During the classic period the court lifted the veil on a number of occasions - from the list below select the correct answers (you may choose more than one answer)

Group of answer choices

When groups of companies should be viewed as one single entity. (DHN Food Distributors)

Defendant set up a company to solicit customers he was prohibited from soliciting due to previous employment contract (Gilford Motor Co v Horne)

Setting up a company to avoid an estate contract (Jones v Lipman);

Setting up a company to force compulsory purchase of minority shareholdings (Re Bugle Press).

Dealing with the enemy (Daimler v Continential Tyre);

Lord Denning argued in DHN Food Distributors v Tower Hamlets that groups of companies should be viewed as one single entity.

Group of answer choices

True

False

The key question in the case of Adams v Cape Industries was ?

Group of answer choices

It is possible for a company to be held as a mere facade even though it was not originally set up as a sham.

The company was used for some impropriety unconnected to the corporate form.

If there was an existence of an agent-principal relationship.

Whether Cape, the parent company, had a presence in the US through it subsidiaries.

The three situations where the case of Adams v Cape limited veil lifting to are :-

1. Where the interpretation of a statute or document shows that the group of companies is to be treated as one;
2. Where a company is being used as a sham or mere facade;
3. Where there is no agent-principal relationship

WX Company produced an oil based chemical product which it sells to paint manufacturers.
Because of the unique nature of the chemical product, price is not driven by the market.
In year 2020 with good market condition, it incurred total cost of $412,000 to produce the
chemical. The invested asset is $1,487,500. The cost per unit to manufacture a gallon of the
chemical is presented as belowDirect Labor $2
Direct Material $5
Apart from this, the variable manufacturing overhead is incurred at a rate of 40% of the cost of
direct labor. Assume that 40% of the variable manufacturing cost is indirect labor, 35% of the
variable manufacturing cost is indirect material and the remaining 25% is utilities. Fixed
manufacturing overhead is also incurred.
WX Company decided to price its product to earn a 16% return on its investment, and it has taken
into account the total cost plus the mark up when pricing its chemical product. The market price
of the chemical is $13.3.
In year 2019, it reported that 40,000 gallons of chemical have been produced by WX Company. It
is the company policy to set the production volume of the current year based on the production
volume of the preceding year and the market condition in the current year. If the market condition
of the current year is good, there will be 25% increase in production volume compared with the
preceding year. If the market condition of the current year is bad, there will be 20% decrease in
production volume compared with the preceding year.
In year 2020, WX Company is considering whether it can manufacture the paint itself. If the
company process the chemical further and manufacture the paint by itself (one gallon of chemical
can be further processed into one gallon of paint), the cost of indirect material will increase by
50%, the cost of indirect labor will rise by $0.09, the cost of utilities will remain the same,
additional cost for direct material per gallon is $1.8 and additional cost for direct labor per gallon
is $0.7. It is the company policy that the selling price of paint is driven by the market. If the
company processes the chemical further and manufactures the paint by itself, the invested assets
will increase by 41% and the fixed cost of production will increase by 50% compared with the
original situation that it produced an oil-based chemical product which it sells to paint
manufactures. The market price of the paint product is $16.5.

Required:
(a) Determine the fixed cost per unit (gallon) for the original situation that it produced an oil
based chemical product which it sells to paint manufactures. Show workings.

(b) Determine the net income per gallon for selling chemical. Reconcile the net income per gallon
with the difference between selling price and total cost per gallon. Show workings.

(c) Determine the incremental per gallon increase in net income and the total increase in net
income if the company manufactures the paint (under the same 2020 production volume).

(d) What is the accounting implication if there is high differentiation between the paint products
produced by WX Company and that produced by other competitors? Explain and provide
supporting calculations.

(e) What is the accounting implication if the invested asset amount has been overstated? Explain.

(f) What is the accounting implication if the company has considered the variable cost only
instead of full cost when pricing its chemical product? Explain.

WX Company produced an oil based chemical product which it sells to paint manufacturers. Because of the unique nature of the chemical product, price is not driven by the market. In year 2020 with good market condition, it incurred total cost of $412,000 to produce the chemical. The invested asset is $1,487,500. The cost per unit to manufacture a gallon of the chemical is presented as below

Direct Labor $2

Direct Material $5

Apart from this, the variable manufacturing overhead is incurred at a rate of 40% of the cost of direct labor. Assume that 40% of the variable manufacturing cost is indirect labor, 35% of the variable manufacturing cost is indirect material and the remaining 25% is utilities. Fixed manufacturing overhead is also incurred.

WX Company decided to price its product to earn a 16% return on its investment, and it has taken into account the total cost plus the mark up when pricing its chemical product. The market price of the chemical is $13.3.

In year 2019, it reported that 40,000 gallons of chemical have been produced by WX Company. It is the company policy to set the production volume of the current year based on the production volume of the preceding year and the market condition in the current year. If the market condition of the current year is good, there will be 25% increase in production volume compared with the preceding year. If the market condition of the current year is bad, there will be 20% decrease in production volume compared with the preceding year.

In year 2020, WX Company is considering whether it can manufacture the paint itself. If the company process the chemical further and manufacture the paint by itself (one gallon of chemical can be further processed into one gallon of paint), the cost of indirect material will increase by 50%, the cost of indirect labor will rise by $0.09, the cost of utilities will remain the same, additional cost for direct material per gallon is $1.8 and additional cost for direct labor per gallon is $0.7. It is the company policy that the selling price of paint is driven by the market. If the company processes the chemical further and manufactures the paint by itself, the invested assets will increase by 41% and the fixed cost of production will increase by 50% compared with the original situation that it produced an oil-based chemical product which it sells to paint manufactures. The market price of the paint product is $16.5.

(a) Determine the fixed cost per unit (gallon) for the original situation that it produced an oil based chemical product which it sells to paint manufactures. Show workings.

(b) Determine the net income per gallon for selling chemical. Reconcile the net income per gallon with the difference between selling price and total cost per gallon. Show workings.

(c) Determine the incremental per gallon increase in net income and the total increase in net income if the company manufactures the paint (under the same 2020 production volume).

(d) What is the accounting implication if there is high differentiation between the paint products produced by WX Company and that produced by other competitors? Explain and provide supporting calculations.

(e) What is the accounting implication if the invested asset amount has been overstated? Explain.

(f) What is the accounting implication if the company has considered the variable cost only instead of full cost when pricing its chemical product? Explain.

WX Company produced an oil based chemical product which it sells to paint manufacturers. Because of the unique nature of the chemical product, price is not driven by the market.

In year 2020 with good market condition, it incurred total cost of $412,000 to produce the chemical. The invested asset is $1,487,500. The cost per unit to manufacture a gallon of the chemical is presented as below

Direct Labor $2

Direct Material $5

Apart from this, the variable manufacturing overhead is incurred at a rate of 40% of the cost of direct labor. Assume that 40% of the variable manufacturing cost is indirect labor, 35% of the variable manufacturing cost is indirect material and the remaining 25% is utilities. Fixed manufacturing overhead is also incurred.

WX Company decided to price its product to earn a 16% return on its investment, and it has taken into account the total cost plus the mark up when pricing its chemical product. The market price of the chemical is $13.3.

In year 2019, it reported that 40,000 gallons of chemical have been produced by WX Company. It is the company policy to set the production volume of the current year based on the production volume of the preceding year and the market condition in the current year. If the market condition of the current year is good, there will be 25% increase in production volume compared with the preceding year. If the market condition of the current year is bad, there will be 20% decrease in production volume compared with the preceding year.

In year 2020, WX Company is considering whether it can manufacture the paint itself. If the company process the chemical further and manufacture the paint by itself (one gallon of chemical can be further processed into one gallon of paint), the cost of indirect material will increase by 50%, the cost of indirect labor will rise by $0.09, the cost of utilities will remain the same, additional cost for direct material per gallon is $1.8 and additional cost for direct labor per gallon is $0.7. It is the company policy that the selling price of paint is driven by the market. If the company processes the chemical further and manufactures the paint by itself, the invested assets will increase by 41% and the fixed cost of production will increase by 50% compared with the original situation that it produced an oil-based chemical product which it sells to paint manufactures. The market price of the paint product is $16.5.

Required:

(a) Determine the fixed cost per unit (gallon) for the original situation that it produced an oil based chemical product which it sells to paint manufactures. Show workings.

(b) Determine the net income per gallon for selling chemical. Reconcile the net income per gallon with the difference between selling price and total cost per gallon. Show workings.

(c) Determine the incremental per gallon increase in net income and the total increase in net income if the company manufactures the paint (under the same 2020 production volume).

(d) What is the accounting implication if there is high differentiation between the paint products produced by WX Company and that produced by other competitors? Explain and provide supporting calculations.

(e) What is the accounting implication if the invested asset amount has been overstated? Explain.

(f) What is the accounting implication if the company has considered the variable cost only instead of full cost when pricing its chemical product? Explain.

WX Company produced an oil based chemical product which it sells to paint manufacturers. Because of the unique nature of the chemical product, price is not driven by the market. In year 2020 with good market condition, it incurred total cost of $412,000 to produce the chemical. The invested asset is $1,487,500. The cost per unit to manufacture a gallon of the chemical is presented as belowDirect Labor $2 Direct Material $5 Apart from this, the variable manufacturing overhead is incurred at a rate of 40% of the cost of direct labor. Assume that 40% of the variable manufacturing cost is indirect labor, 35% of the variable manufacturing cost is indirect material and the remaining 25% is utilities. Fixed manufacturing overhead is also incurred. WX Company decided to price its product to earn a 16% return on its investment, and it has taken into account the total cost plus the mark up when pricing its chemical product. The market price of the chemical is $13.3. In year 2019, it reported that 40,000 gallons of chemical have been produced by WX Company. It is the company policy to set the production volume of the current year based on the production volume of the preceding year and the market condition in the current year. If the market condition of the current year is good, there will be 25% increase in production volume compared with the preceding year. If the market condition of the current year is bad, there will be 20% decrease in production volume compared with the preceding year. In year 2020, WX Company is considering whether it can manufacture the paint itself. If the company process the chemical further and manufacture the paint by itself (one gallon of chemical can be further processed into one gallon of paint), the cost of indirect material will increase by 50%, the cost of indirect labor will rise by $0.09, the cost of utilities will remain the same, additional cost for direct material per gallon is $1.8 and additional cost for direct labor per gallon is $0.7. It is the company policy that the selling price of paint is driven by the market. If the company processes the chemical further and manufactures the paint by itself, the invested assets will increase by 41% and the fixed cost of production will increase by 50% compared with the original situation that it produced an oil-based chemical product which it sells to paint manufactures. The market price of the paint product is $16.5.

(a) Determine the fixed cost per unit (gallon) for the original situation that it produced an oil based chemical product which it sells to paint manufactures. Show workings. (b) Determine the net income per gallon for selling chemical. Reconcile the net income per gallon with the difference between selling price and total cost per gallon. Show workings. (c) Determine the incremental per gallon increase in net income and the total increase in net income if the company manufactures the paint (under the same 2020 production volume). (d) What is the accounting implication if there is high differentiation between the paint products produced by WX Company and that produced by other competitors? Explain and provide supporting calculations. (e) What is the accounting implication if the invested asset amount has been overstated? Explain. (f) What is the accounting implication if the company has considered the variable cost only instead of full cost when pricing its chemical product? Explain.

In 2016, the World Health Organization estimated that the average obesity rate worldwide was 13%[1]. (This includes all countries of the world, not just the countries in the sample.)

[1] Source: World Health Organization.

1. Using the sorted data, determine the probability that a randomly selected country from the sample has an obesity rate greater than the worldwide rate. Show your work and round your answer to the nearest thousandth.

2. Examining the dataset, can you suggest a reason for the high proportion of countries in the dataset having an obesity rate above the worldwide average? State your reason(s) below:

3. Suppose that fifteen of the countries from the dataset were going to be randomly selected for a study to see if the obesity rates were greater than the worldwide obesity rate. Determine if this group could be treated as a binomial distribution. State each requirement.

The US unemployment rate (actual unemployment, u) is 8.4 percent, while the natural rate of unemployment (nru) is 4.4 percent.

(i) Using Okun's Law, compute the US current percentage GDP gap. Show your computation. (ii) State your answer in words, comparing actual to potential output. (iii) Is the US GDP gap positive or negative—and why?

Note: "Okun’s Law Arthur Okun was the first macroeconomist to quantify the inverse relationship between the actual unemployment rate and the GDP gap. He noticed that, on average:
GDP gap = −2.0 × (actual unemployment rate − natural unemployment rate)"

The note is from one of my textbooks, is the formula provided above, Okun's Law formula?

Say you are a currency trader. You know from your Bloomberg database terminal that the spot rate is US$0.8545 = NZ$1, NZ Treasury Bills offer a return of 5 percent per anum, US Treasury Bills offer 2 percent per anum, and the one year forward rate is US$0.8224.

NewZealand dollar is domsetic currency.

a) Say you are trying to work out if the current forward rate to see if the markets are in equilibrium, or they are in disequilibrium and you can make profits by trading currencies. What would you conclude? Why?

b) We know the Reserve Bank is increasing domestic interest rates. How will this change your calculations? Why

Ratchet Company uses budgets in controlling costs. The August 2020 budget report for the company’s Assembling Department is as follows. RATCHET COMPANY Budget Report Assembling Department For the Month Ended August 31, 2020 Difference Manufacturing Costs Budget Actual Favorable Unfavorable Neither Favorable nor Unfavorable Variable costs Direct materials $48,000 $47,000 $1,000 Favorable Direct labor 54,000 51,200 2,800 Favorable Indirect materials 24,000 24,200 200 Unfavorable Indirect labor 18,000 17,500 500 Favorable Utilities 15,000 14,900 100 Favorable Maintenance 12,000 12,400 400 Unfavorable Total variable 171,000 167,200 3,800 Favorable Fixed costs Rent 12,000 12,000 –0– Neither Favorable nor Unfavorable Supervision 17,000 17,000 –0– Neither Favorable nor Unfavorable Depreciation 6,000 6,000 –0– Neither Favorable nor Unfavorable Total fixed 35,000 35,000 –0– Neither Favorable nor Unfavorable Total costs $206,000 $202,200 $3,800 Favorable The monthly budget amounts in the report were based on an expected production of 60,000 units per month or 720,000 units per year. The Assembling Department manager is pleased with the report and expects a raise, or at least praise for a job well done. The company president, however, is unhappy with the results for August because only 58,000 units were produced. (a) State the total monthly budgeted cost formula. (Round cost per unit to 2 decimal places, e.g. 1.25.) The formula is $ + variable costs of $ per unit. (b) Prepare a budget report for August using flexible budget data. (List variable costs before fixed costs.) RATCHET COMPANY Assembling Department Flexible Budget Report For the Month Ended August 31, 2020 Difference Budget Actual Costs Favorable Unfavorable Neither Favorable nor Unfavorable $ $ $ $ $ $ In September, 64,000 units were produced. Prepare the budget report using flexible budget data, assuming (1) each variable cost was 10% higher than its actual cost in August, and (2) fixed costs were the same in September as in August. (List variable costs before fixed costs.) RATCHET COMPANY Assembling Department Flexible Budget Report For the Month Ended September 30, 2020 Difference Budget Actual Costs Favorable Unfavorable Neither Favorable nor Unfavorable $ $ $ $ $ $