1. A year ago, you deposited $30,000 into a retirement savings account at a fixed rate of 5.5 percent. Today, you could earn a fixed rate of 6.5 percent on a similar type account. However, your rate is fixed and cannot be adjusted. How much less could you have deposited last year if you could have earned a fixed rate of 6.5 percent and still have the same amount as you currently will when you retire 38 years from today?

Johnson, Inc. projects sales for next year will be 55,000 units if the sales price is $27.50. At this level, unit fixed costs will be $8.30 while total variable costs will be $693,000. The vice president of marketing advises management to reduce sales price to $26.00 and to undertake a national advertising campaign costing $12,000.

1. What is the breakeven point for the company in terms of dollars and units before giving effect to the vice president's plan?
2. What is the breakeven point in units after giving effect to the plan?
3. The vice president believes that his plan will result in a before tax earnings of $56,000. How many units must be sold to reach this earnings level?

Data collected at elementary schools in a certain county in the US suggest that each year roughly 25% of students miss exactly one day of school, 14% miss 2 days, and 26% miss 3 or more days due to sickness. a. What is the probability that a student chosen at random doesn't miss any days of school due to sickness this year? (Enter your answer to two decimal places.) b. What is the probability that a student chosen at random misses no more than one day? (Enter your answer to two decimal places.) c. What is the probability that a student chosen at random misses at least one day? (Enter your answer to two decimal places.) d. If a parent has two kids at an elementary school in this county, what is the probability that neither kid will miss any school? Assume the probabilities are independent. (Enter your answer to four decimal places.) e. If a parent has two kids at an elementary school in this county, what is the probability that both kids will miss some school, i.e., at least one day? Assume the probabilities are independent. (Enter your answer to four decimal places.) f. Do you think it was reasonable to assume the probabilities are independent in parts (d) and (e)? The kids are siblings, and if one gets sick it probably ... the chance that the other one gets sick. So whether or not one misses school due to sickness is probably ... of the other

The mean weight of a 2-year old is 27.5 pounds with a standard deviation of 2.3 pounds, although some 2-year olds weigh as much as 39 pounds. A health official randomly selects the medical records of 50 2-year olds to study. What is the probability the mean weight of the health official’s sample is more than 28.5 pounds?   

A) 0.001 B) 0.332 C) 0.668 D) 0.999 E) This cannot be determined because the distribution is skewed right due to the 2-year olds that weigh as much as 39 pounds.

For the coming year, Archway Computers Inc. expects to produce and sell 200,000 computers. Of these, 80,000 will be consumer (personal) computers and 120,000 will be small business computers. Common fixed overhead is $700,000. Additional information for the coming year is as follows:

Consumer Computers      Small Business Computers

Price                                                               $780                                       $2,300

Unit Direct Materials                                    500                                         1,800

Unit Direct Labour                                        160                                            290

Unit Variable Overhead                                40                                              75

Unit Variable Selling Expenses                   75                                              70

Total Direct Fixed Overhead               120,000                                    200,000

Fixed selling and administrative expense for Archway Computers Inc. is $3,460,000 per year.

Required:

Calculate the unit variable cost under variable costing. Is this cost the same as unit variable product cost? Why or why not?

Prepare a segmented variable-costing income statement for next year. The segments correspond to product lines: consumer computers and small business computers.

The Dorset Corporation produces and sells a single product. The following data refer to the year just completed:

Assume that direct labor is a variable cost.

Required:

a. Compute the unit product cost under both the absorption costing and variable costing approaches.

b. Prepare an income statement for the year using absorption costing.

c. Prepare an income statement for the year using variable costing.

d. Reconcile the absorption costing and variable costing net operating income figures in (b) and (c) above.

Periodic Inventory by Three Methods The units of an item available for sale during the year were as follows: Jan. 1 Inventory 17 units at $48 Feb. 17 Purchase 20 units at $49 Jul. 21 Purchase 13 units at $51 Nov. 23 Purchase 7 units at $51 There are 11 units of the item in the physical inventory at December 31. The periodic inventory system is used. Round average unit cost to the nearest cent and final answers to the nearest whole dollar, if required.

a. Determine the inventory cost by the first-in, first-out method. $

b. Determine the inventory cost by the last-in, first-out method. $

c. Determine the inventory cost by the weighted average cost method. $

- What is the effective rate of a 4.25%, $250,000 30 year fixed rate mortgage with 1.5 discount points, if the mortgage is held for 10 years?

- What is the effective rate of a 4.25%, $250,000 30 year fixed rate mortgage with 1.5 discount points, if the mortgage is held for 1 year?

We are evaluating a project that costs $972,000, has a 4 year life, and no salvage value. Assume that depreciation is staright-line to zero over the life of the project. Sales are projected at 88,000 units per year. Price per unit is $35.15, variable cost per unit is $21.40 and fixed costs are $768,000 per year. The tax rate is 35 percent and we require a return of 13 percent on this project.

A) Calculate the best case operating cash flow and NPV

B) What is the sensitivity of NPV to changes in the sales figure?

C) If there is a 500-unit decrease in projected sales, how much would the NPV drop?

D) What is the sensitivity of OCF to changes in the variable cost figure?

E) If there is $1 decrease in estimated variable costs, how much would the increase in OCF be?

The company PR Products Corp. estimates that its quarterly sales for the next year are as follows: (units) The price per unit is $ 70

1. 1 Quarter 30,000 units

2. 2 Quarter 50,000

3. 3 Quarter 60,000

4. 4 Quarter 40,000

Accounts receivable as of December 31 are $ 90,000. The company estimates that sales are charged 60% in the quarter they are made and 40% in the following quarter.

Finished Goods' desired ending inventory represents 20% of next or next quarter unit sales. Finished Goods starting inventory is 6,000 units.

3 pounds of Raw Material per unit is required for the production required. Raw Material's desired inventory is 10% of the required production for the next quarter. Raw Material's initial inventory is 12,000 units. The cost of Raw Material is $ 1.00 per pound.

Accounts payable on 12/31 / X0 total $ 60,000. Payments for Raw Material purchases are made at the rate of 70% in the quarter of purchase and the other 30% in the following quarter.

The invested time of direct labor per unit is 1.5 hour. The hourly direct labor cost is $ 20.00.

Expected Cash Collections

Production Budget

Direct Material Budget