Volmar Company had sales in 2020 of $1,602,000 on 53,400 units. Variable costs totalled $534,000, and fixed costs totalled $911,400.

A new raw material is available that will decrease the variable costs per unit by 20% (or $2.00). However, to process the new raw material, fixed operating costs will increase by $43,500. Management feel that one half of the decline in the variable costs per unit should be passed on to customers in the form of a sales price reduction. The marketing department expects that this sales price reduction will result in a 10% increase in the number of units sold.

Prepare a CVP income statement for 2020: (Round per unit cost to 2 decimal places, e.g. 15.25.)

(a) Assuming the changes have not been made:

(b) Assuming that changes are made as described.

Compute the change in EVA for each of the cases below. ATC has an 8% cost of capital. [Theses are separate cases, not sequential or joint changes.]

a) SG&A/Rev changes to 7%

b)Receivable Days (Days Sales Outstanding) changes to 10 days

Please give a brief justification for the correct answer you select:

1. Macroeconomics is concerned with

1. Only long-run trends in economic activity.
2. Only short-run fluctuations in the business cycle.
3. Both long-run trends and short-term fluctuations in economic activity.
4. Only with changes in overall price level.

2. Which one of the following is not a reason for a country collecting national income statistics?

1. to calculate changes in the cost of living
2. to estimate the rate of economic growth
3. to calculate changes in the standard of living
4. to compare standards of living between countries

3. An example of a transfer payment is:
   1. An interest payment on a General Motors’ bond
   2. The added value of stock from the time it was bought to the time it was sold
   3. A Social Security retirement benefit
   4. The salary paid to a member of the armed forces

4. The service a baby-sitter performs when she stays at home with her baby brother

      while her parents are out and she is not paid for it, is excluded from the National

      Income because:

A)   This is a nonmarket transaction

B)    This is a nonproduction activity

C)   This is a noninvestment transaction

D) Double counting would be involved

5. Which of the following represents a leakage from the circular flow?
   1. Exports
   2. Investment
   3. Interest paid on bank loans
   4. Imports

6. Which of the following would NOT be counted in 2003’s GDP?

1. The value of a 2001 car you purchase from a car dealer in 2003.
2. The 2003 salary of a used car salesperson.
3. The commissions earned by a real estate agent in selling houses built prior to 2003.
4. The value of a computer manufactured in 2003 but not sold in 2003.

The new revenue recognition standard issue by the Financial Accounting Standards Board (FASB) and International Accounting Standards Board (IASB) will call for major changes in the way companies in the airline industry recognize revenue. Airlines may have to change how they account for loyalty status benefits, mileage credits, change fees, and breakage for tickets that expire unused. The American Institute of Certified Public Accountants (AICPA) has formed an airlines task force to address implementation issues of the new standard for the airline industry. Assume that you have been called upon to present an analysis of the impact of the new standard on Southwest Airlines.

Refer to Southwest’s (ticker symbol: LUV) current/most recent financial statements (10-K) and the accompanying notes to answer the following questions. The current/most recent financial statement can be found on https://www.sec.gov/edgar/searchedgar/companysearch.html. Search for the company in the ‘Fast Search’ box by using the ticker symbol provided above. In the list of results, find the latest filing labeled 10-K and select the ‘Documents’ link. On the next page, select the document of type ’10-K’ to open it.

A. For each of the following revenue categories, describe the current accounting, the likely changes (if any) that the new revenue recognition standard will require, and the potential impact of those changes on patterns of revenue recognition.

1) Flight Transportation (for tickets used and for ticket breakage)

2) Loyalty Program

3) Ancillary Services and Other Revenue

B. Identify any areas that will require more discretion and judgment and specify why.

Woo Ltd. recently conducted an extensive review of its accounting and reporting policies. The following accounting changes are an outgrowth of that review:

1. Woo acquired a machine at a cost of $400,000 in 2016. The machine has been depreciated on a straight-line basis with no residual value since it was acquired. During 2019, it was decided that the benefits from the machine would be consumed over a total of 13 years rather than the 20-year useful life now being used to depreciate its cost.

2. At the beginning of 2019, Woo changed its method of valuing inventory from the FIFO cost method to the weighted-average cost method. At December 31, 2018 and 2017, Woo’s inventories were as follow:

3. Woo‘s income tax rate is 20%.

4. Woo reports net income for 2019 and 2018 for the following amounts:

5. The retained earnings of Woo as at December 31, 2018 and 2017 before adjusting the     effect from the changes in inventory valuation method are as follow:

6. Dividends declared during 2019 and 2018 were $100,000 and $500,000, respectively.

Required:

1. Prepare the journal entries needed in 2019 related to each change.   

Prepare the statements of changes in equity (in part) for the year ended at 31 December 2019 after the adjustments (including comparative figure for 2018) in accordance with HKAS 8.      

1. Ammonia is initially at a temperature of -10° C and a specific volume of 0.07 m3/kg. The ammonia undergoes an isobaric expansion to a final specific volume of 0.22 m3/kg. Evaluate the specific work done on the ammonia in kJ/kg and the specific heat transfer to the ammonia in kJ/kg. Neglect changes in kinetic energy and potential energy.

2. Carbon dioxide is contained in a piston-cylinder assembly with an initial pressure and temperature of 8 lbf/in2 and 100° F, respectively. The carbon dioxide has a mass of 0.05 lb. The carbon dioxide is expanded isothermally to a final volume of 1 ft3. Model the carbon dioxide as an ideal gas with constant specific heats. Evaluate the specific heats at 100° F. Determine the amount of work done on the gas in Btu and the heat transfer to the gas in Btu. Neglect changes in kinetic energy and potential energy.

3. An ideal gas with constant specific heats undergoes a process from an initial pressure and specific volume of 80 kPa and 40 m3/kg to a final specific volume of 20 m3/kg. During the process, the hydrogen’s pressure and specific volume are related through the equation given below. In the equation, ?? and ?? are the initial pressure and specific volume of the hydrogen, respectively. Determine the specific work done on the gas in MJ/kg and the specific heat transfer to the gas in MJ/kg. The ideal gas has a molar mass of 2.0 kg/kmol and a specific heat at constant volume of 7.5 kJ/(kg∙K). Neglect changes in kinetic energy and potential energy.

   ? = ?? ⋅ [2 − (?/??)]

The following relates to the Lerner Index.

Which of the following statements is (are) true?

The inverse demand curve for a monopolist changes from

A) P = 75– 5 Q to
B) P = 50 – 5 Q

while the marginal cost of production remains unchanged at a constant $20. After the change in the demand curve, the price changes from _____ to _____ and the output changes from _____ to _____.

A monopolist that produces a computer software program packages has an inverse demand curve of P=150-5 Q and a marginal cost of 5 Q where P is the price per program package and Q is the number of software program package.

The firm earns a producer surplus that is ____ dollars higher as a monopolist versus if it were in a perfectly competitive market.

.1) Let’s assume that you want to open one of the following new businesses. What form of business ownership would you choose for each? Justify your answer and explain why you’ve chosen the particular business ownership form for each business below:

a) A Specialty coffee truck.

b) A planning service for business events such as the release of new products or employee gatherings.

c) A Marketing consulting firm.

d) Online service that aggregates and compares the price of grocery items in the UAE.

Q.2) Imagin that Noon and Namshi were to merge together. Clearly explain what kind of merger would this be and why? What do you think would lead to such merger? How do you think this merger would affect the top three stakeholders (Customers, Employees, Investors)? What benefits would the merger provide to both companies (name 1)? What new challenges do you think the merger would create for the two companies (name 1)?

Q.3) What is meant by SWOT analysis and when is it used? Conduct a SWOT analysis for AUS. You need to write 2 items for each 2(S), 2(W), 2(O), 2(T). Use examples in your answer.

Q.4) Q.4) One of the drivers of organizational change can be led by changes to the economic environment. With the recent economic changes that are caused primarily by the Covid-19, what changes do see happening in organizations in relation to “Centralization/Decentralization”. Please justify your answer and use examples.

2. A contractor has a contract to remove and replace the existing landscape and
sidewalks around an office building. The work includes demolition of the
existing landscaping and sidewalks, importing fill and grading around the
office building, constructing new concrete sidewalks, and new landscaping.
The contractor uses the cost codes in Figure 2-6. The original estimate for the
demolition was $30,000 and a $5,000 change order has been approved to
remove some unexpected debris found during the demolition. The
demolition work has been completed at a cost of $33,562. The original
estimate for the fill and grading was $17,500 and a $2,000 change order for
importing additional fill to replace the debris has been approved. The fill and
grading costs to date are $17,264 and the cost to complete has been
estimated at $2,236. The original budget for the labor to pour the concrete
was $19,200 and no changes have been made. The concrete labor has been
subcontracted out for $19,200, for which the contractor has received a bill
for $15,200. The original budget for the concrete for the sidewalks was
$9,900 and no changes have been made. The contractor has spent $7,425 for
concrete and estimates that $1,950 of concrete will be needed to complete
the project. The original estimate for the landscaping was $37,500 and no
changes have been made. The landscape work has been subcontracted out for
$37,500. The landscaping work has yet to start and no bills have been
received. Determine the total estimated cost at completion for the project
and the variance for each cost code.

6. Create a spreadsheet to solve Problem 2.