3. There is an increase in the wages in Canada, which causes an increase in cost of production by firms in the country.

a. Use the AS/AD model to demonstrate the short-run impact of this event on the aggregate demand (AD) curve, the short-run Aggregate Supply curve (AS), real GDP, price level and unemployment. Your answer should include:

                            i. An AS/AD graph with all curves and quantities clearly labeled. For curves and quantities that change, label their old values with a “0” subscript and their new values with a “1” subscript. For curves and quantities that don’t change, leave out the subscript.

ii. Specific predictions for which variables will go up, which will go down, which will remain the same, and which could go up or down.

b. Use the AS/AD model to demonstrate the long-run impact of this even on the Aggregate Demand curve, the short-run Aggregate Supply (AS) curve, the long-run aggregate supply (LRAS) curve, real GDP, and the price level. Your answer should include:

                            i. An AS/AD graph with all curves clearly labeled. For curves and quantities that change, label their old values with a “0” subscript  and their new values with a “1” subscript. For curves and quantities that don’t change, leave out the subscript.

                          ii. Specific predictions for which variables will go up, which will go down, which will remain the same, and which could go up or down.

An important application of regression analysis in accounting is in the estimation of cost. By collecting data on volume and cost and using the least squares method to develop an estimated regression equation relating volume and cost, an accountant can estimate the cost associated with a particular manufacturing volume.

In the Microsoft Excel Online file below you will find a sample of production volumes and total cost data for a manufacturing operation. Conduct a regression analysis to explore the relationship between total cost and production volume and then answer the questions that follow.

1. Compute b₁ and b₀ (to 1 decimal).

   b₁

   b₀

   Complete the estimated regression equation (to 1 decimal).

   =  + x

2. According to this model, what is the change in cost (in dollars) for every unit produced (to 1 decimal)?

3. Compute the coefficient of determination (to 3 decimals). Note: report r² between 0 and 1.

   r² =

   What percentage of the variation in total cost can be explained by the production volume (to 1 decimal)?

   %

4. The company's production schedule shows 500 units must be produced next month. What is the estimated total cost for this operation (to the nearest whole number)?

   $

A machine with a cost of $65,178.00 has an estimated residual value of $4,473.00 and an estimated life of 6 years or 18,863 hours. It is to be depreciated by the units-of-production method. What is the amount of depreciation for the second full year, during which the machine was used 4,557 hours?

Select the correct answer.

$20,235.00

$15,745.97

$10,117.50

$14,665.36

as an investor, if you wanted to look at the real cost of ownership and value of an asset, would you not want your company to use an accelerated depreciation method so as to give you the most true and stable real cost of asset ownership.

Is cost auditing an instrument for controlling error and fraud in the production process of the organization? Explain its core objectives.

Natalie is thinking of buying a van that will be used only for business. The cost of the van is estimated at $36,500. Natalie would spend an additional $2,500 to have the van painted. In addition, she wants the back seat of the van removed so that she will have lots of room to transport her mixer inventory as well as her baking supplies. The cost of taking out the back seat and installing shelving units is estimated at $1,500. She expects the van to last about 5 years, and she expects to drive it for 200,000 miles. The annual cost of vehicle insurance will be $2,400. Natalie estimates that at the end of the 5-year useful life the van will sell for $7,500. Assume that she will buy the van on August 15, 2019, and it will be ready for use on September 1, 2019.

Natalie is concerned about the impact of the van’s cost on her income statement and balance sheet. She has come to you for advice on calculating the van’s depreciation.

Q1. Determine the cost of the van.

Q2. Prepare three depreciation tables for 2019, 2020, and 2021: one for straight-line depreciation (similar to the one in Illustration 9-10), one for double-declining balance depreciation (Illustration 9-14), and one for units-of-activity depreciation (Illustration 9-12). For units-of-activity, Natalie estimates she will drive the van as follows: 15,000 miles in 2019; 45,000 miles in 2020; 50,000 miles in 2021; 45,000 miles in 2022; 40,000 miles in 2023. Recall that Cookie Creations has a December 31 year-end

Q3. What impact will the three methods of depreciation have on Natalie’s balance sheet at December 31, 2019? What impact will the three methods have on Natalie’s income statement in 2019?

Match the following with Straight Line, Double Declining, or Units of Activity

Lowest amount of Net income

Lowest amount of stockholders' equity

lowest net book value

greatest amount of net income

greatest amount of stockholders equity

greatest book value

People in the aerospace industry believe the cost of a space project is a function of the mass of the major object being sent into space. Use the following data to develop a regression model to predict the cost of a space project by the mass of the space object.

Determine r2 and se. Weight (tons) Cost ($ millions)

1.897 $ 53.6

3.019 $184.1

0.453 $6.4

0.996 $23.5

1.058 $33.7

2.100 $110.4

2.400 $104.6 *(Do not round the intermediate values.

Round your answers to 4 decimal places.) **(Round the intermediate values to 4 decimal places. Round your answer to 3 decimal places.)

ŷ = enter a number rounded to 4 decimal places * + enter a number rounded to 4 decimal places * x

r2 = enter a number rounded to 3 decimal places **

se = enter a number rounded to 3 decimal places **

One of the most important costs in the hospitality businesses is the Cost of Sales (or Cost of Goods Sold). How is it determined? Please select the most appropriate answer from the list below.

1. It is calculated by adding up all purchases of inventory during one accounting period.

2. It is the amount of inventory available on hand. It is calculated by adding the value of individual items by counting them.

3. It is determined by adding all purchases to the beginning inventory amount, and then by subtracting the amount of inventory on hand.

4. It is calculated by multiplying the target percentage (%) predetermined by the management.

How do we determine whether the labor expense has truly grown in a year compared with that of the previous year?

1. If the current year's amount is larger than that of the previous year, it has truly grown.

2. If the current year's difference between the budgeted labor expense and the actual one than that of the previous year, then this year's labor expense has truly grown.

3. Compare each year's labor expense against the revenues amount of the relevant year. If this year's labor expense percentage (%) is larger than that of the previous year, it has truly grown.

4. Divide the current year's labor expense by the previous year's labor expense. If the result is larger than 100%, then it has truly grown.