Phase One: Alarm Reaction (reactions/results occur within
minutes and hours--people can die within this stage if the stressor
is extreme)
Phase Two: Stage of Resistance (when you still feel the
physiological response in your body over a period of days, weeks
and months, even years if you keep reliving the event)
Phase Three: Stage of Exhaustion (death occurs after long-time
exposure to the stress... often times you don't even feel
physiological signs anymore because your body is used to it)
1. Several months ago you witnessed a person falling from a building and still can’t sleep at night. You grind your teeth during the day. You can still feel your heart racing.
2.You suffer a stroke a year after retiring from your 30 year stressful job as an air traffic controller.
3. A deer runs in front of your car and you stop in the nick of time.
4. A child is burned over half of his body and although doctors try valiantly to save him, he dies five hours after his arrival to the hospital.
5. You have been in drama club for two years. Each time you think about going on stage, you get all sorts of physiological reactions as your stomach churns, your muscles get tight and you get headaches.
6. After caring for his ailing wife for over eight years, a man dies of a heart attack a month after his wife’s passing.
7. A man dies in his yard of heat stroke after shoveling a trench in 90 degree heat.
8. Your current college load of biology, history and English 101 are taking its toll on you. You have difficulty falling asleep and you get frequent headaches. You can't seem to shake this darn cold that you caught.
In: Psychology
You are the president of Campus Sweaters, Inc. Campus Sweaters manufacturers wool pullover v-neck sweaters of various sizes and colors. You are preparing the budgets for the first quarter of 2016 (January, February, and March). You have the following historical and projected sales in units:
|
Actual or Projected |
Month |
Units |
|
Actual |
November |
9,000 |
|
Actual |
December |
8,000 |
|
Projected |
January |
11,000 |
|
Projected |
February |
10,000 |
|
Projected |
March |
6,000 |
|
Projected |
April |
7,000 |
|
Projected |
May |
7,000 |
|
Projected |
June |
7,000 |
It takes ten skeins of yarn to make one sweater. Each skein costs $1.30. Past experience shows you need to have enough sweaters on-hand to fill the next month and one-half of sales (approximately forty-five days). Also, you need enough yarn to manufacture the next month’s production.
You will have 12,000 sweaters in finished inventory and 80,000 skeins of yarn in raw materials inventory as of December 31, 2015. You purchased $90,000 of yarn in December that must be paid for in January. The Company incurred $7,500 of overhead cost during December 2015, and $13,500 of selling expenses in the last half of December. These also must be paid in January. The company policy is to pay prior month's charges on account on the tenth day of the following month unless otherwise designated.
Income Statements
|
Actual or Projected Sales |
Actual |
Actual |
Projected |
Projected |
Projected |
|
Month |
November |
December |
January |
February |
March |
|
Sales |
$240,000 |
$270,000 |
$300,000 |
$270,000 |
$210,000 |
|
Cost of sales |
144,000 |
162,000 |
180,000 |
162,000 |
126,000 |
|
Gross margin |
96,000 |
108,000 |
120,000 |
108,000 |
84,000 |
|
Operating Expenses: |
|||||
|
Selling |
24,000 |
27,000 |
30,000 |
27,000 |
21,000 |
|
Administration |
35,000 |
45,000 |
50,000 |
45,000 |
30,000 |
|
Rent |
10,000 |
10,000 |
10,000 |
10,000 |
10,000 |
|
Sales salaries |
20,000 |
20,000 |
20,000 |
20,000 |
20,000 |
|
Totals |
89,000 |
102,000 |
110,000 |
102,000 |
81,000 |
|
Operating Income |
7,000 |
6,000 |
10,000 |
6,000 |
3,000 |
|
Interest Expense |
0 |
0 |
? |
? |
? |
|
Net Income |
$7,000 |
$6,000 |
A worker, using a knitting machine, can make five sweaters in an hour. The cost of direct labor per hour, including fringe, is $20.00. You incurred $13,000 of direct labor cost between December 16 and December 31, 2015 which will be paid on January 7, 2016. The manufacturing overhead rate is $5.00 per direct labor hour. All sweaters are sold wholesale to retail outlets at $30.00 each.
Salaries and wages are paid as follows: The pay period from the first to the fifteenth of the month is paid on the twenty-second day of each month; the pay period from the sixteenth to the thirty-first is paid on the seventh day of the following month.
Rent is paid in advance on the first day of each month. Fifty percent of the selling expenses are paid in the month incurred, and fifty percent in the following month. All manufacturing overhead and administrative costs are paid on the tenth day of the following month.
The cash in the bank on December 31, 2015 was forecast at $30,000. There were no outstanding borrowings. The company has a $500,000 line of credit at 12% per annum at the Old Rusty Bucket State Bank of Oreana. All borrowings, and any subsequent repayments must be made on the fifteenth day of the month. All loan takedowns must be repaid by December 31, 2016. Repayments can be made when extra cash is available, but are due on the fifteenth day of any month. The company has the policy to have at least $25,000 in the bank account at the end of each month even if they have to borrow it. However, more may be required depending on cash needs during the first week of the following month.
20% of the sales are collected in the month of sale. Seventy percent are collected in the next month, and five percent are collected in the third month.
>Use the information above to complete the following activities:
Step 01: Prepare a production budget for Campus Sweaters, Inc. for each of the following months: January, February, March 2016.
Step 02: Prepare a raw materials budget for each month.
Step 03: Prepare a raw materials budget in dollars for each month.
Step 04: Prepare a cost of goods manufactured schedule for each month.
Step 05: Prepare a cash budget for each month.
Partial answers provided:
The following relates to the month of January
Required production in units: 12,000
Required purchases of raw material in units 105,000
Required purchases of raw material in dollars: $136,500
Total Cost of Goods Manufactured: $216,000
Cash inflows $261,000
Cash outflows $238,000
In: Accounting
Love Your Pet, Inc. (LPI) is a pet food company located in rural Quebec. LPI has been operating for years as a distributor of pet food but in the last year has begun to manufacture raw dog food. In the current year, LPI has been certified by the Canadian Association of Raw Pet Food Manufacturers, (CARPFM). This organization believes that companion animals benefit greatly from a diet more closely related to their hereditary and biological makeup. Certification was completed in the third quarter. Sales of raw dog food literally doubled in the fourth quarter.
Prices have been on the rise for raw meat used in production. Dog food is primarily made from the organs of cattle, lamb, duck, or, in some cases, bison. LPI purchases its raw materials only from other companies that have received CARPFM certification. Accordingly, there are a limited number of suppliers that can provide raw materials as needed. Raw materials for manufacturing either raw dog food or dry dog food are turned over quickly to reduce spoilage. Raw foods are freeze dried immediately once produced. Dry dog food is immediately packaged. Both freeze dried and packaged raw food has a shelf life of one year if the product is unopened.
To meet CARPFM standards, LPI has made a significant investment in equipment, financed in part through an increased term loan plus a line of credit from its bank. The bank has tied the maximum line of credit amounts to 50% of inventory and 70% of accounts receivable.
You have been hired as the new controller for LPI. Your boss, Stuart Mack, needs guidance on proper treatment of several accounting issues, since the new arrangements with the bank will now necessitate an audit. LPI has not needed assurance on its financial statements in the past, and simply had a Notice to Reader prepared to assist with tax return preparation. LPI will be preparing its statements in accordance with IFRS.
Facts to note:
• Under specific identification, periodic and perpetual always give the same result because the cost of each specific item sold is identified. Therefore, the same inventory amount is shown for both.
• Average cost yields different results under the periodic and perpetual methods because the numbers of items and their costs are averaged together differently under a moving average (perpetual) than under a historical tabulation of purchases (periodic).
• FIFO always yields the same result under both periodic and perpetual methods.
1. LPI sells bags of dry dog and cat food in its retail stores throughout Canada. Customers can collect stamps on an LPI frequent buyer card, and for every 10 similar bags purchased, LPI will provide an 11th bag for free. The price of a bag of dog food ranges between $15.00 and $70.00, depending on the size of the bag. This program has been in operation for the past two years. LPI has been tracking the extent of redemptions, and to date the program has attracted roughly 60% of customers who buy packaged dry food. This program is ignored in the accounting system the product “given out for free” is simply expensed in the period it is distributed as part of cost of goods sold.
2. LPI has an agreement with a large farm in Quebec that gives LPI a rebate of 10% on purchases of raw meat as long as volume reaches a certain level. Volumes have been met, and in fact are increasing in every quarter since the agreement was signed. This rebate is paid to LPI in the quarter following purchases. LPI has always recorded this discount as a credit to cost of goods sold in the quarter received.
3. With the exception of direct materials and direct labour, all costs of operating the manufacturing operation are expensed in the period incurred.
4. LPI is a distributor of dry food for other suppliers. Recently, a manufacturer in the United States began a recall of several significant batches of its dry pet food products due to possible contamination with salmonella. There have been U.S. reports of some older small breed dogs dying after allegedly consuming this brand of dog food. The manufacturer has since gone out of business. Unfortunately, this product line had previously made up 20% of LPI’s dry dog food sales. LPI had four months of inventory on hand, only some of which were from the recalled batches. However, all products from this supplier have been removed from the shelves and are essentially unsaleable because of concerns over pet health.
5. LPI has always used FIFO for all types of inventory, but Stuart is wondering if LPI should switch to the average cost method. A number of competitors use this method and he has asked you what the impact might be on gross margin and the current ratio as a result of the switch.
6. One of Stuart’s friends, Carly Jetson, the owner of a local boutique holistic health store, has started a holistic line of rabbit food. LPI does not currently manufacture or sell rabbit food so Stuart has allowed Carly to have free shelf space for her product. Stuart pays Carly 80% of the retail price when the food sells.
Required:
Prepare a memo to Stuart in which you identify and analyze the accounting implications of each of these issues. Include a clear conclusion for the accounting treatment that should be adopted.
In: Accounting
Please provide specific Excel functions =NPV(…), =IRR(…), =AVERAGE(…), =YIELD(…) whenever applicable.
Given the following information for Bajor Co.:
Debt: Bajor’s long-term debt capital consists of bonds with 6.250 percent coupon rate (semiannual coupon payments), 9 years time-to-maturity, and current price of 106.61 percent of its par value (i.e., price = 106.61 relative to full amount redemption par of 100).
Preferred stock: Bajor has not issued any preferred stocks.
Common stock (equity):
Taxes: The applicable federal-plus-state corporate tax rate for Bajor is 25.7 percent.
Capital weight: Bajor’s “Market Cap” amounts to $18.23 billion, and “Total Debt” amounts to $14.44 billion. You can use such data to estimate the capital weights for equity and debt, respectively (We and Wd).
Time constraint: For any investment projects, Bajor are required by her investors to recover its initial cost within no more than 6 years.
Q1: What is Bajor’s pretax cost of debt Rd, cost of equity Re, and WACC, respectively? (Hint: For the best estimate of cost of equity Re, you must apply both CAPM and Dividend Growth Model and then average the two estimates.)
In: Finance
Please provide specific Excel functions =NPV(…), =IRR(…), =AVERAGE(…), =YIELD(…) etc......
Given the following information for Bajor Co.:
Debt: Bajor’s long-term debt capital consists of bonds with 6.250 percent coupon rate (semiannual coupon payments), 9 years time-to-maturity, and current price of 106.61 percent of its par value (i.e., price = 106.61 relative to full amount redemption par of 100).
Preferred stock: Bajor has not issued any preferred stocks.
Common stock (equity):
Taxes: The applicable federal-plus-state corporate tax rate for Bajor is 25.7 percent.
Capital weight: Bajor’s “Market Cap” amounts to $18.23 billion, and “Total Debt” amounts to $14.44 billion. You can use such data to estimate the capital weights for equity and debt, respectively (We and Wd).
Time constraint: For any investment projects, Bajor are required by her investors to recover its initial cost within no more than 6 years.
Q1: What is Bajor’s pretax cost of debt Rd, cost of equity Re, and WACC, respectively? (Hint: For the best estimate of cost of equity Re, you must apply both CAPM and Dividend Growth Model and then average the two estimates.)
In: Finance
Gap Inc.'s Sales, Cost of Goods Sold, and Gross Profit
The consolidated balance sheets of Gap Inc. included merchandise inventory in the amount of $1,619 as of January 30, 2016 (the end of fiscal year 2015) and $1,637 as of January 31, 2015 (the end of fiscal year 2014). Net sales were $14,531 and $14,658 at the end of fiscal years 2015 and 2014, respectively. Cost of goods sold and occupancy expenses were $9,271 and $8,799 at the end of fiscal years 2015 and 2014, respectively. All amounts are from Gap Inc.’s 2015 Form 10-K.
Required:
1. Gap Inc. does not include accounts
receivable on its balance sheet, most likely due to
2. Identify and analyze the transaction to record sales during the year ended January 30, 2016.
| Activity | |
| Accounts | |
| Statement(s) |
How does this entry affect the accounting equation?
If a financial statement item is not affected, select "No Entry"
and leave the amount box blank or enter "0". If the effect is
negative, use the minus sign.
Enter amounts in millions of dollars. For example, 12,400,000,000
would be entered as 12,400.
| Balance Sheet | Income Statement | |||||||||||||
| Stockholders' | Net | |||||||||||||
| Assets | = | Liabilities | + | Equity | Revenues | – | Expenses | = | Income | |||||
3. Gap Inc. sets forth net sales but not gross
sales on its income statement. What type(s) of deduction(s) would
be made from gross sales to arrive at the amount of net sales
reported?
4. Reconstruct the Cost of Goods Sold section of Gap Inc.'s 2015 income statement. Enter amounts in millions of dollars. For example, 12,400,000,000 would be entered as 12,400.
| Gap Inc. | |
| Cost of Goods Sold | |
| For the Year 2015 | |
| $ | |
| $ | |
| $ | |
5. Calculate the gross profit ratios for Gap Inc. for 2015 and 2014. If required, round the percentage to one decimal place.
| Gap's 2015 gross profit ratio: | % |
| Gap's 2014 gross profit ratio: | % |
Is the company's performance improving?
In: Accounting
21. Oil shocks, the shift from manufacturing to service jobs, and the use of new technologies are reasons for ___ unemployment.
A permanent B structural C cyclical D frictional
22. In a country where both the labor force participation rate and the unemployment rate are very low, which of the following answers explains why this may be the case?
A a large percentage of the population is employed B a large percentage of the population consist of children
C a large percentage of the population is unemployed D a large percentage of the population is aging and thus has retired
23. A real price is:
A an increase in the average level of the price of a good B the average number of times a dollar is spent on final goods and services in a year
C a price that has been corrected for inflation D a decrease in the average level of the price of a good
24. When the U.S government borrows, it sells:
A treasury bonds B federal paper C federal paper, treasury bonds, and government stocks D government stocks
25. The most basic U.S. employment law stipulates that an employee may quit and employer may fire at any time and for any reason is called:
A the Equal Employment Opportunity Act B the employee privacy law C affirmative action D the employment at will doctrine
26. Which of the following can drive long run economic growth in the Solow model?
A human capital B real capital C technological knowledge D physical capital
27. The consumer price index measures the:
A average price of a basket of goods and services bought by all families in the country B average price of a basket of goods and services bought by a typical consumer
C total price of a basket of goods and services bought by all families in the country D total price of a basket of goods and services bought by a typical consumer
28. The social benefits of research and development are equal to the private benefits.
True or False
29. The quantity theory of money predicts that if the money supply doubles, the price level will also double.
True or False
30. When it occurs at the industry level, Joseph Schumpeter's "creative destruction" results in:
A cyclical unemployment B Structural unemployment C frictional unemployment D underemployment
In: Economics
ADHD? OR JUST YOUNGEST IN THE CLASS?
A study1 indicates that the youngest children in a
school grade are more likely to be diagnosed with
attention-deficit/hyperactivity disorder (ADHD) than their older
peers in the same grade. The study involved 937,943children between
6 and 12 years old in British Columbia, Canada. The cutoff date for
entering school in any year in British Columbia is December
31st, so in any given class, those born late in the year
are almost a year younger than those born early in the year. Is it
possible that the younger students are being over-diagnosed with
ADHD?
Boys: ADHD or Just Young?
The table below shows the number of boys diagnosed with ADHD based
on the quarter of the year in which they were born, as well as the
proportion of boys born during that quarter.
| Birth Date | ADHD Diagnoses | Proportion of Births |
|---|---|---|
| Jan-Mar | 6880 | 0.244 |
| Apr-Jun | 7982 | 0.258 |
| Jul-Sep | 9161 | 0.257 |
| Oct-Dec | 8945 | 0.241 |
Table 1 ADHD diagnoses and birth date for boys
1Morrow, R., et al., “Influence of relative age on
diagnosis and treatment of attention-deficit/hyperactivity disorder
in children,” Canadian Medical Association Journal, April
17, 2012; 184(7): 755–762.
(a) What is the total number of boys diagnosed with ADHD in the
sample?
Total number of boys = _____________________
(b) For the null hypothesis, use the overall proportion of
births in a quarter to give the null proportion for that quarter.
Compute the expected number of ADHD diagnoses for each quarter
under this hypothesis.
Round your answers to one decimal place.
Jan-Mar = _____________
Apr-Jun = _____________
Jul-Sep = _____________
Oct-Dec = _____________
(c) Compute the χ2-statistic.
Round your answer to one decimal place.
χ2 = _____________
(d) Give the degrees of freedom and find the
p-value.
Enter the exact answer for the degrees of freedom, and round your
answer for the p-value to three decimal places.
df= _____________
p-value = _____________
(e) State the conclusion of the test.
There is very strong evidence that ADHD diagnoses are related to relative age.
There is some evidence that ADHD diagnoses are related to relative age.
ADHD diagnoses do not seem to be related to relative age in school.
(f) For which group of children does ADHD appear to be diagnosed more frequently than we would expect? Select the group that provides the greatest indication of this.
Jan-Mar
Apr-Jun
Jul-Sep
Oct-Dec
(g) For which group of children does ADHD appear to be diagnosed less frequently than we would expect? Select the group that provides the greatest indication of this.
Jan-Mar
Apr-Jun
Jul-Sep
Oct-Dec
In: Statistics and Probability
Edgerron Company is able to produce two products, G and B, with the same machine in its factory. The following information is available.
| Product G | Product B | ||||||||||
| Selling price per unit | $ | 190 | $ | 220 | |||||||
| Variable costs per unit | 80 | 132 | |||||||||
| Contribution margin per unit | $ | 110 | $ | 88 | |||||||
| Machine hours to produce 1 unit | 0.4 | hours | 1.0 | hours | |||||||
| Maximum unit sales per month | 550 | units | 200 | units | |||||||
The company presently operates the machine for a single eight-hour shift for 22 working days each month. Management is thinking about operating the machine for two shifts, which will increase its productivity by another eight hours per day for 22 days per month. This change would require $11,000 additional fixed costs per month. (Round hours per unit answers to 1 decimal place. Enter operating losses, if any, as negative values.)
2. How many units of Product G and Product B should the company produce if it continues to operate with only one shift? How much total contribution margin does this mix produce each month?
Product G Product B Total
Hours dedicated to the production of each product
Units produced for most profitable sales mix
Contribution margin per unit
Total contribution margin - one shift
3. If the company adds another shift, how many units of Product G and Product B should it produce? How much total contribution margin would this mix produce each month?
Product G Product B Total
Hours dedicated to the production of each product
Units produced for most profitable sales mix
Contribution margin per unit
Total contribution margin - two shifts
4. Suppose that the company determines that it can increase Product G’s maximum sales to 600 units per month by spending $10,000 per month in marketing efforts. Should the company pursue this strategy and the double shift?
Product G Product B Total
Hours dedicated to the production of each product
Units produced for most profitable sales mix
Contribution margin per unit
In: Finance
The Matsui Lubricants plant uses the FIFO method to account for its work-in-process inventories. The accounting records show the following information for a particular day: Beginning WIP inventory Direct materials $ 980 Conversion costs 557 Current period costs Direct materials 26,600 Conversion costs 18,090 Quantity information is obtained from the manufacturing records and includes the following: Beginning inventory 800 units (60% complete as to materials, 50% complete as to conversion) Current period units started 5,900 units Ending inventory 1,500 units (40% complete as to materials, 15% complete as to conversion) 3.Award: 10 out of 20.00 points Required: (1) Compute the equivalent units for the materials and conversion cost calculations. (2) Compute the cost per equivalent unit for direct materials and for conversion costs using the FIFO method. (Round your answers to 2 decimal places.) eBook & Resources eBook: Assign costs to products using first-in, first-out (FIFO) costing. References WorksheetDifficulty: 2 MediumLearning Objective: 08-05 Assign costs to products using first-in, first-out (FIFO) costing. 4.Award: 0 out of 30.00 points Compute the cost of goods transferred out and the ending inventory using the FIFO method. (Do not round intermediate calculations.)
In: Accounting