i. if the typical market basket of goods and services cost $400 in 1995, and the price index (base year 1992 )for 1995 is 120, then if this same typical bundle cost $420 in 1996, the price index in 1996 would be:

a.120

b.between 120 and 125

c.125

d.above 125

ii.supposez the non-institutionalized population over age 15 is 20 million, 10 million of whome are female, the labour force is 16 million, 6 million of whome are female, and the number of people employed is 15 million, 5.5 million of whome are female. the female participation rate is:

a. 10/20

b. 6/16

c. 5.5/15

d. 6/10

iii.consider an economy in which the current level of income is $700b, the multiplier is 3, the marginal tax rate is 20%, and the current budget deficit is $20b. suppose the government increases the spending to increase GDP to $715b, the budget dificit becomes:

a. less than or equal to $20b

b. more than $20b but not more than $23b

c. more than $23b but not more than $26b

d. more than $26b

Is the increased price and/or complexity of healthcare due to technological innovation worth the cost & increased performance?

1. a) DERIVE THE "COST OF EQUITY" USING THE GORDON DIVIDEND MODEL FOR THE STOCK PRICE OF    £386, GROWTH IN DIVIDEND OF 3%, AND DIVIDEND OF £36.

THEN INDICATE WHETHER IS RETURN ON EQUITY IS A GOOD RETURN RELATIVE TO CURRENT YEAR 2012 RETURNS ON EQUITY WHICH HAVE BEEN RUNNING FROM 4 % TO 7 % FOR THRIVING MANUFACTURING CONGLOMERATES AND EVEN HIGHER FOR SOME VENTURE CAPITAL AND PRIVATE EQUITY FIRMS UPWARD TO OVER 10 %.

b) IS THE DISCOUNTING OF INVESTMENT VENTURE CASH FLOWS DEEPER WITH THE RATE YOU HAVE DERIVED, OR LESS THAN

LOVE Enterprise is a seller of cupcakes. The variable cost is RM4 per unit and the fixed cost is RM800 for a month. A cupcake is sold at RM12.

Required:

(a) Briefly explain the importance of cost-volume-profit analysis for a business. (7    marks)

(b) Calculate the contribution margin for a unit of cupcake. (3    marks)

(c) Determine the number of cupcakes need to be sold to achieve break-even point. (3    marks)

(d) Determine the number of cupcakes that need to be sold to achieve the target profit of RM2,000 for a month. (3    marks)

(e) Determine the number of cupcakes that need to be sold to achieve break-even point, if the selling price is reduced by RM1. (3    marks)

(f) Determine the number of cupcakes that need to be sold to achieve break-even point, if the fixed cost increases by RM200. Assume the selling price is at RM12 and variable cost is at RM4 per cupcake. (3    marks)

(g) Determine the number of cupcakes that need to be sold to achieve break-even point, if the variable cost decreases by RM1. Assume the selling price is at RM12 and fixed cost is at RM800.

A machine with an original cost of $120,000 and no salvage value had an estimated useful life of 6 years, but after 2 complete years, management decided that the orignal estimate of useful life should have been 8 years.

Using a T-Chart template, prepare the following entries:

A. Depreciation for Year 1

B. Depreciation for Year 2

C. Depreciation for Year 3

When activity based costing is implemented, the initial outcome is normally that:

A. The cost of all products will be higher.

B. The cost of all products will be lower

C. The cost of low volume products will be higher and the cost of high volume products will be lower

D. The cost of low volume products will be lower and the cost of high volume products will be higher.

Question 1

"A manufacturing company is considering a new investment in a machine that will cost $142,000 and has a maintenance cost of $6,600 that occurs every 2 years starting at the end of year 2. Assuming that this equipment will last infinitely under these conditions, what is the capitalized equivalent cost of this investment at the rate of 13.3%?

The Earland Corporation purchased equipment at the beginning of 20x7 and capitalized a cost of $2,000,000. This cost included the following expenditures:

Purchase price $1,850,000

Freight charges 30,000

Installation charges 20,000

Annual maintenance charge 100,000

Total=$2,000,000

The company equipment is being depreciated at a diminishing balance rate of 15% with no residual value. In 20x9, after the 20x8 financial statements were issued, the company decided to switch to the straight-line method of depreciation to reflect a change in the expected use of the equipment. At the time, the company’s controller also noticed the error made in 20x7. The company estimates that the total useful life of the equipment is 10 years with no residual value. The company’s tax rate is 35% and the equipment belongs to a UCC class having a 30% CCA rate.

Required –

(a) Prepare the journal entry at the beginning of 20x9 to adjust for the error.

(b) What is the 20x9 depreciation expense?