Oslo Company prepared the following contribution format income statement based on a sales volume of 1,000 units (the relevant range of production is 500 units to 1,500 units):

1. If sales decline to 900 units, what would be the net operating income?

Net operating income= ?

2. If the selling price increases by $2 per unit and the sales volume decreases by 100 units, what would be the net operating income?

Net operating income=?

3. If the variable cost per unit increases by $1, spending on advertising increases by $1,500, and unit sales increase by 250 units, what would be the net operating income?

Net operating income=?

4.. What is the break-even point in unit sales?

Break even points= ? Units

5. What is the break-even point in dollar sales?

Break even point= ?

6. How many units must be sold to achieve a target profit of $5,000?

Number of units=?

7. What is the margin of safety in dollars? What is the margin of safety percentage?

- Class DiscountPolicy is an abstract class with a method called computeDiscount, which returns the discount for the purchase of items. DiscountPolicy knows the name of the item and its cost as well as the number of items being purchased.

- Class BulkDiscount, derived from DiscountPolicy, has two fields, minimum and percentage. computeDiscount method will return the discount based on the percentage applied, if the quantity of items purchased is more than minimum.
For example: if minimum is 3 and the number of items purchased is 5, then there will be 10% discount on the total amount.

- Class BuyNGet1Free, derived from DiscountPolicy, has a single field called n. computeDiscount method will compute discount so that every n^th item is free.
For example: for an item that costs $10 and when n is 3 -- purchase of 2 items results in no discount; purchase of 4 items results in a discount of $10, since the third item is free.

- The tester should create 10 different instances/objects of the classes, add them to an ArrayList of DiscountPolicy type. Do not create an object reference for each one. Tester should test the methods of classes and should show your knowledge of polymorphism.

Be sure to implement ALL classes as completely as a class should be, i.e. constructors, get, set, toString, and equals methods.

in java langauge

Internal Rate of Return Manzer Enterprises is considering two independent investments:

A new automated materials handling system that costs $900,000 and will produce net cash inflows of $300,000 at the end of each year for the next four years.

A computer-aided manufacturing system that costs $775,000 and will produce labor savings of $400,000 and $500,000 at the end of the first year and second year, respectively.

Manzer has a cost of capital of 8 percent.

The present value tables provided in Exhibit 19B.1 and Exhibit 19B.2 must be used to solve the following problems.

Required:

1. Calculate the IRR for the first investment. Enter your answers as whole percentage values (for example, 16% should be entered as "16" in the answer box).

Between____________ % and_____________ %.

Determine if it is acceptable or not.

Acceptable

2. Calculate the IRR of the second investment. Use 12 percent as the first guess. Enter your answers as whole percentage values (for example, 16% should be entered as "16" in the answer box).

Between __________% and__________ %.

Comment on its acceptability.

Acceptable

3. What if the cash flows for the first investment are $250,000 instead of $300,000? Give your answer to the nearest whole percent.

The IRR would be about______________ %

Income Statement

Pietro Frozen Foods, Inc., produces frozen pizzas. For next year, Pietro predicts that 47,700 units will be produced, with the following total costs:

Next year, Pietro expects to purchase $122,000 of direct materials. Projected beginning and ending inventories for direct materials and work in process are as follows:

Next year, Pietro expects to produce 47,700 units and sell 47,000 units at a price of $15.00 each. Beginning inventory of finished goods is $47,500, and ending inventory of finished goods is expected to be $39,000. Total selling expense is projected at $29,000, and total administrative expense is projected at $110,500.

Required:

1. Prepare an income statement in good form. Round the percent to four decimal places before converting to a percentage. For example, .88349 would be rounded to .8835 and entered as 88.35.

2. What if the cost of goods sold percentage for the past few years was 57.93 percent? Management's reaction might be:

Income Statement

Pietro Frozen Foods, Inc., produces frozen pizzas. For next year, Pietro predicts that 54,900 units will be produced, with the following total costs:

Next year, Pietro expects to purchase $126,500 of direct materials. Projected beginning and ending inventories for direct materials and work in process are as follows:

Next year, Pietro expects to produce 54,900 units and sell 54,200 units at a price of $18.00 each. Beginning inventory of finished goods is $38,500, and ending inventory of finished goods is expected to be $30,000. Total selling expense is projected at $26,500, and total administrative expense is projected at $114,000.

Required:

1. Prepare an income statement in good form. Round the percent to four decimal places before converting to a percentage. For example, .88349 would be rounded to .8835 and entered as 88.35.

2. What if the cost of goods sold percentage for the past few years was 44.85 percent? Management's reaction might be:

Q.1) Emirates Steel Company reported the following accounting values:

Required:

Part 1:

a. Compute contribution margin.

b. Compute contribution margin percentage.

c. Compute gross margin.

d. Compute gross margin percentage.

e. Compute operating income.

Part-2:

Write a note on the above retrieved ratios and give comments whether investment in the shares of M/s Emirates Steel Company is a prudent decision as an investor or not? In both cases, respond why you taken decision of ‘Yes’ or ‘No’ (give reasons)?

Q.2) Pepsi Cola Company wants to estimate the cost for each process. It is a beverage manufacturing unit and only produce different flavors of beverages.

Required:

a. Classify each of the following costs as either direct or indirect with respect to production process.

b. Classify each of the following costs as either fixed or variable with respect to Pepsi Cola Company per day.

You have been recruited by a former classmate, Susanna Wu, to join the finance team of a company that she founded recently. The company produces a unique product line of hypoallergenic cosmetics and relies for its success on an aggressive marketing program. The company is in a start-up phase and therefore has no significant history of expenses and revenues upon which to rely for budgeting and planning purposes. Given the restriction on available funds (most of the available capital has been used for new-product development and to recruit a management team), the control of costs, including marketing costs, is thought by the management team to be essential for the short-term viability of the company.

You have held a number of intensive discussions with Susanna and John Thompson, director of marketing for the firm. They have asked you to prepare an estimated budget for marketing expenses for a month of operations.

You are provided with the following data, which represent average actual monthly costs over the past three months:

Your discussions with John and Susanna indicate the following assumptions and anticipated changes regarding monthly marketing expenses for the coming year:

• Sales volume, because of aggressive marketing, should increase by 12%.
• To meet competitive pressures, sales prices are expected to decrease by 6%.
• Sales commissions are based on a percentage of sales revenue.
• Sales staff salaries, because of a new hire, will increase by 12%, regardless of sales volume.
• Because of recent industrywide factors, rates for telephone and mailing costs, as well as delivery charges, are expected to increase by 9%. However, both of these categories of costs are variable with sales volume.
• Rent on the office building is based on a 2-year lease, with 19 months remaining on the original lease.
• Gas utility costs are largely independent of changes in sales volume. However, because of industrywide disruptions in supply, these costs are expected to increase by 17%, regardless of changes in sales volume.
• Depreciation on the office furniture used by members of the sales staff should increase because of new equipment that will be acquired. The planned cost for this equipment is $28,800, which will be depreciated using the straight-line (SL) method, with no salvage value, over a 4-year useful life.
• Because of competitive pressure, the company plans to increase the cost of marketing consultants by $4,500 per month.

Required:

1. Based on the preceding information, what is the percentage change, by line item and in total, for items in your budget? (Round percentage answers to 2 decimal places. i.e. 0.1234 should be considered as 12.34%.)

2. The management team is worried about the short-term financial position of the new company. Given the strain on available cash, the president has expressed a desire to keep marketing expenses over the next few months to a maximum of $363,000. Discussions with the marketing department indicate that telephone and mailing costs are the only category, in the short run, that can reasonably bear the planned-for reduction in marketing costs. The budget you have prepared includes an assumed 9% increase in telephone and mailing costs. What must this percentage change (positive or negative) be in order to achieve targeted monthly marketing costs? (Hint: The Goal Seek function in Excel can be used to calculate the percentage changes, which can be found under Data, then What-If Analysis.)  (Negative amounts should be indicated by a minus sign. Round percentage answers to 2 decimal places. i.e. 0.123 should be considered as 12.30%)

***PLEASE SHOW ALL WORK IN A WORKING NOTE. ITS IMPORTANT FOR ME TO UNDERSTAND HOW YOU ANSWERED THIS QUESTION. THANK YOU! *****

You have been recruited by a former classmate, Susanna Wu, to join the finance team of a company that she founded recently. The company produces a unique product line of hypoallergenic cosmetics and relies for its success on an aggressive marketing program. The company is in a start-up phase and therefore has no significant history of expenses and revenues upon which to rely for budgeting and planning purposes. Given the restriction on available funds (most of the available capital has been used for new-product development and to recruit a management team), the control of costs, including marketing costs, is thought by the management team to be essential for the short-term viability of the company.

You have held a number of intensive discussions with Susanna and John Thompson, director of marketing for the firm. They have asked you to prepare an estimated budget for marketing expenses for a month of operations.

You are provided with the following data, which represent average actual monthly costs over the past three months:

Your discussions with John and Susanna indicate the following assumptions and anticipated changes regarding monthly marketing expenses for the coming year:

• Sales volume, because of aggressive marketing, should increase by 12%.
• To meet competitive pressures, sales prices are expected to decrease by 6%.
• Sales commissions are based on a percentage of sales revenue.
• Sales staff salaries, because of a new hire, will increase by 12%, regardless of sales volume.
• Because of recent industrywide factors, rates for telephone and mailing costs, as well as delivery charges, are expected to increase by 9%. However, both of these categories of costs are variable with sales volume.
• Rent on the office building is based on a 2-year lease, with 19 months remaining on the original lease.
• Gas utility costs are largely independent of changes in sales volume. However, because of industrywide disruptions in supply, these costs are expected to increase by 17%, regardless of changes in sales volume.
• Depreciation on the office furniture used by members of the sales staff should increase because of new equipment that will be acquired. The planned cost for this equipment is $28,800, which will be depreciated using the straight-line (SL) method, with no salvage value, over a 4-year useful life.
• Because of competitive pressure, the company plans to increase the cost of marketing consultants by $4,500 per month.

Required:

1. Based on the preceding information, what is the percentage change, by line item and in total, for items in your budget? (Round percentage answers to 2 decimal places. i.e. 0.1234 should be considered as 12.34%.)

2. The management team is worried about the short-term financial position of the new company. Given the strain on available cash, the president has expressed a desire to keep marketing expenses over the next few months to a maximum of $363,000. Discussions with the marketing department indicate that telephone and mailing costs are the only category, in the short run, that can reasonably bear the planned-for reduction in marketing costs. The budget you have prepared includes an assumed 9% increase in telephone and mailing costs. What must this percentage change (positive or negative) be in order to achieve targeted monthly marketing costs? (Hint: The Goal Seek function in Excel can be used to calculate the percentage changes, which can be found under Data, then What-If Analysis.)  (Negative amounts should be indicated by a minus sign. Round percentage answers to 2 decimal places. i.e. 0.123 should be considered as 12.30%)

***PLEASE SHOW ALL WORK IN A WORKING NOTE. ITS IMPORTANT FOR ME TO UNDERSTAND HOW YOU ANSWERED THIS QUESTION. THANK YOU! *****

Physical Units Method, Relative Sales-Value-at-Split-off Method, Net Realizable Value Method, Decision Making

Sonimad Sawmill, Inc. (SSI), purchases logs from independent timber contractors and processes them into the following three types of lumber products:

1. Studs for residential construction (e.g., walls and ceilings)
2. Decorative pieces (e.g., fireplace mantels and beams for cathedral ceilings)
3. Posts used as support braces (e.g., mine support braces and braces for exterior fences around ranch properties)

These products are the result of a joint sawmill process that involves removing bark from the logs, cutting the logs into a workable size (ranging from 8 to 16 feet in length), and then cutting the individual products from the logs, depending upon the type of wood (pine, oak, walnut, or maple) and the size (diameter) of the log.

The joint process results in the following costs and output of products during a typical month:

Product yield and average sales value on a per-unit basis from the joint process are as follows:

The studs are sold as rough-cut lumber after emerging from the sawmill operation without further processing by SSI. Also, the posts require no further processing. The decorative pieces must be planed and further sized after emerging from the SSI sawmill. This additional processing costs SSI $100,000 per month and normally results in a loss of 10 percent of the units entering the process. Without this planing and sizing process, there is still an active intermediate market for the unfinished decorative pieces where the sales price averages $60 per unit.

Required:

1. Based on the information given for Sonimad Sawmill, Inc., allocate the joint processing costs of $1,000,000 to each of the three product lines using the:

a. Relative sales-value-at-split-off method. When required, round decimal values to four places before converting to a percentage. For example, .88349 would be rounded to .8835 and entered as "88.35" percent.

b. Physical units method at split-off.

c. Estimated net realizable value method. When required, round decimal values to four places before converting to a percentage. For example, .88349 would be rounded to .8835 and entered as "88.35" percent.

Feedback

1. a. The sales-value-at split-off method allocates joint cost based on each product’s proportionate share of market or sales value at the split-off point. b. The physical units method allocates the cost in proportion to the number of units and is useful when the value of one product is close to the value of another product. c. The net realizable value method is used when one or more of the joint products cannot be sold at split-off. In this case, a hypothetical market value is constructed so that joint cost allocation can be done as close to the split-off point as possible.

2. Prepare an analysis for Sonimad Sawmill, Inc., to compare processing the decorative pieces further as it presently does, with selling the rough-cut product immediately at split-off.

Physical Units Method, Relative Sales-Value-at-Split-off Method, Net Realizable Value Method, Decision Making Sonimad Sawmill, Inc. (SSI), purchases logs from independent timber contractors and processes them into the following three types of lumber products: Studs for residential construction (e.g., walls and ceilings) Decorative pieces (e.g., fireplace mantels and beams for cathedral ceilings) Posts used as support braces (e.g., mine support braces and braces for exterior fences around ranch properties) These products are the result of a joint sawmill process that involves removing bark from the logs, cutting the logs into a workable size (ranging from 8 to 16 feet in length), and then cutting the individual products from the logs, depending upon the type of wood (pine, oak, walnut, or maple) and the size (diameter) of the log. The joint process results in the following costs and output of products during a typical month:

Joint production costs:

Materials (rough timber logs) $500,000

Debarking (labor and overhead) 60,000

Sizing (labor and overhead) 200,000

Product cutting (labor and overhead) 260,000

Total joint costs $1,020,000

Product yield and average sales value on a per-unit basis from the joint process are as follows:

Product Monthly Output    Fully Processed Sales Price

Studs    75,000 $8

Decorative pieces    5,000 100

Posts 20,000 20

The studs are sold as rough-cut lumber after emerging from the sawmill operation without further processing by SSI. Also, the posts require no further processing. The decorative pieces must be planed and further sized after emerging from the SSI sawmill. This additional processing costs SSI $120,000 per month and normally results in a loss of 10 percent of the units entering the process. Without this planing and sizing process, there is still an active intermediate market for the unfinished decorative pieces where the sales price averages $60 per unit.

Required:

1. Based on the information given for Sonimad Sawmill, Inc., allocate the joint processing costs of $1,020,000 to each of the three product lines using the:

a. Relative sales-value-at-split-off method. When required, round decimal values to four places before converting to a percentage. For example, .88349 would be rounded to .8835 and entered as "88.35" percent.

   Monthly Unit Output    Sales Price per Unit    Relative Sales Value at Split-Off    Percent of Sales    Allocated Joint Costs

Studs $ ________ $ ________    $________    _______%    $_________

Decorative pieces    $________    $_________ $_________    _______ % $_________

Posts    $_______    $__________ $__________ ________ %    $_________

Total $_______    $___________ $__________ ________ %    $__________

(Note: Difference due to rounding.)

b. Physical units method at split-off.

Units    Percent x    Joint Cost    = Allocated Joint Costs

Studs _______units    _______% $_______    $_________

Decorative pieces    _______units    ________% $ ________ $__________

Posts ________units ________% $_________    $___________

Total _____units $_________

c. Estimated net realizable value method. When required, round decimal values to four places before converting to a percentage. For example, .88349 would be rounded to .8835 and entered as "88.35" percent.

Fully Processed Monthly Unit Output/Sales Price per Unit/ Net Realizable Value/Percent of Value/Estimated Allocated Joint Costs Studs _______unit $______________    $_____________    __________%    $____________

Decorative pieces    ________unit $______________    $_____________    __________%    $____________

Posts    ________unit    $_______________    $____________    _________    %    $_____________

Total $_____________ _________    %    $_____________

(Note: Difference due to rounding.) .

Feedback 1. a. The sales-value-at split-off method allocates joint cost based on each product’s proportionate share of market or sales value at the split-off point. b. The physical units method allocates the cost in proportion to the number of units and is useful when the value of one product is close to the value of another product. c. The net realizable value method is used when one or more of the joint products cannot be sold at split-off. In this case, a hypothetical market value is constructed so that joint cost allocation can be done as close to the split-off point as possible.

2. Prepare an analysis for Sonimad Sawmill, Inc., to compare processing the decorative pieces further as it presently does, with selling the rough-cut product immediately at split-off. Sonimad Sawmill, Inc. Analysis Report

Monthly unit output ______________

Less: Normal further processing shrinkage ________________

Units available for sale _____________

Final sales value $

Less: Sales value at split-off _______________

Differential revenue $

Less: Further processing costs _____________

Additional contribution from further processing $