1. Marketing Exam

Describe how live theater could deal with the Intangibility, Inconsistency, Inseparability and Inventory (perishability) of marketing services.

(20 points)

Taking the family to an amusement park has become increasingly costly according to the industry publication Amusement Business, which provides figures on the cost for a family of four to spend the day at one of America’s amusement parks. A random sample of 25 families of four that attended amusement parks yielded the following costs, rounded to the nearest dollar.

Given the cost is normally distributed.

a) Suppose the population standard deviation is $21. Determine a 95% confidence interval for the mean cost of a family of four to spend the day at an American amusement park.

c) What is the margin of error of the 95% confidence interval obtained ?

d) Suppose we want to find a 95% confidence interval with margin of error 0.5. How many samples shall we collect?   

The United States appears at times to have a totally schizophrenic attitude toward protectionism. The United States was the country that proposed the establishment of the World Trade Organization as early as the late 1940s, and was also the only industrialized country that refused to ratify this at that time. The United States has consistently argued on the side of multinational free trade in GATT Rounds, and yet maintains many protectionist laws such as those which reserve oil shipments from Alaska to U.S. flag carriers. How can you explain this apparent lack of national consistency on this issue?

Playland at Pacific National Exhibition is an amusement park offering 31 different rides (including 4 rollercoasters and 1 water ride). The guests who are 48” or taller can go on any ride they want and so they get more value from visiting the park; let us say their individual demand is given by P = 5 – 0.25qO, where P is the price per ride ($ per ride) and qO is the number of the rides (per day) (the subscript O stands for “One Day;” that’s how the park calls its passes for the guests who are 48” or taller). The guests who are under 48” are not allowed on certain rides so they get less value from visiting the park; let us say their individual demand is given by P = 4 – 0.25qJ, where P is the price per ride ($ per ride) and qJ is the number of the rides (per day) (the subscript J stands for “Jr. One Day;” that’s how the park calls its passes for the guests under 48”). Assume it costs the park flat ¢25 per guest to operate a single ride, and it costs the park flat ¢75 to issue a single ticket to a ride. Assume there are 500 guests 48” or taller and 500 guests under 48” on an average day. We can consider Playland a monopolist in Vancouver.

If Playland employed a second-degree price discrimination scheme (single ride tickets are issued, each rider receives a book of tickets [qO or qJ]),

10. what would be the size qO of a package for guests 48” or taller (number of rides with a One Day admission)?

11. what would be the price TO of a package for guests 48” or taller ($ for a One Day admission)?

12. what would be the size qJ of a package for guests under 48” (number of rides with a Jr. One Day admission)?

13. what would be the price TJ of a package for guests under 48” ($ for a Jr. One Day admission)? 14. what is Playland’s profit on an average day ($ per day)? Assume zero fixed cost.

Use the code below as the basis for a hotel reservation system (HRS). The customer calls the hotel front desk to book a room. The front desk is running your software on one of its computers. The basic operations available are:

1. book one room,
2. book two adjoining rooms,
3. list all unoccupied rooms,
4. list all occupied rooms,
5. help lists information about available methods,
6. report percent of hotel rooms that are unoccupied,
7. quit the system (shut the system down).

The people at the front desk choose a particular operation, typically in response to a phone call.

Start by modularizing the existing program code below as follows. Create a method from the welcome message (and call this new method from main). Next, create a method from the end message (and also call it from main). Finally, create a method from the help information (and call from main too).

Now we'll implement the methods of the HRS. A new method, bookOneRoom, should randomly book one room when 'b' or 'B' is pressed. Once a room is chosen, it should call bookARoom to indicate that the room is now booked. A new method, bookTwoRooms, should randomly book two rooms when '2' is pressed. It should call bookARoom (twice). Also, write a method that lists (prints out) the room numbers of all of the unoccupied rooms (when the user presses 'l' - lowercase L). Similarly, write a method that lists (prints out) the room nummbers of all of the occupied rooms (when 'L' is entered). Finally, write a method that reports the percentage of the hotel rooms that are unoccupied. This method should use the existing occupiedCount method.

Note: Every method should be preceeded by a comment that explains what the method does.

Summary of what to submit:

A properly commented, indented, and working program.

/*
file:      HRS.java
author:    < your-name-here >
desc.:     Hotel Reservation System (HRS)
*/
import  java.util.Scanner;

class HRS {

    final static int      N = 101;
    final static boolean  Occupied = true;
    //------------------------------------------------------------
    //program initialization
    static void initialize ( boolean[] rooms ) {
        for (int i=0; i<rooms.length; i++)
            rooms[i] = !Occupied;
    }
    //------------------------------------------------------------
    //book a particular room
    static void bookARoom ( int rm, boolean[] rooms ) {
        assert( rooms[rm] == !Occupied );  //cause boom if bad
        rooms[ rm ] = Occupied;
    }
    //------------------------------------------------------------
    //determine how many rooms are occupied in our hotel
    static int occupiedCount ( boolean[] rooms ) {
        int  count = 0;
        for (int i=1; i<rooms.length; i++) {
            if (rooms[i])    ++count;
        }
        return count;
    }
    //------------------------------------------------------------
    //it all starts here
    public static void main ( String[] args ) {
        //say hello
        System.out.println();
        System.out.println( "Welcome to HRS (Hotel Reservation System)." );
        System.out.println();

        boolean[]  hotel = new boolean[ N ];
        initialize( hotel );
        Scanner  kbd = new Scanner( System.in );
        boolean  timeToQuit = false;
        while (!timeToQuit) {
            //prompt for and read a command
            System.out.print( "HRS --> " );
            String  command = kbd.nextLine();

            //process the command
            if (command.equalsIgnoreCase("q")) {
                timeToQuit = true;
            } else if (command.equals("?")) {
                System.out.println();
                System.out.println( "Enter..." );
                System.out.println( "    2     to book two adjoining rooms" );
                System.out.println( "    b/B   to book a single room" );
                System.out.println( "    l     to list all unoccupied rooms" );
                System.out.println( "    L     to list all occupied rooms" );
                System.out.println( "    h/H/? for help" );
                System.out.println( "    p/P   for percent unoccupied" );
                System.out.println( "    q/Q   to quit" );
                System.out.println();
            } else {
                System.out.println( "    Please enter a valid command." );
            }
        }

        //say goodbye
        System.out.println();
        System.out.println( "Thanks for using HRS!" );
        System.out.println();
    }
}

Pete's Construction acquired new equipment, paid $50,000 down, and signed a 5%, $200,000 note payable. Both the principal and one-year's interest is due one year from the date of purchase. The cost to install the equipment was $4,000; the cost to test it before placing it on-line was $2,000.

Pete's Construction spent $20,000 to train employees on the above new equipment.
Materials, labour and overhead amounted to $400,000 for the construction of a building started and completed in the current year. The building was worth $600,000 at completion and will house the office operations for the company. Total interest cost recognized during the year was $50,000; $35,000 of that amount qualifies to be capitalized to this building. The land on which the building was constructed cost $100,000, also purchased this year.

A second tract of land was acquired as a building site, for $45,000. A second building on this land also was started during the year but not completed. $5,000 was spent for surveying this second land parcel; $30,000 was spent to excavate the foundation of the building; and $8,000 was spent to clear oak trees on the property.

Pete's Construction was assessed $12,000 by the county for sewers and other infrastructure costs for the site of the completed building.

Because there was so much work involved with this project, Pete took his staff out for a celebration lunch for a cost od $1,000.

Required
From the following transaction information for Pete's Construction Inc. for the current year, determine the ending balances for all property, plant and equipment accounts (including construction in progress). Show how you arrived at your answer for each. Ignore amortization, assume there were no beginning balances, and there is no need to show subsidiary accounts or include discussion.

Road Rage, Inc., is in the business of designing, constructing, and inspecting highways. Road Rage has publicly held company and files consolidated financial statements. In 20X1, Road Rage, through its subsidiary, Builders, Inc. (Builders), signed a fixed price contract for the construction of an interstate highway. The project was to be completed three years hence. All of the long-term projects of Builders (greater than one year) are reported on the percentage-of-completion method of accounting

Under the terms of the contract, Builders was to provide all the necessary equipment, machinery, and materials. However, the contract gave the owner of the project the option to furnish some of the necessary items itself and to reduce the contract costs and gross margin appropriately. The contract required Builders to obtain property and personal injury liability insurance. In addition, the contract the owner of the project.

Builders recognized income in each of the first two years of the contract based on the following formula: Fixed contract price Total costs of construction Total estimated gross profit Estimated percentage of work completed Year-to-date gross profit Prior year-to-date gross profit. Actual Costs for period Income recognized in current period Total costs of construction were based on the following:

1. Direct material

2. Direct labor

3. Overhead costs

4. Equipment design allowance: anticipated routine design changes in the development process and 5. Conceptual design allowance: normal growth during the engineering design phase (15 percent of material and labor costs)

6. Construction quantity allowance material and labor associated with anticipated concrete waste and overpour, piping drop-offs and waste, insulation fabrication cut-offs, and other damages (5 percent of construction activity accounts)

7. Escalation allowance: cost increases due to anticipated inflation (12 percent of equipment costs plus 15 percent of construction activity accounts

8. Contingency allowance: unforeseeable costs due to human error in the estimation process (2.9 percent of base costs of construction)

9. Risk allowance costs of unforeseeable events such as labor disputes, unusually bad weather, runaway inflation, or changes in governmental regulations (4 percent of base cost of contract)

The base cost of the contract included items 1 through 3 above. Items 4 through 7 were identified with particular items of work

Road Rage did not bid for the contract for this project and therefore, represents that it would not inflate projected costs unnecessarily. Builders has only constructed one bridge prior to this contract. All of the allowances in the estimated contract costs are within the normal industry standards.

Questions:

1. Is Builders' method of recognizing income for the current period correct?

2. If the original estimates for costs are as follows, what was the original total estimated cost of construction?

$5,000,000 - Direct Material

10,000,000 - Direct Labor

2,000,000   - Overhead Costs

Equipment costs are included in direct materials; they represent 40 percent of the total (without regard to allowances), construction activity is the sum of direct material and direct l           abor (without regard to allowances)

3. If the original gross profit margin was to be 15 percent, what was the original contract price?

4. Using your answers to questions 3 and 4 above, what was the income recognized by Builders in both Years One and Two, using the formula in the facts? At the end of Years One and Two, the company represented that it was 50 percent and 75 percent finished with the work, respectively, and had expended $4,509,596 and $2,221,144, respectively.

5. Can all of the above costs be properly included in the total estimated gross-profit calculation? Why or why not?

7. Year Three, after the financial statements for Year Two were issued, it was discovered that the owner of the project provided a substantial amount of the required items in accordance with the owner's option in the contract. It was determined that the owner provided items amounted to 57 percent of the corrected contract cost. The owner will not be providing any more items in Year Three. (Hint Before applying the owner-provided options to the contract cost, remove the effects of Contingency and Risk Allowances.)

Using Builders' formula for calculating the income recognized, calculate the income Builders should have reported in Years One and Two, assuming the work was 50 percent complete in Year One and 75 percent complete in Year Two, and that Year One and Two expenses were $4,509,596 and $2,221,144, respectively.

8. Using your answers to questions 5 and 7 answer the following questions - What is the overstatement of income recognized at the end of Year One?

b. What is the overstatement of income recognized at the end of Year Two?

9. Assuming this is Builders' only project, and based on your answers to question 8, what is the anticipated net income Builders will recognize in Year Three (using Road Rage's method of reporting income recognition) (Hint: Adjust the gross income for the overstatement of income recognized in Years One and Two.)

10. What should management and the auditors have done to recognize that the income in Years One and Two was substantially overstated?

11. Was the management of Builders fairly accurate in estimating work completed? Why or why not?

A political candidate is anxious about the outcome of the election. Complete parts​ (a) and​ (b) below.

a) To have his next survey result produce a 95% confidence interval with a margin of error of no more than 0.034 how many eligible voters are needed in the​ sample?

(b) If the candidate fears that​ he's way behind and needs to save​ money, how many voters are needed if he expects that his percentage among voters p is near 0.25?