A student researcher compares the heights of American students and non-American students from the student body of a certain college in order to estimate the difference in their mean heights. A random sample of 12 American students had a mean height of 67.7 inches with a standard deviation of 3.06 inches. A random sample of 17 non-American students had a mean height of 64.7 inches with a standard deviation of 1.97inches. Determine the 90% confidence interval for the true mean difference between the mean height of the American students and the mean height of the non-American students. Assume that the population variances are equal and that the two populations are normally distributed.
Step 3 of 3 :
Construct the 90%90% confidence interval. Round your answers to two decimal places.
In: Statistics and Probability
The partial shareholders’ equity section of Getz Inc. as at December 31, 20x4 is as follows: Common shares, 500,000 shares outstanding $6,500,000 Preferred shares, $6, 20,000 shares outstanding 2,000,000 Retained earnings 1,900,000 The preferred share dividends were last declared on December 31, 20x1. There were no issue or repurchase of preferred shares during the year ended December 31, 20x5. On December 15, 20x5 the board of directors declared a total dividend of $1,000,000. Required – How much dividends will be declared to common and preferred shareholders under the following assumptions:
a. The preferred shares are non-cumulative and non-participating.
b. The preferred shares are cumulative and non-participating.
c. The preferred shares are cumulative and fully participating
In: Accounting
A student researcher compares the heights of American students and non-American students from the student body of a certain college in order to estimate the difference in their mean heights. A random sample of 17 American students had a mean height of 70 inches with a standard deviation of 2.87 inches. A random sample of 12 non-American students had a mean height of 65.1 inches with a standard deviation of 2.68 inches. Determine the 90% confidence interval for the true mean difference between the mean height of the American students and the mean height of the non-American students. Assume that the population variances are equal and that the two populations are normally distributed. Step 1 of 3 : Find the point estimate that should be used in constructing the confidence interval.
In: Statistics and Probability
1. CPK and SGOT tests are used in the diagnosis of myocardial infarction (MI). When the CPK test is given to a patient who does not have a MI, the probability of a negative finding (i.e. its specificity) is 0.6. The probability that the SGOT test will be negative for a non-MI patient is 0.7. When both tests are given to a non-MI patient the probability that at least one is negative is 0.9. For a non-MI patient who has both tests:
Hints: (1) Answer is not 0.12 -- tests are not to be assumed to be independent.
(2) Using 2-by-2 table to structure your calculations can help.
In: Math
Recent incidents of food contamination have caused great concern among consumers. An article reported that 31 of 80 randomly selected Brand A brand chickens tested positively for either campylobacter or salmonella (or both), the leading bacterial causes of food-borne disease, whereas 64 of 80 Brand B brand chickens tested positive.
(a)
Does it appear that the true proportion of non-contaminated Brand A chickens differs from that for Brand B? Carry out a test of hypotheses using a significance level 0.01. (Use p1 for Brand A and p2 for Brand B.)
State the relevant hypotheses.
H0: p1 −
p2 = 0
Ha: μ1 −
μ2 > 0H0:
p1 − p2 = 0
Ha: p1 −
p2 <
0 H0:
p1 − p2 > 0
Ha: p1 −
p2 = 0H0:
p1 − p2 < 0
Ha: p1 −
p2 = 0H0:
p1 − p2 = 0
Ha: p1 −
p2 ≠ 0
Calculate the test statistic and P-value. (Round your test statistic to two decimal places and your P-value to four decimal places.)
z=P-value=
State the conclusion in the problem context.
Reject H0. The data does not suggest the true proportion of non-contaminated chickens differs for the two companies.Reject H0. The data suggests that the true proportion of non-contaminated chickens differs for the two companies. Fail to reject H0. The data suggests the true proportion of non-contaminated chickens differs for the two companies.Fail to reject H0. The data does not suggest that the true proportion of non-contaminated chickens differs for the two companies.
(b)
If the true proportions of non-contaminated chickens for the Brand A and Brand B are 0.50 and 0.25, respectively, how likely is it that the null hypothesis of equal proportions will be rejected when a 0.01 significance level is used and the sample sizes are both 100? (Round your answer to four decimal places.)
In: Statistics and Probability
Pareto Chart and A report summarizing the costs, percent of total, and percent of sales by appraisal, prevention, internal failure, and external failure cost of quality categories.Cost of Quality Report for a Manufacturing Company
The president of Mission Inc. has been concerned about the growth in costs over the last several years. The president asked the controller to perform an The study of employee effort and other business records to determine the cost of activities.activity analysis to gain a better insight into these costs. The result of the activity analysis is summarized as follows:
Required:
1. Classify the activities into prevention, appraisal, internal failure, external failure, and not costs of quality (producing product). Classify the activities into value-added and non-value added activities.
| Activity | Activity Cost | Cost of Quality Classification | VA/NVA | |
| Correcting invoice errors | $19,080 |
|
|
|
| Disposing of incoming materials with poor quality | 15,900 |
|
|
|
| Disposing of scrap | 41,340 |
|
|
|
| Expediting late production | 34,980 |
|
|
|
| Final inspection | 22,260 |
|
|
|
| Inspecting incoming materials | 6,360 |
|
|
|
| Inspecting work in process | 34,980 |
|
|
|
| Preventive machine maintenance | 22,260 |
|
|
|
| Producing product | 104,940 |
|
|
|
| Responding to customer quality complaints | 15,900 |
|
|
|
| Total | $318,000 |
2. On paper or in a spreadsheet program, prepare a Pareto chart for each of the activities listed above. Answer the following:
What type of chart is a Pareto chart?
Which activity appears first, in order from left to
right?
3. Use the activity cost information to determine the percentages of total department costs that are prevention, appraisal, internal failure, external failure, and not The cost associated with controlling quality (prevention and appraisal) and failing to control quality (internal and external failure)costs of quality. If required, round percentages to one decimal place.
| Quality Cost Classification |
Activity Cost |
Percent of Total Department Cost |
||
| Prevention | $ | % | ||
| Appraisal | % | |||
| Internal failure | % | |||
| External failure | % | |||
| Not a cost of quality | % | |||
| Total | $ | % | ||
4. Determine the percentages of total department costs that are value-added and non-value-added. If required, round percentages to one decimal place.
Activity Cost |
Percent of Total Department Cost |
|||
| Value-added | $ | % | ||
| Non-value-added | % | |||
| Total | $ | % | ||
5. The department has 40% of its total costs as
Lead Time
Sound Tek Inc. manufactures electronic stereo equipment. The manufacturing process includes printed circuit (PC) board assembly, final assembly, testing, and shipping. In the PC board assembly operation, a number of individuals are responsible for assembling electronic components into printed circuit boards. Each operator is responsible for soldering components according to a given set of instructions. Operators work on batches of 50 printed circuit boards. Each board requires 4 minutes of board assembly time. After each batch is completed, the operator moves the assembled boards to the final assembly area. This move takes 11 minutes to complete.
The final assembly for each stereo unit requires 20 minutes and is also done in batches of 50 units. A batch of 50 stereos is moved into the test building, which is across the street. The move takes 20 minutes. Before conducting the test, the test equipment must be set up for the particular stereo model. The test setup requires 30 minutes. The units wait while the setup is performed. In the final test, the 50-unit batch is tested one at a time. Each test requires 10 minutes. The completed batch, after all testing, is sent to shipping for packaging and final shipment to customers. A complete batch of 50 units is sent from testing to shipping. The Shipping Department is located next to testing. Thus, there is no move time between these two operations. Packaging and labeling requires 9 minutes per unit.
1. Determine the amount of value-added and non-value-added lead time and the value-added ratio in this process for an average stereo unit in a batch of 50 units. Categorize the non-value-added time into wait and move time. Round the percentage to one decimal place.
| Value-added lead time | min. | ||
| Non-value-added lead time: | |||
| Wait time lead time | min. | ||
| Move time lead time | min. | ||
| Total non-value-added lead time | min. | ||
| Total lead time | min. | ||
| Value-added ratio (as a percent) | % | ||
2. Move time in this process could best be reduced by:
a. Doing nothing.
b. Changing the layout from a process orientation to a product orientation.
c. Increasing batch sizes.
d. Eliminating the testing step.
e. Hiring more workers.
In: Operations Management
Process value analysis (PVA) is fundamental to activity-based responsibility accounting, focuses on accountability for activities and emphasizes maximization of system-wide performance. PVA is concerned with (1) driver analysis, (2) activity analysis, and (3) performance measurement.
Activities consume resources and produce outputs. An activity driver is an output measure that measures the number of times an activity is performed and thus calculates the demands/resource supply of an activity. Although the cost of an activity can increase as an activity driver increases, an activity driver does not measure the root causes of activity costs. The purpose of driver analysis/activity analysis is to reveal root causes. Root causes are often identified by asking one or more “why” questions. Answers to why questions make possible the answers to “how” questions.
The process of identifying, describing, and evaluating the activities an organization performs is referred to as driver analysis/activity analysis. The most important part of driver analysis/activity analysis is an assessment of the value of the activities to the organization, including a recommendation to select and keep only those that add value. Activities can be classified as value-added and non-value-added.
Value-added activities are those activities that are necessary/unnecessary to remain in business and contribute to customer value and/or help meet organizational needs. Mandated activities are value-added. Discretionary activities are value-added if they meet the following three conditions (1) the activity produces a change of state, (2) no prior activity was supposed to create this change of state, and (3) the activity enables other activities to be performed. Value-added costs are the costs to perform value-added activities with perfect efficiency.
Non-value-added activities are necessary/unnecessary and are not valued/valued by internal or external customers. Non-value-added activities fail to produce a change in state or replicate work because it wasn’t done correctly the first time. State-detection activity is non-value-added because it is not a state-changing activity. State-correcting activity is non-value-added because it is doing something that should have been done by prior activities. Non-value-added costs are costs caused by non-value-added activities or by the inefficient performance of value-added activities. One of the goals of PVA is to identify non-value-added activities and then to eventually eliminate them so that costs are reduced.
A firm should identify and formally report the value- and non-value-added costs of each activity. Highlighting non-value-added costs reveals the magnitude of the waste the company is currently experiencing, thus providing some information about the potential for improvement. A cost report that shows value- and non-value-added costs allows managers to see the amount of waste, assess its materiality and identify opportunities for cost reduction.
Apply the Concepts
1. Select "Yes or No" for the following activities that are non-value-added:
| Activities | Yes or No |
| Recasting molds that fail inspection | |
| Setting up equipment for a production run | |
| Preparing a required report for the SEC | |
| Inspecting incoming components | |
| Expediting production | |
| Purchasing parts for production | |
| Storing goods for eventual sale | |
| Unloading goods from suppliers | |
| Reworking a defective unit | |
| Performing warranty work | |
| Welding subassemblies | |
| Preparing a tax report for the IRS |
2. There are four employees in the welding department. Three employees are responsible for welding a rod to a cylindrical plate, creating a sub assembly used in the production of pistons. The fourth employee inspects the completed sub assembly and, if necessary, grinds and removes any unnecessary bumps (protuberances) so that the sub assembly becomes usable (which occurs in approximately one-third of the cases because of less than efficient welding). The welders are each paid a salary of $50,000. The fourth employee, who is responsible for inspecting and grinding, is paid a salary of $40,000.
1. Calculate the following:
| Value-added cost: | $ |
| Non-value-added cost: | $ |
2. Answer the following:
The salary of the inspector-grinder is non-value-added/value-added because the activity involves the following. Select "Yes or No".
| Activities | Yes or No |
| State-creation | |
| State-correction | |
| State-detection | |
| Externally mandated work | |
| Necessary work to remain in business |
b. All/some of the welding work is value-added because it is a state-correction/state-creation activity.
Apply the Concepts, Cost Reporting
Medco Inc., a manufacturing firm, has four activities: purchasing materials, molding, inspecting molds, and grinding imperfect molds. Purchasing materials and molding are necessary activities; inspection and grinding are unnecessary. SQ provides the value-added quantity for each activity; AQ is the actual activity output. The following data pertain to the four activities for the year ending (actual price per unit of the activity driver is assumed to be equal to the standard price):
| Activity | Activity Driver | SQ | AQ | SP | |||
| Purchasing | Purchasing hours | 28,000 | 34,000 | $20 | |||
| Molding | Molding hours | 42,000 | 47,600 | 12 | |||
| Inspecting | Inspection hours | 0 | 8,400 | 15 | |||
| Grinding | Number of units | 0 | 6,000 | 6 |
Required:
1. Prepare a cost report for the year 1 ended that shows value-added costs, non-value-added costs, and total costs for each activity by completing the following table:
| Value-and Non-Value-Added Cost Report for the Year 1 Ended | ||||||
| Activity | Value-Added Costs |
Non-Value-Added Costs | Total Costs | |||
| Purchasing | $ | $ | $ | |||
| Molding | ||||||
| Inspecting | ||||||
| Grinding | ||||||
| Total | $ | $ | $ | |||
2. Inspection and grinding are non-value-added activities because inspection is a state-creation/state-correction/state-detection activity and grinding is a state-creation/state-correction/state-detection activity.
3. Purchasing is a step-fixed cost with each step being 2,000 hours. Suppose that the efficiency of purchasing is increased so that the demand for the purchasing activity is 31,000 hours. What is the reduction in the cost achieved by the increased efficiency?
Reduction: $
In: Accounting
In: Accounting
On October 3, 2018, Regal Company purchased $3,600 of supplies on account. In Regal’s chart of accounts, the supplies account is No. 15, and the accounts payable account is No. 21. Required: A. Journalize and insert the posting references for the October 3, 2018, transaction on page 91 of Regal Company’s two-column journal. B. Prepare a four-column account for Supplies. Enter a debit balance of $770 as of October 1, 2018. Enter “Balance” in the Item column and place a check mark (√) in the Posting Reference column. C. Prepare a four-column account for Accounts Payable. Enter a credit balance of $26,200 as of October 1, 2018. Enter “Balance” in the Item column and place a check mark (√) in the Posting Reference column. D. Post and insert posting references for the October 3, 2018, transaction to the accounts. E. Do the rules of debit and credit apply to all companies? CHART OF ACCOUNTS Regal Company General Ledger ASSETS 11 Cash 12 Accounts Receivable 13 Land 14 Prepaid Rent 15 Supplies 16 Equipment 17 Automobiles LIABILITIES 21 Accounts Payable 22 Unearned Rent 23 Notes Payable 24 Salaries Payable EQUITY 31 Common Stock 32 Retained Earnings 33 Dividends REVENUE 41 Fees Earned 42 Sales Commission EXPENSES 51 Advertising Expense 52 Automobile Expense 53 Insurance Expense 54 Rent Expense 55 Wages Expense 56 Supplies Expense 57 Utilities Expense 58 Miscellaneous Expense A. Journalize and insert the posting references for the October 3, 2018, transaction on page 91 of Regal Company’s two-column journal. PAGE 91 JOURNALACCOUNTING EQUATION DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY Oct. 3 Supplies 15 account payable 21 4,125.00 B. Prepare a four-column account for Supplies. Enter a debit balance of $770 as of October 1, 2018. Enter “Balance” in the Item column and place a check mark (√) in the Posting Reference column. C. Prepare a four-column account for Accounts Payable. Enter a credit balance of $26,200 as of October 1, 2018. Enter “Balance” in the Item column and place a check mark (√) in the Posting Reference column. D. Post and insert posting references for the October 3, 2018, transaction to the accounts. LEDGER DATE ITEM
In: Accounting
Capwell Corporation uses a periodic inventory system. The
company's ending inventory on December 31, 2018, its fiscal-year
end, based on a physical count, was determined to be $338,000.
Capwell's unadjusted trial balance also showed the following
account balances: Purchases, $740,000; Accounts payable; $270,000;
Accounts receivable, $285,000; Sales revenue, $920,000.
The internal audit department discovered the following items:
Goods valued at $44,000 held on consignment from Dix Company were included in the physical count but not recorded as a purchase.
Purchases from Xavier Corporation were incorrectly recorded at $64,000 instead of the correct amount of $46,000. The correct amount was included in the ending inventory.
Goods that cost $37,000 were shipped from a vendor on December 28, 2018, terms f.o.b. destination. The merchandise arrived on January 3, 2019. The purchase and related accounts payable were recorded in 2018.
One inventory item was incorrectly included in ending inventory as 220 units, instead of the correct amount of 1,600 units. This item cost $50 per unit.
The 2017 balance sheet reported inventory of $472,000. The internal auditors discovered that a mathematical error caused this inventory to be understated by $74,000. This amount is considered to be material. Comparative financial statements will be issued.
Goods shipped to a customer f.o.b. destination on December 25, 2018, were received by the customer on January 4, 2019. The sales price was $52,000 and the merchandise cost $28,000. The sale and corresponding accounts receivable were recorded in 2018.
Goods shipped from a vendor f.o.b. shipping point on December 27, 2018, were received on January 3, 2019. The merchandise cost $30,000. The purchase was not recorded until 2019.
Required:
1. Determine the correct amounts for 2018 ending
inventory, purchases, accounts payable, accounts receivable, and
sales revenue.
2. Calculate cost of goods sold for 2018.
3. What was the effect of the error in ending
inventory on 2017 before-tax income
Determine the correct amounts for 2018 ending inventory, purchases, accounts payable, accounts receivable, sales revenue, and cost of goods sold.
|
What was the effect of the error in ending inventory on 2017 before-tax income?
|
In: Accounting