“Diamond Company” is preparing a budget for the first quarter of year 2020. The following information is available:

• Total expected sales for last two months of 2019 and four months of 2020 are (in 000’s LE)

• All sales are on credit and collections from sales are 60% in the month of sales, 30% in the next month, and 10% in the following month.
• Cost of goods sold is 70% of sales.
• The desired ending inventory every month is 30% of the next month's cost of goods sold.

• It is expected that ending inventory of December, 2019, will be valued at LE 33 600.
• All purchases are paid in the month of purchases.
• All cash operating expenses are paid when incurred and the following are the budgeted expenses per month:

Wages LE 31 000, Advertising LE 5 000, Depreciation LE 16 000, Rent 12 000.

• It is planned to pay, for other cash operating expenses, the amount of LE 16 000 in January and LE 43 800 in February 2020.

DataSpan, Inc., automated its plant at the start of the current year and installed a flexible manufacturing system. The company is also evaluating its suppliers and moving toward Lean Production. Many adjustment problems have been encountered, including problems relating to performance measurement. After much study, the company has decided to use the performance measures below, and it has gathered data relating to these measures for the first four months of operations.

Management has asked for your help in computing throughput time, delivery cycle time, and MCE. The following average times have been logged over the last four months:

Required:

1-a. Compute the throughput time for each month.

1-b. Compute the delivery cycle time for each month.

1-c. Compute the manufacturing cycle efficiency (MCE) for each month.

2. Evaluate the company’s performance over the last four months.

3-a. Refer to the move time, process time, and so forth, given for month 4. Assume that in month 5 the move time, process time, and so forth, are the same as in month 4, except that through the use of Lean Production the company is able to completely eliminate the queue time during production. Compute the new throughput time and MCE.

3-b. Refer to the move time, process time, and so forth, given for month 4. Assume in month 6 that the move time, process time, and so forth, are again the same as in month 4, except that the company is able to completely eliminate both the queue time during production and the inspection time. Compute the new throughput time and MCE.

The company sells an industrial line of products that are all subject to a 3-year warranty. Prior experience has resulted in an average warranty cost of 3% of revenue for its products. The company had an accrued warranty liability of $500,000 at December 2018. During January of 2019, product sales were $6 million, and the actual warranty costs incurred were $145,000.

a. Prepare journal entries to record product sales (assume all credit sales), the warranty accrual, and actual warranty costs incurred in January of 2019.

b. Show a T-account with for the transactions in the Estimated Warranty Liability account for January, with the correct ending balance for this liability.

Project A is as follows: $100,000 upfront cost and annual cash flows of $25,000 a year for seven years. Project B is as follows: $100,000 upfront cost and cash flow of $20,000 per year for 8 years. what are the payback periods for projects A and B?

John Smith previously earned £ 10,000 a year in employment and had £ 100,000 invested in government securities, yielding 10% per annum. He sold his securities for £ 100,000 and started his own business. Initially, he rented a factory for £ 5000 per annum, but subsequently purchased it for £ 20,000, leaving £ 80,000 as the financial capital within the firm. John Smith’s accountants estimate that total revenue of the firm in the past year was £ 100,000 and total costs were £ 80,000, including a salary of £ 5000 paid to John Smith.

Estimate the profit of this firm from the viewpoint of (i) The accountant (ii) The economist, explaining clearly the reason for any difference. [15 marks]

In a particular year, 68% of online courses taught at a system of community colleges were taught by full-time faculty. To test if 68% also represents a particular state's percent for full-time faculty teaching the online classes, a particular community college from that state was randomly selected for comparison. In that same year, 33 of the 44 online courses at this particular community college were taught by full-time faculty. Conduct a hypothesis test at the 5% level to determine if 68% represents the state in question.

Note: If you are using a Student's t-distribution for the problem, you may assume that the underlying population is normally distributed. (In general, you must first prove that assumption, though.)
1. State the distribution to use for the test. (Round your standard deviation to four decimal places.)
P' ~

2. What is the test statistic? (Round your answer to two decimal places.)

3. What is the p-value? (Round your answer to four decimal places.)

4. Alpha:

5. Construct a 95% confidence interval for the true proportion. Sketch the graph of the situation. Label the point estimate and the lower and upper bounds of the confidence interval. (Round your answers to four decimal places.)

The following information pertains to the City of Williamson for 2017, its first year of legal existence. For convenience, assume that all transactions are for the general fund, which has three separate functions: general government, public safety, and health and sanitation.

Compensated absences (such as vacations and sick days) legally owed to general government workers at year-end total $13,000. These amounts will not be taken by the employees until so late in 2018 that the payment is not viewed as requiring 2017 current financial resources.

The city received a piece of art this year as a donation. It is valued at $14,000. It will be used for general government purposes. There are no eligibility requirements. The city chose not to capitalize this property.

The general government uses the storage shed that was acquired this year. It is being depreciated over 10 years using the straight-line method with no salvage value. The city uses the equipment for health and sanitation and depreciates it using the straight-line method over five years with no salvage value.

The investments are valued at $103,000 at the end of the year.

For the equipment that has been ordered but not yet received, the City Council (the highest decision-making body in the government) has voted to honor the commitment when the equipment is received.

1. b-1. Prepare a statement of revenues, expenditures, and other changes in fund balances for the general fund as of December 31, 2017. Assume that the city applies the consumption method.

The mean number of sick days an employee takes per year is believed to be about 10. Members of a personnel department do not believe this figure. They randomly survey 8 employees. The number of sick days they took for the past year are as follows: 11; 6; 13; 3; 11; 9; 8; 10. Let X = the number of sick days they took for the past year. Should the personnel team believe that the mean number is about 10? Conduct a hypothesis test at the 5% level.

Note: If you are using a Student's t-distribution for the problem, you may assume that the underlying population is normally distributed. (In general, you must first prove that assumption, though.)

1. State the distribution to use for the test. (Enter your answer in the form z or t_df where df is the degrees of freedom.)

2. What is the test statistic? (If using the z distribution round your answers to two decimal places, and if using the t distribution round your answers to three decimal places.)

3. What is the p-value? (Round your answer to four decimal places.)

Explain what the p-value means for this problem. If

H₀ is true, then there is a chance equal to the p-value that the average number of sick days for employees is at least as different from 10 as the mean of the sample is different from 10.If

H₀ is false, then there is a chance equal to the p-value that the average number of sick days for employees is at least as different from 10 as the mean of the sample is different from 10.    If

H₀ is false, then there is a chance equal to the p-value the average number of sick days for employees is not at least as different from 10 as the mean of the sample is different from 10.If

H₀ is true, then there is a chance equal to the p-value the average number of sick days for employees is not at least as different from 10 as the mean of the sample is different from 10.

4. Construct a 95% confidence interval for the true mean. Sketch the graph of the situation. Label the point estimate and the lower and upper bounds of the confidence interval. (Round your answers to three decimal places.)

If Company XYZ plans to launch a new production line, and in year 1, will have sales revenue       

             $10,000,000, operating cost is 70% of the sales revenue, depreciation is $2,000,000, and tax rate    

              is 40%, what is the Company’s projected cash flow in year 1?

       b. If the Company’s launch of the new production line will cause the exit of an existing production line     

         that can generate $1,000,000 operating income before tax, how much will be the Company’s  

        projected cash flow in year 1, if we take this opportunity cost or cannibalization into the consideration?            

c. If the tax rate fell to 30%, what will be the project’s cash flow?