1-The capital budgeting method that calculates the discount rate at which the present value of expected cash inflows from a project equals the present value of expected cash outflows is the ________.

1) When GK, a company producing razors and shaving accessories for men, asks supermarkets to give its new razors shelf space and special displays, it is using a

a) pull strategy.

b) positioning strategy.

c) pricefixing approach.

d) push strategy.

e) publicity campaign.

2) Which of the following is true regarding a product's progression through the product life cycle?

a) The product stages always go one way, and a product's progression through the stages cannot be reversed.

b) Some products that have moved to the maturity stage or to the decline stage can still rebound through redesign or new uses for the product.

c) Even when products start to decline and new products are introduced to take their place, it can be detrimental to a company's business to phase out any of its products.

d) The only stage in which the product profits is the introductory stage.

e) It is not unusual for technology products to go slowly through the life cycle because these products maintain traction longer than other types of products.

3) Martin's Cleaning Supplies Company has an idea for a cleaner that is universal and can clean any surface type. This could simplify the cleaning process for homeowners as well as janitors and other professional cleaners. The most important question this company should consider when deciding whether to develop this product, in terms of business analysis, is

a) will enough customers want to replace their existing cleaning supplies with this product?

b) how will the product affect the firm's sales, costs, and profits?

c) does this product contain any ingredients that can harm the environment or customers?

d) are there any uses for this product in other industries?

e) can the firm afford to produce this new product?

Auto Renovators2 is a leading classic car restoration company in Australia. The company has been well-known for renovating thousands of classic cars in Australia according to customers’ orders. In February, the company has worked on five jobs, numbered 301 to 305. Direct materials used, direct labour incurred in February were as shown in the following table.

Manufacturing overheads during February included indirect material ($ 1100), indirect labour ($ 2750), rent ($ 2000), depreciation ($ 1300), insurance ($ 250), utilities ($ 800), and other manufacturing costs ($ 400).

At the beginning of the month, management anticipated that overhead cost would be $ 9100 and total direct labour would amount to $ 6500. Overhead is allocated on the basis of direct labour dollars.

Jobs 301 to 303 were finished during the month; Jobs 304 and 305 is still in process. Jobs 301 to 303 were picked up and paid by customers for $ 6100, $ 4800, $ 3700.

Required

1.       Determine the company’s predetermined overhead rate.

2.       Prepare the journal entries to reflect the following: the incurrence of materials, labour, and actual overhead costs; the allocation of overhead; and the transfer of job costs to finished goods inventory and cost of goods sold (Note: Use summary entries where appropriate by combining individual job data).

3.       In your own words, describe the two different approaches to closing overapplied or underapplied overhead at the end of the month. How do you choose an appropriate method? Calculate the amount of overapplied or underapplied overhead to be closed and prepare an appropriate journal entry.

Markov Processes (Market Share Analysis)
In Westvale, a small rural town in Maine, virtually all shopping and business are done in the town. The town has one farm and garden center that sells fertilizer to the local farmers and gardeners. The center carries three brands of fertilizer--- Plant plus, Crop extra, and Gro-fast--- so every person in the town who uses fertilizer uses one of the three brands. The garden center has 9,000 customers for fertilizer each spring. An extensive market research study has determined that customers switch brands of fertilizer according to the following probability transition matrix

The number of customers presently using each brand of fertilizer is shown in the following table

A) Determine the steady-state probabilities for the fertilizer brands.
B) Forecast the customer demand for each brand of fertilizer in the long run and the changes in customer demand.

A die has been "loaded" so that the probability of rolling any even number is

and the probability of rolling any odd number is

. (Assume the die is six-sided with each side numbered one through six.)

(a)

Find the following probabilities. Enter your probabilities as fractions.

What is the probability of rolling a 2, given that an even number is rolled?

(b)

Find the following probabilities. Enter your probabilities as fractions.

What is the probability of rolling a 3, given that a number divisible by 3 is rolled?

A bag contains 5 red balls and 7 white balls. Two balls are drawn without replacement. (Enter your probabilities as fractions.)

(a) What is the probability that the second ball is white, given that the first ball is red?


(b) What is the probability that the second ball is red, given that the first ball is white?


(c) Answer part (a) if the first ball is replaced before the second is drawn.

A red ball and 5 white balls are in a box. If two balls are drawn, without replacement, what is the probability of getting each of the following? (Enter your probabilities as fractions.)

(a) a red ball on the first draw and a white ball on the second


(b) 2 white balls


(c) 2 red balls

Allocating Selling and Administrative Expenses using Activity-Based Costing

Shrute Inc. manufactures office copiers, which are sold to retailers. The price and cost of goods sold for each copier are as follows:

Price$690 per unit

Cost of goods sold(410)

Gross profit$280 per unit

In addition, the company incurs selling and administrative expenses of $263,410. The company wishes to assign these costs to its three major retail customers, The Warehouse, Kosmo Co., and Supply Universe. These expenses are related to its three major nonmanufacturing activities: customer service, sales order processing, and advertising support. The advertising support is in the form of advertisements that are placed by Shrute Inc. to support the retailer's sale of Shrute copiers to consumers. The budgeted activity costs and activity bases associated with these activities are:

ActivityBudgeted Activity CostActivity Base

Customer service $30,030 Number of service requests

Sales order processing 27,880 Number of sales orders

Advertising support 205,500 Number of ads placed

Total activity cost $263,410  

Activity-base usage and unit volume information for the three customers is as follows:

The WarehouseKosmo Co.Supply UniverseTotal

Number of service requests40  10 160 210

Number of sales orders230  100 490 820

Number of ads placed20  20 110 150

Unit volume690  690 690 2,070

Required:

1.   Determine the activity rates for each of the three nonmanufacturing activities. Round to the nearest whole dollar.

Activity Rate

Customer Service$per serv. req.

Sales Order Processing$per sls. order

Advertising Support$per ad

2. Determine the activity costs allocated to the three customers, using the activity rates in (1).

Activity Costs

The Warehouse$

Kosmo Co.$

Supply Universe$

3.   Construct customer profitability reports for the three customers, dated for the year ended December 31, using the activity costs in (2). The reports should disclose the gross profit and operating income associated with each customer.

Shrute Inc.

Customer Profitability Report

For the Year Ended December 31

The WarehouseKosmo Co.Supply Universe

Revenues$$$

Cost of goods sold

Gross profit$$$

Selling and administrative activities:

Customer service$$$

Sales order processing

Advertising support

Total selling and administrative activities$

Operating income$$$

Mike Greenberg opened Bramble Window Washing Inc. on July 1, 2017. During July, the following transactions were completed.

The chart of accounts for Bramble Window Washing contains the following accounts: Cash, Accounts Receivable, Supplies, Prepaid Insurance, Equipment, Accumulated Depreciation—Equipment, Accounts Payable, Salaries and Wages Payable, Common Stock, Retained Earnings, Dividends, Income Summary, Service Revenue, Maintenance and Repairs Expense, Supplies Expense, Depreciation Expense, Insurance Expense, and Salaries and Wages Expense.

1. Journalize the July transactions.

2. Post to the ledger accounts.

3. Prepare a trial balance at July 31.

4.

Journalize the following adjustments.

5.

Post adjusting entries to the T-accounts.

6. Prepare an adjusted trial balance.

7. Prepare the income statement for July.

8. Prepare a retained earnings statement for July. (List items that increase retained earnings first.)

9. Prepare a classified balance sheet at July 31. (List Current Assets in order of liquidity.)

10. Journalize and post closing entries and complete the closing process.

3. Use data in BUSI1013 Credit Card Balance.xlsx to complete the following. You will need to use a statistical package such as StatTools or the Regression program within Excel’s Data Analysis Add-in to generate the estimated regression equation and the ANOVA etc. (12 points)
   
   1. What is the estimated regression equation using Account Balance as the dependent variable, and Income, Years of Education, as well as Size of Household as the independent variable?
   2. Comment on the goodness of fit of the model using the coefficient of determination.
   3. Conduct an F test with the critical value approach to see whether the overall model is significant. Use α = 0.01.
   4. Perform a t test with p-value approach for the significance of the Income variable. Use α = 0.05.
   5. Perform a t test with the p-value approach for the significance of the Size of Household variable. Use α = 0.05.
   6. Estimate the Account Balance of a customer who has an income of $62 thousand, 14 years of education, and a household size of 3.

1. Use data in BUSI1013 Credit Card Balance.xlsx to complete the following. You will need to use a statistical package such as StatTools or the Regression program within Excel’s Data Analysis Add-in to generate the estimated regression equation and the ANOVA etc. (12 points)
   What is the estimated regression equation using Account Balance as the dependent variable, and Income, Years of Education, as well as Size of Household as the independent variable?
2. a.Comment on the goodness of fit of the model using the coefficient of determination.
3. b.Conduct an F test with the critical value approach to see whether the overall model is significant. Use α = 0.01.
4. c.Perform a t test with p-value approach for the significance of the Income variable. Use α = 0.05.
5. d.Perform a t test with the p-value approach for the significance of the Size of Household variable. Use α = 0.05.
6. e.Estimate the Account Balance of a customer who has an income of $62 thousand, 14 years of education, and a household size of 3.

College Coasters is a San Diego–based merchandiser specializing in logo-adorned drink coasters. The company reported the following balances in its unadjusted trial balance at December 1.

The company buys coasters from one supplier. All amounts in Accounts Payable on December 1 are owed to that supplier. The inventory on December 1 consisted of 1,000 coasters, all of which were purchased in a batch on July 10 at a unit cost of $0.50. College Coasters records its inventory using perpetual inventory accounts and the FIFO cost flow method.

During December, the company entered into the following transactions. Some of these transactions are explained in greater detail below.

1. Purchased 500 coasters on account from the regular supplier on 12/1 at a unit cost of $0.52, with terms of n/60.
2. Purchased 1,000 coasters on account from the regular supplier on 12/2 at a unit cost of $0.55, with terms of n/60.
3. Sold 2,000 coasters on account on 12/3 at a unit price of $0.90.
4. Collected $1,000 from customers on account on 12/4.
5. Paid the supplier $1,600 cash on account on 12/18.
6. Paid employees $500 on 12/23, of which $300 related to work done in November and $200 was for wages up to December 22.
7. Loaded 100 coasters on a cargo ship on 12/31 to be delivered the following week to a customer in Kona, Hawaii. The sale was made FOB destination with terms of n/60.

Other relevant information includes the following at 12/31:

8. College Coasters has not yet recorded $200 of office expenses incurred in December on account.
9. The company estimates that the equipment depreciates at a rate of $10 per month. One month of depreciation needs to be recorded.
10. Wages for the period from December 23–31 are $100 and will be paid on January 15.
11. The $600 of Prepaid Rent relates to a six-month period ending on May 31 of next year.
12. The company incurred $789 of income tax but has made no tax payments this year.
13. No shrinkage or damage was discovered when the inventory was counted on December 31.
14. The company did not declare dividends and there were no transactions involving common stock.

What are the journal entries for a-n?