Green Thumb Gardening is a small gardening service that uses activity-based costing to estimate costs for pricing and other purposes. The proprietor of the company believes that costs are driven primarily by the size of customer lawns, the size of customer garden beds, the distance to travel to customers, and the number of customers. In addition, the costs of maintaining garden beds depends on whether the beds are low maintenance beds (mainly ordinary trees and shrubs) or high maintenance beds (mainly flowers and exotic plants). Accordingly, the company uses the five activity cost pools listed below:

The company already has completed its first stage allocations of costs and has summarized its annual costs and activity as follows:

Required:

Compute the activity rate for each of the activity cost pools. (Round your answers to 2 decimal places.)

Caring for lawn (per sq ft of laawn)

Caring for garden bed-low maintenance (per sq ft of low maintenance bed)

Caring for garden bed-high maintenance (per sq ft of high maintenance bed)

Travel to jobs (per mile)

Customer billing service (per customer)

Xania Inc. uses a normal job-order costing system. Currently, a plantwide overhead rate based on machine hours is used. Xania's plant manager has heard that departmental overhead rates can offer significantly better cost assignments than a plantwide rate can offer. Xania has the following data for its two departments for the coming year:

Required:

1. Compute a predetermined overhead rate for the plant as a whole based on machine hours.

2. Compute predetermined overhead rates for each department using machine hours for Department A and direct labor hours for Department B. (Note: Carry your calculations out to the nearest dollar.)

3. Job 73 used 25 machine hours from Department A and 50 machine hours from Department B; it used 30 direct labor hours from Department A and 20 direct labor hours from Department B. Job 74 used 40 machine hours from Department A and 15 machine hours from Department B; it used 20 direct labor hours from Department A and 50 direct labor hours from Department B. Compute the overhead cost assigned to each job using the plantwide rate computed in Requirement 1. Repeat the computation using the departmental rates found in

Requirement 2.

4. Using a Plantwide, if actual machine hours for the year were 17,000 hours and actual overhead costs were $1,100,000, how much was overhead under- or over-applied for the year and how would that affect Cost of Goods Sold when it is closed to that account. $$_________________________ over-applied/under-applied (circle one) $$_________________________ Cost of Goods Sold increased/decreased (circle one)

2. Download the BodyTemp.MTW file from Canvas. We will be comparing the body temperatures of men and women.  [30 points]

A.Make a graph to compare the distributions of men and women’s body temperatures.

B. Use Minitab Express to determine if there is evidence that the mean body temperatures of men and women are different.  The coding of gender is 0=man and 1=woman. Assume that the distribution of the body temperature data is normal. Use the five-step hypothesis testing procedure and remember to include all relevant Minitab Express output. You should not need to do any hand calculations.

Step 1:Check assumptions and write hypotheses

Step 2: Calculate the test statistic

Step 3:Identify the pvalue

Step 4:Make a decision

Step 5:State a “real world” conclusion

Required:

1. Journalize the April transactions for Bird Company (the buyer). If an amount box does not require an entry, leave it blank.

2. Journalize the April transactions for Swan Company (the seller). If an amount box does not require an entry, leave it blank.

Let x represent the dollar amount spent on supermarket impulse buying in a 10-minute (unplanned) shopping interval. Based on a certain article, the mean of the x distribution is about $25 and the estimated standard deviation is about $8.

(a) Consider a random sample of n = 100 customers, each of whom has 10 minutes of unplanned shopping time in a supermarket. From the central limit theorem, what can you say about the probability distribution of x, the average amount spent by these customers due to impulse buying? What are the mean and standard deviation of the x distribution?

The sampling distribution of x is approximately normal with mean μ_x = 25 and standard error σ_x = $8. The sampling distribution of x is approximately normal with mean μ_x = 25 and standard error σ_x = $0.08.     The sampling distribution of x is not normal. The sampling distribution of x is approximately normal with mean μ_x = 25 and standard error σ_x = $0.80.

Is it necessary to make any assumption about the x distribution? Explain your answer.

It is necessary to assume that x has a large distribution. It is not necessary to make any assumption about the x distribution because μ is large.     It is necessary to assume that x has an approximately normal distribution. It is not necessary to make any assumption about the x distribution because n is large.

(b) What is the probability that x is between $23 and $27? (Round your answer to four decimal places.)


(c) Let us assume that x has a distribution that is approximately normal. What is the probability that x is between $23 and $27? (Round your answer to four decimal places.)


(d) In part (b), we used x, the average amount spent, computed for 100 customers. In part (c), we used x, the amount spent by only one customer. The answers to parts (b) and (c) are very different. Why would this happen?

The standard deviation is larger for the x distribution than it is for the x distribution. The sample size is smaller for the x distribution than it is for the x distribution.     The standard deviation is smaller for the x distribution than it is for the x distribution. The x distribution is approximately normal while the x distribution is not normal. The mean is larger for the x distribution than it is for the x distribution.

In this example, x is a much more predictable or reliable statistic than x. Consider that almost all marketing strategies and sales pitches are designed for the average customer and not the individual customer. How does the central limit theorem tell us that the average customer is much more predictable than the individual customer?

The central limit theorem tells us that small sample sizes have small standard deviations on average. Thus, the average customer is more predictable than the individual customer. The central limit theorem tells us that the standard deviation of the sample mean is much smaller than the population standard deviation. Thus, the average customer is more predictable than the individual customer.

Assume that you recently graduated from ADU’s MHA program and landed a job as an assistant financial officer with the Cleveland Clinic. The clinic has $100,000 sitting in a checking account. The funds were designated by the board for the construction of a proton therapy facility. Construction of the facility will start one year from now. Your first assignment is to invest the $100,000 with the understanding that you need to plan for a one-year holding period because the funds must be available when construction begins in one year. Further, your boss has restricted you to the following investment alternatives, shown with their probabilities and associated outcomes.                 

Barney Smith Investment Advisors recently issued estimates for the state of the economy and the rate of return on each state of the economy. Alta Industries, Inc. is an electronics firm; Repo Men Inc. collects past due debts; and American Foam manufactures mattresses and various other foam products. Barney Smith also maintains an "index fund" which owns a market-weighted fraction of all publicly traded stocks; you can invest in that fund and thus obtain average stock market results. Given the situation as described, answer the following questions.                  

a. Calculate the expected rate of return on each alternative.

b. Calculate the standard deviation of returns on each alternative.

c. Calculate the coefficient of variation on each alternative.

d. Calculate the beta on each alternative.

g. Suppose you create a two-stock portfolio by investing $50,000 in Alta Industries and $50,000 in Repo    Men. Calculate the expected return, standard deviation, coefficient of variation, and beta for this    portfolio. How does the risk of this two-stock portfolio compare with the risk of the individual stocks if they were held in isolation?

Assume that you recently graduated and you just landed a job as a financial planner with the Cleveland Clinic. Your first assignment is to invest $100,000. Because the funds are to be invested at the end of one year, you have been instructed to plan for a one-year holding period. Further, your boss has restricted you to the following investment alternatives, shown with their probabilities and associated outcomes. State of Economy Probability T-Bills Alta Inds. Repo Men American Foam Market Port. Recession 0.1 8.00% -22.0% 28.0% 10.0% -13.0% Below Average 0.2 8.00% -2.0% 14.7% -10.0% 1.0% Average 0.4 8.00% 20.0% 0.0% 7.0% 15.0% Above Average 0.2 8.00% 35.0% -10.0% 45.0% 29.0% Boom 0.1 8.00% 50.0% -20.0% 30.0% 43.0% Barney Smith Investment Advisors recently issued estimates for the state of the economy and the rate of return on each state of the economy. Alta Industries, Inc. is an electronics firm; Repo Men Inc. collects past due debts; and American Foam manufactures mattresses and various other foam products. Barney Smith also maintains an "index fund" which owns a market-weighted fraction of all publicly traded stocks; you can invest in that fund and thus obtain average stock market results. Given the situation as described, answer the following questions. a. Calculate the expected rate of return on each alternative. b. Calculate the standard deviation of returns on each alternative. c. Calculate the coefficient of variation on each alternative. d. Calculate the beta on each alternative. e. Do the SD, CV, and beta produce the same risk ranking? Why or why not? f. Suppose you create a two-stock portfolio by investing $50,000 in Alta Industries and $50,000 in Repo Men. Calculate the expected return, standard deviation, coefficient of variation, and beta for this portfolio. How does the risk of this two-stock portfolio compare with the risk of the individual stocks if they were held in isolation? Please show all calculations and formulas used to derive the answers.

In what follows use any of the following tests/procedures: Regression, multiple regression, confidence intervals, one sided T-test or two sided T-test. All the procedures should be done with 5% P-value or 95% confidence interval.Some answers are approximated, choose the most appropriate answer. Open Cars04 data. SETUP: Is it reasonable to claim that cars with higher city MPG have also higher Highway MPG? Given the data your job is to help answer this question.

I. What test/procedure did you perform? (6.66 points)

a. One sided T-test

b. Two sided T-test

c. Regression

d. Confidence interval

II. Statistical interpretation? (6.66 points)

a. Since P-value is small we are confident that the slope is not zero.

b. Since P-value is small we are confident that the averages are different.

c. Since P-value is too large the test is inconclusive.

d. None of these.

III. Conclusion? (6.66 points)

a. Yes, we confirm that this was a reasonable claim.

b. No, we cannot confirm that this was a reasonable claim.

Fresh Ltd. (Fresh) manufactures organic fruit drinks and its year end is December 31, 2020. You are an audit manager of Lea & Bettiol CPAs and are currently planning the audit of Fresh. You attended the planning meeting with the audit engagement partner and CFO last week and made the following notes:

Notes of planning meeting for Fresh

Fresh’s sales have been strong and the company is forecasting revenue of $40 million this year, which is a 25% increase over the prior year. During the year, the company invested significantly in its beverage production process at its factory to ensure it can keep up with the product demand. It also spent $4 million updating, repairing and replacing most of the machinery used in its production process. Because of the significant demand, the company also expanded the number of warehouses it uses to store inventory. It now utilises 15 warehouses; some are owned by Fresh and some are rented from third parties. There will be inventory counts taking place at all 15 of these sites at the year end.

A new accounting general ledger was introduced at the beginning of the year, with the old and new systems being run in parallel for a period of two months. In addition, Fresh spent $1.3 million on developing a new brand of protein drinks. The company started this process in July 2020 and is close to launching their new product into the market.

As a result of the increase in revenue, Fresh recently recruited a new credit manager to collect outstanding receivables. The CFO is sure the new manager will be successful and so he does not think Fresh needs to continue to maintain a general allowance for doubtful accounts and so he has not booked one for 2020.

The CFO stated that there was a problem in the mixing of raw materials within the production process which resulted in a large batch of drinks tasting different. A number of these products were sold; but due to complaints by customers, no further sales of these beverages have been made. No adjustment has been made to the valuation of the damaged inventory, which will still be held at a cost of $1 million at the year end.

As in previous years, the management of Fresh is due to be paid a significant annual bonus based on the value of year-end total assets.

Required:

(a) Using the notes provided, identify and explain SEVEN audit risks

(b) If the auditor determines the engagement is high risk- what does this mean for detection risk and materiality?

(b) Assuming the auditor determines the inventory is overvalued, what would be the impact, if any, on the audit report?

(c) What type of audit procedure would provide the auditor the best evidence for the existence of the inventory? (1 Mark)

Golden Enterprises started the year with the following: Assets $104,000; Liabilities $34,000; Common Stock $64,000. During the year, the company earned revenue of $5,400 and incurred expenses of $3,200. In addition, the company paid dividends of $1,400 to owners. Assume no other activities occurred during the year. The amount of Golden's retained earnings at the end of the year is: $8,200. $1,400. $11,400. $6,800.