Fast Printing Company presents us the information of 12 months related to the purchase costs and the number of orders placed.

1. Project the purchasing costs for the first 6 months of next year using the function or cost equation developed by you. Use the space provided in the table above. Complete the Table.

2. Determine the highest points and the lowest points, what is the COST DRIVER ??. To determine this, use the first 12 months.

3. Develop a cost equation to determine the fixed component and the variable cost component. Present the same.

4. What would be the total cost of purchases for the first half of next year?

Mabrook confectionaries LLC. is a US based chocolate manufacturing company with manufacturing unit in
Oman. The company produces different varieties of chocolates of different flavors. The company is known
for the taste and quality of its products. The company wanted to expand its operations to UAE and other GCC
countries. It developed a greed for money and wanted to earn more. On the packaging the company is printing
wrong information about ingredients used and expiry date as well. The company is also exaggerating the
quality of its products in the advertisements on print, electronic and social media. Seeing the advertisements
of the company, people in Oman and other countries started buying the company’s products. This caused ill
health to many of the company’s consumers. The company started to blame the suppliers of the raw materials
for the poor quality of its products.
Question 4:
i. What are the ethical principles Mabrook confectionaries LLC. is not following in the case study?
Discuss any five ethical principles violated by the company with supporting reasons.
(5 Marks – Answer in 125 - 150 words)
ii. Do you think Mabrook confectionaries LLC. can achieve success with its communications? What
will be the result of such communications? (2 Marks– Answer in 50 – 75 words)
iii. Discuss any three suggestions that you would give to Mabrook confectionaries LLC. for achieving
success in the long run. (3 Marks – Answer in 75 - 100 words)

Rock company (a US firm) exports to Switzerland and expects to receive 500,000 Swiss francs in one year. The one-year U.S. interest rate is 5% when investing funds and 7% when borrowing funds. The one-year Swiss interest rate is 9% when investing funds, and 11% when borrowing funds. The spot rate of the Swiss franc is $.80. The firm expects that the spot rate of the Swiss franc will be $.75 in one year. There is a put option available on Swiss francs with an exercise price of $.79 and a premium of $.02.

a)Determine the amount of dollars that Rock Co. will receive at the end of one year if it implements a money market hedge.

b)Determine the amount of dollars that Rock Co. expects to receive at the end of one year (net of option premium) if it implements a put option hedge.

1. On liquidity: How can a profitable company (defined as positive net income on a US GAAP income statement) fail due to lack of cash? How is that even possible?
2. On earnings quality: How is it possible that profit and operating cash flow could diverge? Doesn't cash flow increase when profit increases, and vice-versa? What are some scenarios that could cause divergence?
3. On improper income recognition: What does it mean "whether income has been improperly recognized, only to be reversed in the future."? How could a company try to get away with improperly recognizing income?

Initial response

For your initial response, become Jim Kramer and in this role, respond to any ONE of the three questions posed as if you were answering as Jim might answer during his visit to Clarkson. (If you are not familiar with Jim, take some time to study his persona but most importantly, respond at a level that could be understood by a novice business student.)

FIELD: Exchange Rates and International Finance
The sales manager of a US company trades iPhones in three different markets, Europe (Eurozone), UK and the USA, has just received a total amount of $1million from the selling of 1,000 iPhones (each iPhone costs $1,000). He has a week available until the payment of firm’s suppliers and employees’ salaries. The current exchange rates between the currencies of the three markets (USD $, euro € and GBP £), are: ?¹_€⁄$=0.9110, ?²_€/£=1.1712 and ?³_{$ ⁄£}=1.2910.

a) If no transaction costs exist, could the manager take advantage of an arbitrage opportunity? Explain. [Mark 1.5]
b) When will there not be any room for profits? That is, there is no arbitrage opportunity. [Mark 0.5]
c) Suppose now that there is a cost each time currency is being traded, i.e., either bought or sold. Moreover, this transaction cost is equal to 1% of the value of currency that is traded. What will the manager’s decision be in this case? [Mark 1.0]

Note: Round your answers to the third decimal point.

Sweets R Us Pty Ltd. is a large confectionary company that manufactures a range of standard sweet products and some specialty products for the Australian market. Most of the company’s production is in standard chocolate goods and they offer personalised packaging for promotional or fundraising purposes. They also provide uniquely moulded and decorated chocolate items for special events such as grand finals. You have been allocated the role of assessing the controls in the Purchases, Accounts Payable and Payments system, and have obtained the following details:

Raw material ordering process

1. To maintain and control product quality a limited number of trusted suppliers are used.
2. The production manager oversees raw material inventory. Orders are placed based on current production orders and quantities of raw material currently on hand with next day delivery where possible.
3. No formal purchase order system is used.

Raw material warehousing procedures

1. The warehouse personnel are trusted, long-term employees.
2. One of the warehousing staff ensures that all goods received, primarily raw materials, are in good order and signs the couriers’ delivery dockets in acknowledgment of materials received.
3. Movement of in and out of the warehouse is not recorded, but the production manager monitors stock levels and movements daily.

Accounts payable system

1. Supplier invoices are received in the accounts department via email and printed. The details are entered into the accounts payable system by the accounts payable clerk, who then stamps the invoice as processed. The computer system automatically calculates the payment due date based on the supplier's credit terms that have been entered into the system.
2. As there are only a few suppliers each week, the accounts payable clerk validates the outstanding invoices via a phone call with the production manager. The production manager has an excellent memory for what he has ordered, and the deliveries received.
3. The computer system automatically generates a weekly list of invoices due for payment. The accounts payable clerk flags the invoices for cheques to be processed as direct deposits are not used. The system does allow the user to exclude an invoice from the payment run. The accounts payable ledger and general ledger are automatically updated once the payment runs are complete.
4. The cheques are forwarded to the financial controller for signature. Supporting documentation is only attached to the cheques for non-major suppliers. The financial controller calls the production manager to verify the review process (step 2) has taken place, and other payments are verified to the attached invoice. If the financial controller is not available the accounts payable clerk usually has the cheques signed by the marketing manager. The payables clerk avoids asking the CEO to sign cheques as he asks too many questions. Any supporting documentation to the cheque is signed to avoid duplicate payment.
5. Monthly statements are received from the suppliers. However, the accounts payable clerk does not believe statement reconciliations are necessary.

1. Identifies and explains ten (10) control weaknesses associated with the purchases, accounts payable and payments system outlined above.
2. Identifies and explains the account balance assertions for raw material inventory and accounts payable that are most impacted by control weaknesses.
3. Recommends and justifies a control improvement for each of the weaknesses identified in requirement one.

Sweets R Us Pty Ltd. is a large confectionary company that manufactures a range of standard sweet products and some specialty products for the Australian market. Most of the company’s production is in standard chocolate goods and they offer personalised packaging for promotional or fundraising purposes. They also provide uniquely moulded and decorated chocolate items for special events such as grand finals. You have been allocated the role of assessing the controls in the Purchases, Accounts Payable and Payments system, and have obtained the following details:

Raw material ordering process

1. To maintain and control product quality a limited number of trusted suppliers are used.
2. The production manager oversees raw material inventory. Orders are placed based on current production orders and quantities of raw material currently on hand with next day delivery where possible.
3. No formal purchase order system is used.

Raw material warehousing procedures

1. The warehouse personnel are trusted, long-term employees.
2. One of the warehousing staff ensures that all goods received, primarily raw materials, are in good order and signs the couriers’ delivery dockets in acknowledgment of materials received.
3. Movement of in and out of the warehouse is not recorded, but the production manager monitors stock levels and movements daily.

Note: Finished goods are warehoused in a separate secured area that only the production manager and his assistant have access to.

1. Identifies and explains t (5) control weaknesses associated with the purchases and accounts payable outlined above.
2. Identifies and explains the account balance assertions for raw material inventory and accounts payable that are most impacted by control weaknesses.
3. Recommends and justifies a control improvement for each of the weaknesses identified in requirement one.

ABC company which is based in the US,sells product X and has reported a revenue of $1,925,000 and a gross income ( profit before tax) of $50,000. answer the questions below .

1. what is the cost of the revenue ?

2. what is the gross profit margin?

3. suppose the company is in the 20% tax bracket,what is the net income?

4.what is the net profit margin

5. compare the gross and net profit margins,what do they tell you? a brief answer

6.if the company sells product x for $150 per unit,in which the variable costs per unit is $90,what is the contribution margin and what is the contribution margin ratio?

7. suppose that the fixed costs in producing product x is $720,000, calculate the breakeven point( in dollars and in units)

8.plot a break-even graph highlighting the break-even point,revenue,total costs,overall variable costs and fixed costs?

note : number 1 - 4 have been answered

Using rscript

Let us assume that the credit rating of a company determines yield to maturity (YTM) of the bond. This leaves you now with three different YTM: 2% for AAA, 4% for AA, 8% for others. You want to run the following commends. If the credit rating is AAA, print “YTM of the bond is 2%.” If the credit rating is AA, print “YTM of the bond is 4%.” If the credit rating is neither AAA nor AA, print “YTM of the bond is 8%.” Somebody already wrote the following code for you, and you have to complete the next lines. bond.rating <- "A" a) To run the commends above, use if....else statement. b) To run the commends above, use if....else if statement.

A US airline company will purchase 400,000 gallons of jet fuel after one month and the company wants to

do cross hedging using heating oil futures. The standard deviation of monthly changes in the spot price of

jet fuel is (in cents per gallon) 300; the standard deviation of monthly changes in the futures price for the

heating oil futures contract is (in cents per gallon) 407. The coefficient of correlation between the jet fuel

price changes and the futures price changes is 0.75. Each heating oil futures contract is for delivery of 2,000

gallons of heating oil. The current spot price of jet fuel is $1.55 per gallon and the futures price of heating oil is

$1.97 per gallon. What is the optimal number of contracts with tailing adjustment?