Wilkens Company Wilkens Company wants to determine the cost behavior pattern of maintenance costs. Wilkens has decided to use linear regression by employing the equation y = a + bx for maintenance costs. The prior year's data regarding maintenance hours and costs, are given in the data below.
| Hours of Activity | Maintenance cost | |
| January | 490 | 5,700 |
| February | 325 | 4,210 |
| March | 425 | 5,050 |
| April | 360 | 4,510 |
| May | 500 | 5,680 |
| June | 450 | 5,260 |
| July | 425 | 5,050 |
| August | 375 | 4,630 |
| September | 470 | 5,420 |
| October | 485 | 5,550 |
| November | 365 | 4,550 |
| December | 350 | 4,250 |
| total | 5,020 | 59,860 |
1a. Solve for A and B variable provide the graph (scatter gram) show trend line, formula, and R-Squared.
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A |
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B |
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"R-SQUARED" |
1b. Refer to the Wilkens Company. Based upon the data derived from the regression analysis, what maintenance costs should be budgeted for a month in which 485 maintenance hours will be worked?
1c. Refer to the Wilkens Company. What is the percentage of the total variance that can be explained by the regression equation?
1d. What is meant by cost behavior? Explain how it relates to the following terms: fixed, variable, and mixed cost.
In: Accounting
RE Construct, property developer, builds a residential complex consisting of 50 apartments. Apartments have a similar size and proportions – however, they can be customized to clients’ needs.
RE Construct enters into 2 contracts with 2 different clients (A and B). Both clients want to buy almost identical apartments and agree with total price of RM100,000 per apartment. The payment schedule is as follows:
Assumed period of construction is 2 years from the date of contract. RE Construct has the right to retain the payments from any client in the situation when that client defaults on the contract before its completion.
The contracts with clients A and B are NOT identical. Further contractual terms specify that:
If the client B defaults on the contract before its completion (in other words, does not make payments in line with the schedule), RE Construct has the right for all contractual price if RE Construct decides to complete the contract.
In: Accounting
The following selected accounts appear in the ledger of Upscale Construction Inc. at the beginning of the current year: Preferred 2% Stock, $80 par (200,000 shares authorized, 65,000 shares issued) $5,200,000 Paid-In Capital in Excess of Par—Preferred Stock 360,000 Common Stock, $12 par (3,000,000 shares authorized, 1,400,000 shares issued) 16,800,000 Paid-In Capital in Excess of Par—Common Stock 1,290,000 Retained Earnings 110,900,000 During the year, the corporation completed a number of transactions affecting the stockholders’ equity. They are summarized as follows:
Jan. 5 Issued 220,000 shares of common stock at $15, receiving cash.
Feb. 10 Issued 6,000 shares of preferred 2% stock at $94.
Mar. 19 Purchased 130,000 shares of treasury common for $19 per share.
May 16 Sold 70,000 shares of treasury common for $23 per share.
Aug. 25 Sold 40,000 shares of treasury common for $17 per share.
Dec. 6 Declared cash dividends of $1.60 per share on preferred stock and $0.14 per share on common stock. 31 Paid the cash dividends.
Journalize the entries to record the transactions.
In: Accounting
A vertical standard is one that applies to a specific industry such as construction. Why do you think the Occupational Safety and Health Administration (OSHA) promulgated vertical standards in the first place? To what extent do you think politics played a part in this process? Do you think there is a need for OSHA to develop more vertical standards? Why, or why not? What are your thoughts about performance standards?
In: Economics
Titania Inc. is issuing bonds to finance the construction of a new plant in Wisconsin. These bonds are being offered with a face value of $1000, a coupon rate of 9% (paid annually), and a maturity of 18 years. The current market interest rate for similar financial assets is 7% per year (compounded annually). a. Find the pure/fair price of each bond at the time of issuance. b. Find the fair price of each bond if purchase ends up being made right before the 4th coupon payment. c. Find the fair price of each bond if purchase ends up being made after before the 4th coupon payment.
In: Economics
An aircraft firm is considering three different alloys for use in the wing construction of a new airplane. Each alloy can be produced in four different thicknesses (1 = thinnest, 4 = thickest). Two test samples are constructed for each combination of alloy type and thickness, then each of the 24 test samples is subjected to a laboratory device the severely flexes it until failure occurs. For each test sample the number of flexes before failure is recorded, with the results shown in the Aircraft worksheet in the ANOVA HW data workbook on Moodle.
a) Use JMP to fit a two-way ANOVA to the data. Using alpha = 0.05 draw conclusions for the ANOVA. Make sure you state your conclusion in the context of the problem.
b) Does there appear to be a need to include the alloy type / thickness interaction term?
c) Use JMP to fit a two-way ANOVA with interaction to the data. Using alpha= 0.05 draw conclusions for the ANOVA. Make sure you state your conclusion in the context of the problem.
Alloy Thickness Flexes
Alloy A Thickness 1 804
Alloy A Thickness 1 816
Alloy A Thickness 2 819
Alloy A Thickness 2 813
Alloy A Thickness 3 820
Alloy A Thickness 3 821
Alloy A Thickness 4 806
Alloy A Thickness 4 805
Alloy B Thickness 1 836
Alloy B Thickness 1 828
Alloy B Thickness 2 844
Alloy B Thickness 2 836
Alloy B Thickness 3 814
Alloy B Thickness 3 811
Alloy B Thickness 4 811
Alloy B Thickness 4 806
Alloy C Thickness 1 804
Alloy C Thickness 1 808
Alloy C Thickness 2 807
Alloy C Thickness 2 819
Alloy C Thickness 3 819
Alloy C Thickness 3 829
Alloy C Thickness 4 827
Alloy C Thickness 4 835
In: Statistics and Probability
An aircraft firm is considering three different alloys for use in the wing construction of a new airplane. Each alloy can be produced in four different thicknesses (1 = thinnest, 4 = thickest). Two test samples are constructed for each combination of alloy type and thickness, then each of the 24 test samples is subjected to a laboratory device the severely flexes it until failure occurs. For each test sample the number of flexes before failure is recorded, with the results shown in the Aircraft worksheet in the ANOVA HW data workbook on Moodle.
a) Use JMP to fit a two-way ANOVA to the data. Using alpha = 0.05 draw conclusions for the ANOVA. Make sure you state your conclusion in the context of the problem.
b) Does there appear to be a need to include the alloy type / thickness interaction term?
c) Use JMP to fit a two-way ANOVA with interaction to the data. Using alpha= 0.05 draw conclusions for the ANOVA. Make sure you state your conclusion in the context of the problem.
Alloy Thickness Flexes
Alloy A Thickness 1 804
Alloy A Thickness 1 816
Alloy A Thickness 2 819
Alloy A Thickness 2 813
Alloy A Thickness 3 820
Alloy A Thickness 3 821
Alloy A Thickness 4 806
Alloy A Thickness 4 805
Alloy B Thickness 1 836
Alloy B Thickness 1 828
Alloy B Thickness 2 844
Alloy B Thickness 2 836
Alloy B Thickness 3 814
Alloy B Thickness 3 811
Alloy B Thickness 4 811
Alloy B Thickness 4 806
Alloy C Thickness 1 804
Alloy C Thickness 1 808
Alloy C Thickness 2 807
Alloy C Thickness 2 819
Alloy C Thickness 3 819
Alloy C Thickness 3 829
Alloy C Thickness 4 827
Alloy C Thickness 4 835
In: Statistics and Probability
Happy is planning to get a loan to finance the construction of a house, worth $2,000,000 from Baclays Bank. The bank is offering loans at an interest of 10% with a repyment period of 8years. Happy has opted to repay the loan using a balloon amortisation method, and the bank allows for a balloon repayment of 30% at the end of the loan period. Given the above information, construct an amortisation table for the loan Happy intends to take.
In: Finance
The following selected accounts appear in the ledger of Parks Construction Inc. at the beginning of the current year:
| Preferred 1% Stock, $50 par (100,000 shares authorized, 83,900 shares issued) | $4,195,000 |
| Paid-In Capital in Excess of Par—Preferred Stock | 184,580 |
| Common Stock, $3 par (5,000,000 shares authorized, 2,120,000 shares issued) | 6,360,000 |
| Paid-In Capital in Excess of Par—Common Stock | 1,590,000 |
| Retained Earnings | 31,692,000 |
During the year, the corporation completed a number of transactions affecting the stockholders’ equity. They are summarized as follows:
| Jan. | 5 | Issued 467,700 shares of common stock at $9, receiving cash. |
| Feb. | 10 | Issued 10,700 shares of preferred 1% stock at $62. |
| Mar. | 19 | Purchased 53,000 shares of treasury common for $6 per share. |
| May | 16 | Sold 20,000 shares of treasury common for $8 per share. |
| Aug. | 25 | Sold 5,200 shares of treasury common for $5 per share. |
| Dec. | 6 | Declared cash dividends of $0.50 per share on preferred stock and $0.10 per share on common stock. |
| 31 | Paid the cash dividends. |
Journalize the entries to record the transactions. Refer to the Chart of Accounts for exact wording of account titles.
In: Accounting
The following selected accounts appear in the ledger of Parks Construction Inc. at the beginning of the current year:
| Preferred 1% Stock, $50 par (100,000 shares authorized, 81,900 shares issued) | $4,095,000 |
| Paid-In Capital in Excess of Par—Preferred Stock | 155,610 |
| Common Stock, $3 par (5,000,000 shares authorized, 1,780,000 shares issued) | 5,340,000 |
| Paid-In Capital in Excess of Par—Common Stock | 1,602,000 |
| Retained Earnings | 35,256,000 |
During the year, the corporation completed a number of transactions affecting the stockholders’ equity. They are summarized as follows:
| a. | Issued 493,300 shares of common stock at $7, receiving cash. |
| b. | Issued 8,800 shares of preferred 1% stock at $60. |
| c. | Purchased 46,700 shares of treasury common for $7 per share. |
| d. | Sold 18,400 shares of treasury common for $9 per share. |
| e. | Sold 4,900 shares of treasury common for $6 per share. |
| f. | Declared cash dividends of $0.50 per share on preferred stock and $0.08 per share on common stock. |
| g. | Paid the cash dividends. |
Journalize the entries to record the transactions. Refer to the Chart of Accounts for exact wording of account titles.
CHART OF ACCOUNTS Parks Construction Inc.General Ledger
| ASSETS | |
| 110 | Cash |
| 120 | Accounts Receivable |
| 131 | Notes Receivable |
| 132 | Interest Receivable |
| 141 | Inventory |
| 145 | Office Supplies |
| 151 | Prepaid Insurance |
| 181 | Land |
| 193 | Equipment |
| 194 | Accumulated Depreciation-Equipment |
| LIABILITIES | |
| 210 | Accounts Payable |
| 221 | Notes Payable |
| 226 | Interest Payable |
| 231 | Cash Dividends Payable |
| 241 | Salaries Payable |
| 261 | Mortgage Note Payable |
| EQUITY | |
| 236 | Stock Dividends Distributable |
| 311 | Common Stock |
| 312 | Paid-In Capital in Excess of Par-Common Stock |
| 315 | Treasury Stock |
| 321 | Preferred Stock |
| 322 | Paid-In Capital in Excess of Par-Preferred Stock |
| 331 | Paid-In Capital from Sale of Treasury Stock |
| 340 | Retained Earnings |
| 351 | Cash Dividends |
| 352 | Stock Dividends |
| REVENUE | |
| 410 | Sales |
| 610 | Interest Revenue |
| EXPENSES | |
| 510 | Cost of Goods Sold |
| 515 | Credit Card Expense |
| 520 | Salaries Expense |
| 531 | Advertising Expense |
| 532 | Delivery Expense |
| 533 | Selling Expenses |
| 534 | Rent Expense |
| 535 | Insurance Expense |
| 536 | Office Supplies Expense |
| 537 | Organizational Expenses |
| 562 | Depreciation Expense-Equipment |
| 590 | Miscellaneous Expense |
| 710 | Interest Expense |
In: Accounting