00 |
| 28 | 1,784 | $91,300.00 |
| 27 | 1,484 | $81,300.00 |
| 27 | 1,520 | $100,700.00 |
| 28 | 1,520 | $87,200.00 |
| 27 | 1,684 | $96,700.00 |
| 27 | 1,581 | $120,700.00 |
In: Statistics and Probability
Use the “home” data to build a regression model that predicts market as a function of square feet. Is the coefficient for square feet significant at a .05 level?
| Home Market Value | ||
| House Age | Square Feet | Market Value |
| 33 | 1,812 | $90,000.00 |
| 32 | 1,914 | $104,400.00 |
| 32 | 1,842 | $93,300.00 |
| 33 | 1,812 | $91,000.00 |
| 32 | 1,836 | $101,900.00 |
| 33 | 2,028 | $108,500.00 |
| 32 | 1,732 | $87,600.00 |
| 33 | 1,850 | $96,000.00 |
| 32 | 1,791 | $89,200.00 |
| 33 | 1,666 | $88,400.00 |
| 32 | 1,852 | $100,800.00 |
| 32 | 1,620 | $96,700.00 |
| 32 | 1,692 | $87,500.00 |
| 32 | 2,372 | $114,000.00 |
| 32 | 2,372 | $113,200.00 |
| 33 | 1,666 | $87,500.00 |
| 32 | 2,123 | $116,100.00 |
| 32 | 1,620 | $94,700.00 |
| 32 | 1,731 | $86,400.00 |
| 32 | 1,666 | $87,100.00 |
| 28 | 1,520 | $83,400.00 |
| 27 | 1,484 | $79,800.00 |
| 28 | 1,588 | $81,500.00 |
| 28 | 1,598 | $87,100.00 |
| 28 | 1,484 | $82,600.00 |
| 28 | 1,484 | $78,800.00 |
| 28 | 1,520 | $87,600.00 |
| 27 | 1,701 | $94,200.00 |
| 28 | 1,484 | $82,000.00 |
| 28 | 1,468 | $88,100.00 |
| 28 | 1,520 | $88,100.00 |
| 27 | 1,520 | $88,600.00 |
| 27 | 1,484 | $76,600.00 |
| 28 | 1,520 | $84,400.00 |
| 27 | 1,668 | $90,900.00 |
| 28 | 1,588 | $81,000.00 |
| 28 | 1,784 | $91,300.00 |
| 27 | 1,484 | $81,300.00 |
| 27 | 1,520 | $100,700.00 |
| 28 | 1,520 | $87,200.00 |
| 27 | 1,684 | $96,700.00 |
| 27 | 1,581 | $120,700.00 |
In: Statistics and Probability
A normally distributed population has a mean of 71 and a
standard deviation of 15. Determine the probability that a random
sample of size 37 has an average between 74 and 78.
Round to four decimal places.
In: Statistics and Probability
The length of time needed to complete a certain test is normally distributed with mean 77 minutes and standard deviation 11 minutes. Find the probability that it will take between 74 and 80 minutes to complete the test.
In: Statistics and Probability
Case 2: Manufacturing & Contract Modifications
Dell Computer, computer manufacturer, enters into contract with UPM to deliver 300 computers for total price of RM600,000 (RM2,000 per computer).
Due to necessary preparation works, UPM agrees to deliver computers in 3 separate deliveries during the forthcoming 3 months (100 computers in each delivery). UPM takes control over the computers at delivery.
After the first delivery is made, UPM and Dell Computer amend the contract. Dell Computer will supply 200 additional computers (500 in total).
How should Dell Computer account for the revenue from this contract for the year ended 31 December 20X1 if:
As of 31 December 20X1, Dell Computer delivered 400 computers (300 as agreed initially and 100 under the contract amendment).
In: Accounting
Do you think it’s harder to manage
OR
In: Computer Science
just want to talk about three questions managers should answer when setting regular prices are:
What is the company’s target profit?
How much will customers pay?
Is the company a price-taker or a price-setter for this product or service?
In: Accounting