Subway, the fast food restaurant franchise, recently announced it is bringing back the “$5 Footlong” promotion. Hundreds of Subway franchise owners are protesting the promotion, saying that they cannot afford to sell the footlong sub sandwiches for $5.

Assume that the costs related to a Subway footlong and a Subway franchisee include the following:

Questions (Be sure to understand the following concepts before answering: (Variable Costs, Fix Costs, Mixed Costs):

1. Identify each of the listed costs of one footlong sub sandwich as either variable, fixed, or mixed.
2. What costs and factors do you think should be relevant to the footlong sub sandwich pricing decision? Explain.
3. Do you agree that a Subway franchisee would lose money for each footlong sold for $5? Why or why not?

12a. A 0.260-kg piece of aluminum that has a temperature of -159 °C is added to 1.0 kg of water that has a temperature of 2.7 °C. At equilibrium the temperature is 0 °C. Ignoring the container and assuming that the heat exchanged with the surroundings is negligible, determine the mass of water that has been frozen into ice. Number Units

b. If the price of electrical energy is $0.09 per kilowatt·hour, what is the cost of using electrical energy to heat the water in a swimming pool (12.0 m x 9.00 m x 1.50 m) from 12 to 26 °C?

c. In an electrically heated home, the temperature of the ground in contact with a concrete basement wall is 12.0 ^oC. The temperature at the inside surface of the wall is 20.3 ^oC. The wall is 0.18 m thick and has an area of 6.7 m². Assume that one kilowatt hour of electrical energy costs $0.10. How many hours are required for one dollar's worth of energy to be conducted through the wall?

Number  Units

hrs

d. A wall in a house contains a single window. The window consists of a single pane of glass whose area is 0.11 m² and whose thickness is 6 mm. Treat the wall as a slab of the insulating material Styrofoam whose area and thickness are 17 m² and 0.15 m, respectively. Heat is lost via conduction through the wall and the window. The temperature difference between the inside and outside is the same for the wall and the window. Of the total heat lost by the wall and the window, what is the percentage lost by the window?

Percentage lost by window = Number  Units

W°CJ%°FmkgC°

Kaelea, Inc., has no debt outstanding and a total market value of $130,000. Earnings before interest and taxes, EBIT, are projected to be $9,600 if economic conditions are normal. If there is strong expansion in the economy, then EBIT will be 21 percent higher. If there is a recession, then EBIT will be 34 percent lower. The company is considering a $38,000 debt issue with an interest rate of 6 percent. The proceeds will be used to repurchase shares of stock. There are currently 5,200 shares outstanding. Assume the company has a market-to-book ratio of 1.0.

a. Calculate return on equity, ROE, under each of the three economic scenarios before any debt is issued, assuming no taxes. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)

b. Calculate the percentage changes in ROE when the economy expands or enters a recession, assuming no taxes. (A negative answer should be indicated by a minussign. Do not round intermediate calculations and enter your answers as a percent rounded to the nearest whole number, e.g., 32.)

  
Assume the firm goes through with the proposed recapitalization and no taxes.

c. Calculate return on equity, ROE, under each of the three economic scenarios after the recapitalization. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)

d. Calculate the percentage changes in ROE for economic expansion and recession. (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)

Smoky Mountain Corporation makes two types of hiking boots—the Xtreme and the Pathfinder.  

The company has a traditional costing system in which manufacturing overhead is applied to units based on direct labor-hours. Data concerning manufacturing overhead and direct labor-hours for the upcoming year appear below:

Required:

1. Compute the product margins for the Xtreme and the Pathfinder products under the company’s traditional costing system.

2. The company is considering replacing its traditional costing system with an activity-based costing system that would assign its manufacturing overhead to the following four activity cost pools (the Other cost pool includes organization-sustaining costs and idle capacity costs):

Compute the product margins for the Xtreme and the Pathfinder products under the activity-based costing system.

3. Prepare a quantitative comparison of the traditional and activity-based cost assignments.

Blossom, Inc., is a small company that manufactures three versions of patio tables. Unit information for its products follows:     

Blossom has determined that it can sell a limited number of each table in the upcoming year. Expected demand for each model follows:

Required:
1. Suppose that direct labor hours has been identified as the bottleneck resource. Determine how Blossom should prioritize production by rank ordering the products from 1 to 3.



2. If Blossom has only 50,000 direct labor hours available, calculate the number of units of each table that Blossom should produce to maximize its profit. (Enter the products in the sequence of their preferences; the product with first preference should be entered first.)



3. Suppose that the number of machine hours has been identified as the most constrained resource. Determine how Blossom should prioritize production by rank ordering the products from 1 to 3.



4. If Blossom has only 247,000 machine hours available, calculate the number of units of each table that Blossom should produce to maximize its profit. (Enter the products in the sequence of their preferences; the product with first preference should be entered first.)

The following was taken from the books of Coyote Company as of December 31, 2017.

a. Prepaid insurance expired during the year, $11,000.

b. Estimated bad debts, 1.0% of sales.

c. Inventory as of 12/31/2017 turned out to be $40,000.

d. Four month rent of $56,000 was paid in advance on October 1, 2017 and charged to rent expense then. 4 months From Oct. 2017 to Jan 2018.

e. Furniture and equipment have an average useful life of 5 years and no salvage value. Coyote Company uses the straight line method of depreciation.

f. Utility bill of $600 for the month of December 2017 will be paid on its due date, January 10, 2018: a missing record.

g. Salaries earned but not yet paid by December 31, 2017, $6,000.

Instruction: prepare

1. Any necessary adjusting entries at the end of 2017.

2. Income Statement and statement of retained earnings, and balance sheet of the company for the year 2017.

3. Any necessary closing entries at the end of 2017.

Assume you work for OSHA (Occupational Safety and Health Administration) and have complaints about noise levels from some of the workers at a state power plant. You charge the power plant with taking decibel readings at 2 different areas of the plant at different times of the day and week. The results of the data collection are listed. The safe hearing level is approximately 120 decibels

Question 1. Calculate mean, median, mode, and standard deviation to describe the data of collected data for Area 1 using Data>Data Analysis>Descriptive Statistics. Make precise interpretations of each statistical measure in Text Box (Insert>Text Box). (2 points)

Question 2. Calculate first, second and third quartiles for Area 2 (Q1, Q2, Q3, Excel: =QUARTILE()) and interquartile range (IQR=Q3-Q1). Make precise interpretations of each statistical measure. (2.0 points)

Question 3. Determine class width and create a frequency table with 4 classes for Area 1. The table should have the following headings (2.0 points): Class limits Frequency Relative frequency Cumulative frequency

Question 4. Draw bar chart (based on the data from question 3) describing the obtained relative frequency. Provide description. (0.5 point)

Question 5. Make recommendations about which plant area workers must be provided with protective ear wear. (1.0 point)

10) If a gas sample is heated, which change is expected?

a. Volume would increase.

b. Volume would decrease.

c. Volume is a fixed quantity; it cannot change.

d. The initial and final temperature does not affect volume.

11) If the pressure of a liquid was 600. mmHg, what is its pressure in torr?

12) In a gas, the particles

a. are close to each other.

b. are moving rapidly.

c. attract or repel.

d. All of these statements are true.

13) Suppose we take a 4.0 liter sample of a gas at 1.0 atm and increase the temperature from 22 C to100 C. What will the final pressure be if the volume does not change?

17) What is true about gases when the temperature increases?

a. The gas molecules collide with the walls of the container with more force.

b. The gas molecules move faster.

c. Gas particles hit the walls of the container more often.

d. All of these statements are true.

18) Which statement is incorrect when considering gases?

a. Gas molecules are not in motion at room temperature.

b. The pressure of a gas increases when the gas particles collide with the walls of the

chamber with more force.

c. A reason why molecules of a gas fill a container is that there is no attraction between the

molecules of the gas.

d. Statements 1 and 2 are both false.

19) Which statement is true?

a. When pressure increases, volume increases.

b. When temperature increases, volume increases.

c. When temperature increases, pressure decreases.

d. When the number of moles of gas increases, the pressure decreases.

20) What mass of neon has a volume of 56.0 L at STP?

Consider the following information about two stocks (D and E) and two common risk factors (1 and 2):

1. Assuming that the risk-free rate is 5.2%, calculate the levels of the factor risk premia that are consistent with the reported values for the factor betas and the expected returns for the two stocks. Round your answers to one decimal place.

   λ₁:   %

   λ₂:   %

2. You expect that in one year the prices for Stocks D and E will be $58 and $38, respectively. Also, neither stock is expected to pay a dividend over the next year. What should the price of each stock be today to be consistent with the expected return levels listed at the beginning of the problem? Round your answers to the nearest cent.

   Today's price for Stock D: $  

   Today's price for Stock E: $  

3. Suppose now that the risk premium for Factor 1 that you calculated in Part a suddenly increases by 0.20% (i.e., from x% to (x + 0.20)%, where x is the value established in Part a. What are the new expected returns for Stocks D and E? Round your answers to two decimal places.

   Expected return for Stock D:   %

   Expected return for Stock E:   %

4. If the increase in the Factor 1 risk premium in Part c does not cause you to change your opinion about what the stock prices will be in one year, what adjustment will be necessary in the current (i.e., today’s) prices? Do not round intermediate calculations. Round your answers to the nearest cent.

   Today's price for Stock D: $  

   Today's price for Stock E: $  

Problem 3 (Textbook Reference: P4-4) – Activity-based costing versus traditional costing C&W Corporation manufactures travel clocks and watches. Overhead costs are currently allocated using direct- labor hours, but the controller has recommended using an activity-based costing system based on the following data:

Activity =Production setup, Material handling and requisition, Packaging and shipping ,Total overhead

Cost Driver= Setups, Parts, Units shipped

Cost $ 100,000 $ 30,000 $ 60,000 $ 190,000

Activity Level= Travel Clocks20,24,80,000 Watches 30, 36, 120,000 Required (Traditional Method):

1. Using the traditional cost assignment method, calculate the plant-wide overhead rate using labor-hours as the allocation base. Assume labor-hours required to assemble each unit are 0.5 hours per travel clock and 1.0 hour per watch, and that 80,000 travel clocks and 120,000 watches were produced. Plant-wide overhead rate: $___________________per direct labor hour

2. Under the traditional cost assignment method using the plant-wide overhead rate, how much total overhead cost is allocated to the: Travel clocks: $________________ Watches: $________________ *** Problem 3 is continued on the next page *** Required (ABC Method):

3. Using the Activity-based Costing (ABC) assignment method, calculate the activity cost rates for the following activities: (a) Setup costs: $___________________per production run (b) Materials handling costs: $___________________per part (c) Packaging and shipping costs: $___________________per shipment

4. Using the Activity-based Costing (ABC) assignment method how much total overhead cost is allocated to the: Travel clocks: $________________ Watches: $________________