Brady Construction Company contracted to build an apartment complex for a price of $5,200,000. Construction began in 2018 and was completed in 2020. The following is a series of independent situations, numbered 1 through 6, involving differing costs for the project. All costs are stated in thousands of dollars.

Brady Construction Company contracted to build an apartment complex for a price of $6,000,000. Construction began in 2018 and was completed in 2020. The following is a series of independent situations, numbered 1 through 6, involving differing costs for the project. All costs are stated in thousands of dollars.

Required:
Complete the following table. (Do not round intermediate calculations. Enter answers in dollars. Round your final answers to the nearest whole dollar. Negative amounts should be indicated by a minus sign.)

Complete the following table.

                                Gross Profit (Loss) Recognized

                   Revenue Recognized Over Time             Revenue Recognized Upon Completion

Situation       2016       2017       2018                             2016       2017     2018       

1.

2.

3.

4.

5.

6.

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IMHR DILEMMA: WHOM DO YOU SATISFY? EXPATRIATE OR NATIONALS

Hi-Tech Electronics Limited was established in 2006 in Kuala Lumpur, Malaysia. It produces and markets all types of electronics goods in most of the Asian and Pacific countries. It has been one among the top five companies as for the level of technology and one among the top three companies regarding marketing of the products in Malaysia. The company’s policy and practices concerning human resource management are top in the country. The company’s salary administration policies and practices were taken as guidelines not only by the other companies but also by various wage boards and pay commissions in the country. But this company has been struggling a lot because of a minor problem relating to administration of salary and benefits. The problem is stated hereunder.

The company employed nearly 400 national young graduate and post graduate engineers and 20 expatriate engineers. This employee forms the cream of the company’s present human resource. The expatriate employees occupied higher position in all the departments including Human Resource Department. The company’s salary policy and benefit policy were formulated mainly on the basis of the expatriate employee’s desire. The base salary of the company is the same for both the expatriate and national employees. But expatriate receive additional allowances like international market allowance, educational allowance, settling-in allowance, car allowance, housing allowance and entertainment allowance. Thus, expatriate receives nearly 250% more salary than the nationals doing the same job.

The national employees demanded the management to pay equally with that of expatriates immediately. According to them, the pocket frustrates them severely.

QUESTIONS:

1. Identify the crucial issue in this case.

2. From your opinion what are the 3 factors that enables expatriate receives more salary than the nationals who are doing the same job? Explain and justify your statements.

In Year 1, Goodnight Sleep Company began to receive complaints from physicians that patients were experiencing unexpected side effects from the company’s sleep apnea drug. The company took the drug off the Market near the end of Year 1. During Year 2, the company was sued by 800 customers who had a severe allergic reaction to the company’s drug and required hospitalization. At the end of Year 2, the company’s attorneys estimated a 62% chance the company would need to make payments in the range of $2,500 to $7,000 to settle each claim, with all amounts in that range being equally likely. At the end of Year 3, while none of the cases had been resolved, the company’s attorney now estimated an 80% probability the company would be required to make payments in the range of $3,000 to $10,000 to settle each claim with all amounts in that range being equally likely. In Year 400 claims were settled at a total cost of $2.5 million. Based on this experience, the company believes 30% of the remaining cases will be settled at $5,500 each, 50% will be settled for $6,000 each and 20% will be settled for $6,200 each. Required: Prepare the journal entry (in good format) for Years 1 – 4 related to this litigation.

Netflix experienced some membership turbulence in 2016 as a price increase was phased in for its US subscribers. In May 2014, Netflix announced that the price of its standard subscription service would increase from $8 to $9. However, established customers were allowed to stay at the $7.99 price for two years. In 2015, Netflix increased the standard price to $9.99. As a result of the pricing plan and the deferred price increase, in May, 2016, the standard pricing plan for long time customers of Netflix increased from $7.99per month to $9.99per month. Netflix began notifying customers in April that the price increase would become effective in the second quarter. Netflix was trying to implement price increases more slowly after a 2011 increase led to negative publicity and a customer backlash. In that case, Netflix separated its streaming and DVD services, and charged separately for both services. However, regardless of the implementation of the price increase, the higher monthly prices seem to have impacted the growth of membership among US subscribers. In the two quarters before the price increase, Netflix added net membership of 1.6 million and 2.2 million members. By contrast, the number of members added in Q2 was only 160,000, and in Q3 only 400,000. The Q2 growth in US subscribers was the lowest since Netflix began reporting those numbers in 2012.

Netflix Price Increase Hurts Membership

U.S. Streaming (millions) Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016

Revenue 1026 1064 1106 1161 1208 1304

Contribution Profit 340 344 379 413 414 475

Contribution Margin 33.1% 32.3% 34.3% 35.6% 34.3% 36.4%

Paid Memberships 41.1 42.1 43.4 45.7 46.0 46.5   

Total Memberships 42.3 43.2 44.7 47.0 47.1 47.5

NET Additions 0.90 0.88 1.56 2.23 0.16 0.40

Monthly Revenue Per

Paid Member $ 8.33 $ 8.43 $ 8.49 $ 8.47 $ 8.75 $ 9.40    

Percentage change Rev. 3.7% 3.9% 5.0% 4.0% 7.9%

Percentage change 2.5% 3.2% 5.3% 0.6% 0.9%

Membership

Source: Netflix 10Q Q3, 2016

According to a MarketWatch article1on the price increase:Netflix said Monday that customers who learned in April that the price was about to increase had begun canceling their subscriptions, leading to unexpected “churn.” Netflix did not flat-out say inits letter to investorsthat the price increase led to higher churn among subscribers, however, instead saying it coincided with “press coverage” of the rate hike and that subscribers misunderstood “the news as an impending new price increase rather than the completion of two years of grandfathering.”The stock market reacted to news of Netflix price increase as well. The stock closed at $102.23 as of March 31, 2016. After the release of second quarter earnings in July, the stock price had fallen to $85.84 per share, a decline of 16%. This decline wiped out almost $7 billion of shareholder value during this period. Most of this decline was immediately following the release of the second quarter numbers.With competition increasing in for streaming services, especially with the growth of Amazon Prime Video and Hulu, the decline in membership growth could be a troubling sign.

1.Use the information on the change in membership, to estimate the own price elasticity for Netflix service.

2.What impact would this price change have on revenue and profits.

3.What concerns do you have regarding the reliability of your elasticity estimate?

4.What information / data would make your analysis better?

1. Previously, 20% of potential customers from St. Thomasville buy a certain brand of soap--say Brand A. To increase sales, the company conducts an extensive advertising campaign. At the end of the campaign, a random sample of 300 potential customers is interviewed and 80 customers prefer Brand A. Conduct an appropriate test to determine if the true proportion of customers that prefer Brand A soap is higher than 20%. Use a = 0.03.

5. A political campaign manager wants to know if the sample results can be used to conclude that the unemployment rate for 18- to 34-years-olds is significantly higher than the unemployment rate for all adults. According to the Bureau of Labor Statistics, the unemployment rate for all adults was 7.9%. Develop a hypothesis test that can be used to see if the conclusion that the unemployment rate is higher for 18- to 34-year-olds can be supported. In a sample of size 400 18- to 34-years-olds, there were 50 that indicated that they were unemployed. Let a = 0.05.

***Create null & alternate hypothesis, create rejection region, calculate test value & make conclusion to reject or not reject***

The following data are for the two products produced by Tadros Company.

The company's direct labor rate is $20 per direct labor hour (DLH). Additional information follows.

Required:

(Round your per unit cost answers to 2 decimal places and other answers to nearest whole number. Loss amounts should be indicated with minus sign.)

The following data are for the two products produced by Tadros Company.

The company's direct labor rate is $20 per direct labor hour (DLH). Additional information follows.

Required:

(Round your per unit cost answers to 2 decimal places and other answers to nearest whole number. Loss amounts should be indicated with minus sign.)

Assume a marketing company has several shipping options available for shipping a large amount of product from its plant in California to customers in Mexico. Which of the following modes of transportation is MOST LIKELY to offer the lowest transportation cost in terms of tons-per-mile shipped?

Ensuring products are available when a customer wants to make a purchase requires an efficient ordering and inventory management system. This system is comprised of each of the following EXCEPT:

Manufacturers’ representatives are a type of wholesaler that simultaneously represents several non-competing suppliers.

The intermodal method of product delivery by which truck trailers are loaded onto railroad cars without the need to unload the trailer is called:

You are the manager of a shoe producer. Your company specializes in basketball shoes and a cleaning product for basketball shoes. While the shoes bring in more revenue ($500,000 per year), the cleaning product is a strong seller as well ($150,000 of revenue per year). You are considering a 2% decrease in the price of your company's basketball shoes. Assume that the shoes have an own price elasticity of demand of -1.8 and the shoes and cleaning product have a cross-price elasticity of demand of -1.4. How much do you estimate your company's total revenue to change if you go forward with the proposed 2% shoe price decrease?