Supply Chain Management

Supplier Positioning

WWA purchases a variety of products and services to manufacture its product. The table below provides insight into these purchases on an annual basis:

Linear Averaging

The supply chain team has identified 4 suppliers in Low Cost Regions and evaluated them on Quality, Price, OTD, and transportation costs. The price evaluation uses an inverted scale, the lower the score the higher the price. Use Excel perform linear averaging and select the best supplier. See for the details of each supplier and their evaluation.

5.) All of the following statements concerning variable life insurance are correct EXCEPT

(a)If the variable universal life policy investment experience is weak, the death benefit amount may be reduced to zero.

(b)Variable life has a fixed premium and fluctuating death benefit and cash values.

(c)Variable life policies must be regulated by the Securities and Exchange Commission (SEC).

(d)The owner of a variable universal life policy has the option to invest in a variety of investments.

7.) All of the following statements concerning disability income insurance are correct EXCEPT:

(a)Premiums for disability income insurance coverage are a function of the insured’s health, gender, age, and the level of income benefits provided by the policy.

(b)To qualify for disability income, one must become disabled while the policy is in force and remain so until the elimination (exclusion) period has ended.

(c)A policy that integrates with Social Security will reduce payable benefits by the amount of Social Security the disabled person is eligible to receive.

(d)The Social Security program requires the disabled person to wait 1 month before receiving benefits.

8.) Which of the following statements concerning the characteristics of disability income insurance is correct?

(a)During the elimination period, disability income benefits are paid.

(b)When disability income benefits are being paid the insured still must continue making the policy premium payments.

(c)The residual benefits clause preserves the purchasing power of the insured’s disability income benefits.

(d)In a cost of living rider, an adjustment is made for each year of benefits paid to the insured and is computed by using the same rate of change as, say, the Consumer Price Index.

9.) Which of the following insurance payment benefits would be reported as income and therefore subject to Federal income tax?

(a)The death benefit paid to the spouse after the death of her husband.

(b)When the insured dies and a MEC pays a death benefit.

(c)Disability benefits paid to a disabled worker if premiums for the policy were paid by the employer.

(d)Disability benefits paid to a disabled worker if premiums for the policy were paid by the employee with after tax dollars.

You are the audit manager at Price & Coopers a medium-sized audit firm undertaking the audit for the
year ended 30 June 2018 of Sera Ve Tech Ltd, an electronic component manufacturer located in
Sydney. During the planning stage of the audit you discovered that one of Sera Ve Tech Ltd’s major
suppliers went bankrupt one month ago, causing major product shortages. To overcome the problem,
James Marshall, the husband of the finance director, Norita James, provided electronic components
to Sera Ve Tech Ltd through his private company. There is no formal agreement in place with James
Marshall, however, the goods are being provided at competitive prices. You are concerned about the
electronic components that James Marshall, company is supplying, because his products are new to
the market and you have heard some of Sera Ve Tech Ltd’s staff complaining that they are of poor
quality.

The board has informed you that although sales have been strong this year, Sera Ve Tech Ltd has
suffered significant cash flow problems because a major debtor, Merrinda Ltd, is experiencing financial
difficulties. As a result, Merrinda Ltd is taking well over 120 days to pay outstanding amounts, despite
Merrinda Ltd’s terms of trade being payment within 30 days. Merrinda Ltd makes up 40 per cent of
Sera Ve Tech Ltd’s sales and the board has been reluctant to take any action that might adversely
affect those sales. As a result, Sera Ve Tech Ltd has had to increase its dependency on its line of credit,
and this has caused it to temporarily breach the debt to equity ratio required in its loan covenant with
Commonwealth Bank Ltd.


Required:

(a) Identify two (2) key account balances at risk of material misstatement.
(b) For each account balance identify the key assertion at risk.
(c) Explain why the account balance and assertion are at risk.

(d) Describe one (1) substantive test of detail that you would undertake for each account to address the assertion and risk identified.

Sami sells banana and groundnuts at Dansoman Polyclinic. In view of an impending hospital infrastructure expansion program, she has obtained permission to sell waakye on the hospital compound. She visited L400 Micocredit for a loan. You gathered the following information in your interaction with her.

• She needs to buy a cooking pot valued at $185.00. She owns a pan used for selling the vaakye with the current value of $ 80.00

• Her locally manufactured coal pot uses LPG gas and can prepare food on a relatively larger-scale, is estimated at $80.00.The LPG cylinder costs $ 70.00.

• She has arranged with the carpenter to prepare a table, a hi$ stool, two long benches and a long table which will enable her customers eat at her joint. The total cost of the furniture is $ 420.00. Her husband has been able to raise $200.00 cash for this purpose. The carpenter has agreed to give her two months to settle her bill.

• Eating plates, spoons and other cooking utensils will cost her $ 350.00. Her savings balance at L400 Finance is $ 250.00. The woman selling these items has agreed on a one-month trade credit. However, she must make an initial payment of $ 100.00 before she will be allowed to take the items.

• She will stock-up the rice and beans for at least a month in order to avoid unplanned price changes. It takes 3 days to finish using a mini bag of rice valued at $ 180.00 and twice that period to fully use up a mini bag of beans valued at $ 250.00. She has negotiated for a month’s trade credit with her supplier.

• She requires about $ 250.00 to finance fish, meat and all the other ingredients for preparing he pepper and stew. She requires about $ 100.00 to provide for any unexpected change in prices of the ingredients.

• She will be able to raise about $ 250.00 from selling the remaining stock of banana and groundnuts

a. Prepare a Statement of Affairs schedule for Sami at the beginning of the business in order to determine the amount of loan she may requires for the business.

G ilbert Moss and Angela Pasaic spent several summers during their college years working at

archaeological sites in the Southwest. While at those digs, they learned how to make ceramic tiles from

local artisans. After college they made use of their college experiences to start a tile manufacturing firm

called Mossaic Tiles, Ltd. They opened their plant in New Mexico, where they would have convenient

access to special clay they intend to use to make a clay derivative for their tiles. Their manufacturing

operation consists of a few relatively simple but precarious steps, including molding the tiles, baking, and

glazing.

Gilbert and Angela plan to produce two basic types of tile for use in home bathrooms, kitchens,

sunrooms, and laundry rooms. The two types of tile are a larger, single- colored tile and a smaller,

patterned tile. In the manufacturing process, the color or pattern is added before a tile is glazed. Either a

single color is sprayed over the top of a baked set of tiles or a stenciled pattern is sprayed on the top of a

baked set of tiles.

The tiles are produced in batches of 100. The first step is to pour the clay derivative into specially

constructed molds. It takes 18 minutes to mold a batch of 100 larger tiles and 15 minutes to prepare a

mold for a batch of 100 smaller tiles. The company has 60 hours available each week for molding. After

the tiles are molded, they are baked in a kiln: 0.27 hour for a batch of 100 larger tiles and 0.58 hour for a

batch of 100 smaller tiles. The company has 105 hours available each week for baking. After baking,

the tiles are either colored or patterned and glazed.

This process takes 0.16 hour for a batch of 100 larger tiles and 0.20 hour for a batch of 100 smaller

tiles. Forty hours are available each week for the glazing process. Each batch of 100large tiles requires

32.8 pounds of the clay derivative to produce, whereas each batch of smaller tiles requires 20 pounds.

The company has 6,000 pounds of the clay derivative available each week.

Mossaic Tiles earns a profit of $190 for each batch of 100 of the larger tiles and $240 for each batch

of 100 smaller patterned tiles. Angela and Gilbert want to know how many batches of each type of tile

to produce each week to maximize profit. In addition, they have some questions about resource usage

they would like answered.

A. Formulate a linear programming model for Mossaic Tiles, Ltd., and determine the mix of tiles it

should manufacture each week.

B. Transform the model into standard form.

C. Solve the linear programming model graphically.

D. Determine the resources left over and not used at the optimal solution point.

E. Determine the sensitivity ranges for the objective function coefficients and constraint quantity values

by using the graphical solution of the model.

F. For artistic reasons, Gilbert and Angela prefer to produce the smaller, patterned tiles. They also

believe that in the long run, the smaller tiles will be a more successful product. What must the profit

be for the smaller tiles in order for the company to produce only the smaller tiles?

G. Solve the linear programming model by using the computer and verify the sensitivity ranges

computed in (E).

H. Mossaic believes it may be able to reduce the time required for molding to 16 minutes for a batch of

larger tiles and 12 minutes for a batch of smaller tiles. How will this affect the solution?

I. The company that provides Mossaic with clay has indicated that it can deliver an additional 100

pounds each week. Should Mossaic agree to this offer?

J. Mossaic is considering adding capacity to one of its kilns to provide 20 additional glazing hours per

week, at a cost of $90,000. Should it make the investment?

K. The kiln for glazing had to be shut down for 3 hours, reducing the available kiln hours from 40 to 37.

What effect will this have on the solution?

Suppose Rina is an avid reader and buys only mystery novels. Rina deposits $4,000 in a bank account that pays an annual nominal interest rate of 15%. Assume this interest rate is fixed—that is, it won't change over time. At the time of her deposit, a mystery novel is priced at $20.00.

Initially, the purchasing power of Rina's $4,000 deposit is.......... mystery novels. ???????

For each of the annual inflation rates given in the following table, first determine the new price of a mystery novel, assuming it rises at the rate of inflation. Then enter the corresponding purchasing power of Rina's deposit after one year in the first row of the table for each inflation rate. Finally, enter the value for the real interest rate at each of the given inflation rates.

Hint: Round your answers in the first row down to the nearest mystery novel. For example, if you find that the deposit will cover 20.7 mystery novels, you would round the purchasing power down to 20 mystery novels under the assumption that Rina will not buy seven-tenths of a mystery novel.

When the rate of inflation is equal to the interest rate on Rina's deposit, the purchasing power of her deposit ............... over the course of the year.??????

RS p.1.c. manufactures domestic food mixers. It is investigating whether or not to accept a three-year contract to make a new model for sale through a supermarket chain. The contract uses skilled labour which cannot be increased above that currently available and RS p.1.c. will receive a fixed price of £42 per mixer for all the mixers it can produce in the three-year period. The following estimates have been made:

Capital investment £50000 payable now, with nil scrap value.

Additional overhead £25000 per annum.

Materials £30 per mixer Labour £6 per hour.

The factory manager knows from experience of similar machines that there will be a learning effect for labour. He estimates that this will take the form:

y = ax^-0.3

where y = average labour hours per unit

a = labour hours for first unit

x = cumulative production

He estimates that the first mixer will take 10 hours to produce and that the fixed amount of labour available will enable 5000 mixers to be produced in the first year. Apart from the capital investment, all cash flows can be assumed to arise at year ends. The company has a cost of capital of 15%.

Conduct a sensitivity analysis to support the decision-making process.

16.

a. Keenan Industries has a bond outstanding with an 8.25% coupon, payable semiannually, and a $1,000 par value. The bond's dollar price is $1,066.00 and the bond is callable at 104. The bond's yield to call is 7.41 percent. When can the bond be called (round to the nearest whole year)?

b. You turn 35 today, and you plan to save $2,000 each month for retirement, with the first deposit made at the end of this month. You plan to retire 30 years from today, when you turn 65, but you're not sure how long you can expect to live after retirement, so you want the payments to go on forever. Under these assumptions, how much can you spend each month after you retire? Your first withdrawal will be made at the end of the first month of retirement.

c. You agree to make 36 deposits of $750 at the end of each month into a bank account. At the end of the 36th month, you will have $30,000 in your account. If the bank compounds interest monthly, what nominal annual interest rate will you be earning?

You will invest in a mutual fund that's expected to provide a return of 4.5% per year, compounded monthly throughout your life.

Production Budget

Flashkick Company Manufactures and sells soccer balls for teams of children in elementary and high school. Flashkick's best selling lines are the practice ball line (durable soccer balls for training and practice) and the match ball line (high-performance soccer balls used in games). In the first four months of next year, Flashkick expects to sell the following:

___________Practice Balls_______________________Match Balls

_________Units_________selling price________units________selling price

January ___50,000_________$8.75__________7000___________$16.00

February___58000_________$8.75__________8000___________$16.00

March _____70000_________$8.75_________12000___________$16.00

April______100000_________$8.75_________18000___________$16.00

Flashkick requires ending inventory of product to equal 20 percent of the next month's unit sales. Beginning inventory in January was 3,300 practice soccer balls and 400 match soccer balls.

Required

Construct a production budget for each of the two product lines for Flashkick Company for the first three months of the coming year.

Production budget for practice balls

Flashkick Company

Production Budget - Practice balls

For the first quarter of next year

_________________January______________February__________________March

unit sales____________?__________________?_______________________?

desired ending inventory__?_______________?________________________?

total needed__________?_________________?________________________?

Less: Beginning inventory____?____________?________________________?

unit produced______________?___________?_________________________?

Production budget for match balls:

Flashkick Company

Production Budget - Match Balls

_______________January___________February_______________March

unit sales________?__________________?_____________________?

desired ending inventory___?___________?_____________________?

Total needed_____?__________________?_____________________?

Less: Beginninng inventory____?________?_____________________?

Units produced________?_____________?______________________?

Lahser Corp. produces component parts for durable medical equipment manufacturers. The controller is building a master budget for the first quarter of the upcoming calendar year. Selected information from the accounting records is presented next:

a. Accounts Receivable as of January 1 are $59,200. Selling price per unit is projected to remain stable at $11 per unit throughout the budget period. Sales for the first six months of the upcoming year are budgeted to be as follows:

b. Sales are 20% cash and 80% credit. All credit sales are collected in the month following the sale.

c. Lahser Corp. has a policy that states that each month’s ending inventory of finished goods should be 10% of the following month’s sales (in units).

d. Three pounds of direct material is needed per unit at $2.30 per pound. Ending inventory of direct materials should be 20% of next month’s production needs.

e. Monthly manufacturing overhead costs are $5,650 for factory rent, $2,900 for other fixed manufacturing costs, and $1.10 per unit produced for variable manufacturing overhead. All costs are paid in the month in which they are incurred.

4. What is the budgeted direct materials cost for the first quarter? (1 point)