In North America and Europe, as countries developed from the late 19th to the late 20th century, social insurance (public pension) schemes, unemployment benefits, and publicly provided health care and welfare schemes became more pervasive. Over that period, the extended family was replaced by the nuclear family. Use the concepts of economies of scope and path dependency to explain why this happened and why the transformation took several generations.

If the market is strong-form efficient, which of the following statements is false?

Ethical Considerations

Objective 3

Lindell Manufacturing embarked on an ambitious quality program that is centered on continual improvement. This improvement is operationalized by declining quality costs from year to year. Lindell rewards plant managers, production supervisors, and workers with bonuses ranging from $1,000 to $10,000 if their factory meets its annual quality cost goals.

Len Smith, manager of Lindell's Boise plant, felt obligated to do everything he could to provide this increase to his employees. Accordingly, he has decided to take the following actions during the last quarter of the year to meet the plant's budgeted quality cost targets:

1. Decrease inspections of the process and final product by 50% and transfer inspectors temporarily to quality training programs. Len believes this move will increase the inspectors' awareness of the importance of quality; also, decreasing inspection will produce significantly less downtime and less rework. By increasing the output and decreasing the costs of internal failure, the plant can meet the budgeted reductions for internal failure costs. Also, by showing an increase in the costs of quality training, the budgeted level for prevention costs can be met.

2. Delay replacing and repairing defective products until the beginning of the following year. While this may increase customer dissatisfaction somewhat, Len believes that most customers expect some inconvenience. Besides, the policy of promptly dealing with customers who are dissatisfied could be reinstated in 3 months. In the meantime, the action would significantly reduce the costs of external failure, allowing the plant to meet its budgeted target.

3. Cancel scheduled worker visits to customers' plants. This program, which has been very well received by customers, enables Lindell workers to see just how the machinery they make is used by the customer and also gives them first-hand information on any remaining problems with the machinery. Workers who went on previous customer site visits came back enthusiastic and committed to Lindell's quality program. Lindell's quality program staff believes that these visits will reduce defects during the following year.

Required:

1. Evaluate Len's ethical behavior. In this evaluation, consider his concern for his employees. Was he justified in taking the actions described? If not, what should he have done?

2. Assume that the company views Len's behavior as undesirable. What can the company do to discourage it?

3. Assume that Len is a CMA and a member of the IMA. Refer to the ethical code for management accountants in Chapter 1. Were any of these ethical standards violated?

What is the PV of $260 received in: (Do not round intermediate calculations. Round your answers to 2 decimal places.)

a. Year 8 (at a discount rate of 3%)? Present value $

b. Year 8 (at a discount rate of 15%)? Present value $

c. Year 13 (at a discount rate of 27%)? Present value $

d. Each of years 1 through 3 (at a discount rate of 14%)? Present value $

Carnes Cosmetics Co.'s stock price is $57, and it recently paid a $1.75 dividend. This dividend is expected to grow by 27% for the next 3 years, then grow forever at a constant rate, g; and rs = 12%. At what constant rate is the stock expected to grow after Year 3? Do not round intermediate calculations. Round your answer to two decimal places. 6.62% is the wrong answer by the way

The futures price of a commodity is $95. Use a three-step tree to value (a) a nine-month American call option with strike price $100 and (b) a nine-month American put option with strike price $100. The volatility is 27% and the risk-free rate (all maturities) is 3% with continuous compounding.

On April 1, Jiro Nozomi created a new travel agency, Adventure Travel. The following transactions occurred during the company’s first month. April 1 Nozomi invested $37,000 cash and computer equipment worth $40,000 in the company in exchange for common stock.

2 The company rented furnished office space by paying $1,900 cash for the first month’s (April) rent.

3 The company purchased $1,600 of office supplies for cash.

10 The company paid $2,200 cash for the premium on a 12-month insurance policy. Coverage begins on April 11.

14 The company paid $1,500 cash for two weeks' salaries earned by employees.

24 The company collected $17,500 cash for commissions revenue.

28 The company paid $1,500 cash for two weeks' salaries earned by employees.

29 The company paid $450 cash for minor repairs to the company's computer.

30 The company paid $1,450 cash for this month's telephone bill.

30 The company paid $2,300 cash in dividends.

The company's chart of accounts follows:

101 Cash 405 Commissions Revenue 106 Accounts Receivable 612 Depreciation Expense—Computer Equip. 124 Office Supplies 622 Salaries Expense 128 Prepaid Insurance 637 Insurance Expense 167 Computer Equipment 640 Rent Expense 168 Accumulated Depreciation—Computer Equip. 650 Office Supplies Expense 209 Salaries Payable 684 Repairs Expense 307 Common Stock 688 Telephone Expense 318 Retained Earnings 901 Income Summary 319 Dividends

Use the following information:

Prepaid insurance of $122 has expired this month.

At the end of the month, $600 of office supplies are still available.

This month’s depreciation on the computer equipment is $500.

Employees earned $500 of unpaid and unrecorded salaries as of month-end.

The company earned $1,650 of commissions that are not yet billed at month-end.

Required: 1. & 2. Prepare journal entries to record the transactions for April and post them to the ledger accounts in Requirement 6b.

The company records prepaid and unearned items in balance sheet accounts.

3. Using account balances from Requirement 6b, prepare an unadjusted trial balance as of April 30. 4. Journalize the adjusting entries for the month and prepare the adjusted trial balance. 5a. Prepare the income statement for the month of April 30. 5b. Prepare the statement of retained earnings for the month of April 30. 5c. Prepare the balance sheet at April 30. 6a. Prepare journal entries to close the temporary accounts and then post to Requirement 6b. 6b. Post the journal entries to the ledger. 7. Prepare a post-closing trial balance.

Receivables Investment McEwan Industries sells on terms of 3/10, net 30. Total sales for the year are $1,921,000; 40% of the customers pay on the 10th day and take discounts, while the other 60% pay, on average, 70 days after their purchases. What is the days sales outstanding? .40 * 10 + .60 * 70 4 + 42 days days sales outstanding = 46 days What is the average amount of receivables? 1,921,000*46/365 $242,098.63 What is the percentage cost of trade credit to customers who take the discount? .03*365 / .97x20 56.44% What is the percentage cost of trade credit to customers who do not take the discount and pay in 70 days? .03*365 / .97x60 18.8% What would happen to McEwan’s accounts receivable if it toughened up on its collection policy with the result that all nondiscount customers paid on the 30th day?

Sheep Books, a profit-maximizing business, is the only book supplier in a small farming village with the following consumers.

Assuming that the marginal & average total cost for each book is $12, the store's single profit maximizing price is:

Assuming that the marginal & average total cost for each book is $12. If the store offers an $8 coupon only to those customers unwilling to pay the profit maximizing price, then its combined profit from all its customers is:

Assuming that the marginal & average total cost for each book is $12. If the store owner was able to do Perfect Price discrimination, then its combined profit from all its customers is: