A pilot study is run to investigate the effect of a lifestyle intervention designed to increase medication adherence in patients with HIV. Medication adherence is measured as the percentage of prescribed pills that are taken over a one-week observation period. Ten patients with HIV agree to participate and their medication adherence before and after the intervention are shown below. Compute the standard deviation of the difference in adherence before versus after intervention.

USE SAS OR R IF SOFTWARE IS NECESSARY

2 large retail companies (W and T) are compared on a Census variable, percent of people who own their home within 3 square miles of the store. The percent that own their home for W is:

84, 79, 73, 81, 74, 77, 64, 78, 78, 78, 61

Percent for T is:

58, 61, 57, 62, 61, 59, 56, 64, 61, 70.

- Estimate the difference in percent owning their home for the two companies as to central tendency using lambda=.05. In estimating the difference, use 1 parametric approach, 1 robust(trimming) or nonparametric approach, and the best bootstrapping approach(not jackknife). Make a case for which approach is best.

In a statistics class, 8 students took their pulses before and after an exam. The pulse rates (beats per minute) of the students before and after the exam were obtained separately and are shown in the table. Treat this as though it were a random sample of statistics students. Test the hypothesis that the mean of statistics students' pulse rates is higher after an exam using a significance level of 0.05. Do the 5-step hypothesis test and submit an image of your work.

High Desert Potteryworks makes a variety of pottery products that it sells to retailers. The company uses a job-order costing system in which departmental predetermined overhead rates are used to apply manufacturing overhead cost to jobs. The predetermined overhead rate in the Molding Department is based on machine-hours, and the rate in the Painting Department is based on direct labor-hours. At the beginning of the year, the company provided the following estimates:

Job 205 was started on August 1 and completed on August 10. The company's cost records show the following information concerning the job:

Required:

1. Compute the predetermined overhead rates used in the Molding Department and the Painting Department.

2. Compute the total overhead cost applied to Job 205.

3-a. What would be the total manufacturing cost recorded for Job 205?

3-b. If the job contained 27 units, what would be the unit product cost?

High Desert Potteryworks makes a variety of pottery products that it sells to retailers. The company uses a job-order costing system in which departmental predetermined overhead rates are used to apply manufacturing overhead cost to jobs. The predetermined overhead rate in the Molding Department is based on machine-hours, and the rate in the Painting Department is based on direct labor-hours. At the beginning of the year, the company provided the following estimates:

Job 205 was started on August 1 and completed on August 10. The company's cost records show the following information concerning the job:

Required:

1. Compute the predetermined overhead rates used in the Molding Department and the Painting Department.

2. Compute the total overhead cost applied to Job 205.

3-a. What would be the total manufacturing cost recorded for Job 205?

3-b. If the job contained 27 units, what would be the unit product cost?

Explain Malibu Boats' business model (be certain to include the value proposition and profit formula). How — if at all — has it changed over the first five years?

Information:

Jack Springer, CEO of Malibu Boats since 2010, looked out over the main production facility of Louden, Tennessee, facility. In his ten years at the helm of the Tennessee boat company, he had transitioned it from an industry leader in high-performance towboats to a diversified firm that included high-performance fishing boats. A significant facet of this transition was Malibu's 2017 purchase of Cobalt Boats for $130 million and the 2018 purchase of Pursuit Boats for $100 million. Unknown at the time of the purchase was the havoc the COVID 19 pandemic would have on the world economy and the boating industry. Springer's task this summer morning was to prepare a written assessment to present at the upcoming Board of Directors meeting. Earlier in the week, the board had requested an assessment of the Cobalt and Pursuit acquisitions in the current economic context. As he looked out on the production floor, he pondered several questions: is Malibu in a better or worse competitive position with the acquisitions? What impact will a down economy have on the future success of this acquisition? And, what had the company learned from the experience?

Malibu Boats

Headquartered in Loudon, Tennessee, Malibu Boats is a top designer, manufacturer, and marketer of a diverse range of recreational powerboats, including performance sport, sterndrive, and outboard boats (Globe Newswire, 2020).

Founded in 1982 by Bob Alkema and Steve Marshall, Malibu Boats began production averaging two boats per week. The company grew quickly and increased staffing and production. In 1986, the company implemented an employee stock ownership program and had achieved a nine percent market share by 1988. Needing to expand production, Malibu opened a second plant in Tennessee, which allowed the company to produce almost 1000 custom ski boats that year.

In 1992, Malibu built a new manufacturing facility in Loudon, Tennessee. The company's focus on innovation led it to create and patent a fiberglass engine chassis system (FibECS) that eliminated vibration and noise. In the mid-nineties, Malibu expanded internationally to Australia thorough a licensee agreement.

In the area of water sports, Malibu was on the front end of research and development of wakeboarding features. By recognizing that the wakeboarding market was a natural outgrowth of the traditional sport of water skiing, Malibu was able to capitalize on this fast-growing market (Willet, 2012).

In the early 2000's Malibu established itself as the largest custom ski boat manufacturer in the world. In 2006, Horizon Holdings and Black Canyon Capital acquired Malibu.

Unlike competitors in the industry, Malibu was able to expand market share during the Great Recession of the mid-2000s.

Jack Springer was named CEO in 2009, and under his direction, Malibu launched the Axis Wake Research brand and relocated headquarters to the firm's production facility in Loudon, Tennessee. In doing so, Malibu positioned itself closer to the freshwater marine manufacturing industry.

In 2013, Malibu established a new holding company for all operations – Malibu Boats Inc. The new entity was formed, in part, to prepare for the company's initial public offering (IPO) in January of 2014. In going public, initial trading began at $14 a share, generating a market capitalization of $300 million (Kaiser, 2014).

Malibu's International Presence

Malibu has a small but important international footprint. In the early 1990s, the company had established its brand and a manufacturing facility in Australia through a licensee agreement. After Malibu's successful IPO, the company acquired all equity interests in Malibu Boats Australia and made assurances the company would maintain its presence in that market. Malibu Boats Inc. has publicly stated that Malibu Australia may become Malibu's primary producer for the entire Asian market.

In addition, through the acquisition of Cobalt boats and its dealer network, Malibu Boats Inc. has access to locations in Canada and overseas.

Acquisition of Cobalt and Pursuit Boats

Malibu's first major acquisition was a $130 million deal to purchase competitor Cobalt Boats (Malibu Boats, Inc., 2017). The deal maintained separate manufacturing operations; Malibu in Louden, TN, and Cobalt in Neodesha, KS.

In October of 2018, Malibu Boats acquired Pursuit Boats from S2 Yachts to expand its premium brand into the fast-growing saltwater fishing boat industry. The purchase price was $100 million. In addition to expanding its brand offerings, Malibu states, "the acquisition gives the company the ability to leverage manufacturing, design expertise, and distribution to accelerate outboard growth" (Trade Only Today, 2018). Malibu will finance the $100 million purchase with $50 million in cash on hand and $50 million in credit (Boating Industry, 2018).

"Pursuit is an incredible addition to the Malibu family," said Jack Springer. "This highly complementary business creates strong strategic opportunities to enhance product development across our portfolio of brands. Together, we have an opportunity to broaden our outboard offering, while leveraging the manufacturing and design expertise of the respective teams." (Trade Only Today, 2018).

Cobalt Boats

Cobalt Boats is a market leader in mid to large-sized sterndrive boats that include cruisers, bowriders, and outboards used for cruising, skiing, entertaining, surfing, and fishing (Malibu Boats, Inc., 2017). Cobalt is a world-class brand producing 24 models across six series. The company has a dealer network of 132 locations in the U.S., Canada, and overseas. The year prior to the acquisition, Cobalt generated approximately $140 million in net sales.

Pursuit Boats

Pursuit Boats, located in Fort Pierce, Florida, builds 15 models of high-quality saltwater fishing boats in lengths of 23 to 40 feet. Pursuit has established itself as a premium brand by building high-quality offshore fishing boats for over 40 years (Boating Industry, 2018).

A2 Yachts, the original parent company of Pursuit Boats, is a privately held firm. S2 Yachts will continue to operate and own Tiarra Yachts and Tiarra Sport. Limited financial information is available on S2 Yachts as it is a privately held firm.

Malibu Today

Today, Malibu Boats is a leading designer, manufacturer, and marketer of a diverse range of powerboats across four primary brands: Malibu, Axis, Cobalt, and Pursuit (Malibu Boats, 2019). Company accolades include holding the #1 market share position in the U.S. in the performance sport boat category, the #1 market share position in the U.S. in the 24'-29’ segment of the sterndrive category, and a holding a leading market position for fiberglass outboard fishing boats (Malibu Boats, 2019). Malibu's boats are used for activities including water sports and recreational boating and fishing. Retail prices across the various models range from $60,000 - $800,000.

• Malibu – The flagship line provides consumers the latest innovations and designed for customers seeking a premium performance sport boat.
• Axis – Designed for customers who desire a more affordable performance sport boat yet expect high performance.
• Cobalt – Comprise mid to large-sized cruisers and bowriders providing exceptional comfort, performance, and quality.
• Pursuit – Consist of saltwater outboard fishing boats using a center console, dual console, and offshore models.

Competitive advantage across the brands is created by new products, a strong dealer network, and innovation. Malibu has built a distinctive competitive advantage. As an example, the Integrated Surf Platform (ISP) patented Surf Gate is an industry-leading (and envied) product. Similar to other boat brands in the industry, the dealership network is vital to the customer experience and Malibu Boats. As such, Malibu dedicates significant resources to find, develop, and improve the performance of dealerships. As of July 2019, the company's distribution channels consisted of 350 dealer locations globally. Innovation continues in 2020 with the launch of Stern Turn, which provides the driver the maneuverability of a sterndrive or outboard boat, thereby making navigation easier (Malibu Boats, 2019).

Compared to competitors, Malibu Boats has a higher degree of vertical integration. Malibu manufactures many of its own parts, including towers, stainless materials, trailers, and, more recently, engines. CEO Jack Springer builds as much as 25% more in-house compared to rival companies (Malibu Boats, 2019).

• Malibu is traded on the NASDAQ – Global Market index under MBUU, a Class A common stock.
• In 2019 Net sales increased 37.6% to a record high of $684 million.
• Malibu Boats continued to be a growth company finishing 2019 as the twenty-eighth fasted growing company on Fortune Magazine's Fastest-Growing Companies List.

Marine Industry

Towable performance boats have been a large part of the marine industry. Malibu has long held a premium position in this industry segment. The saltwater outboard fishing market is one of the largest and fastest-growing segments of the marine industry.

Conclusion

As Springer reflected on the upcoming board meeting, he could not help but recall his optimism in the 2019 annual report. Specifically, he cited that the U.S economy was strong, consumer confidence high, inflation low, and employment high. As such, he was confident that markets would remain strong for the foreseeable future. Then, the COVID 19 Pandemic changed everything. The rosy picture he had painted for the 2020 fiscal year will look very different.

Facebook is considering purchasing a new state-of-the-art server farm (several large computers) that would allow the company to match customers’ pictures to advertisers. The company estimates this new service will generate additional advertising revenues of $6 million at the end of the first year, and of $7 million at the end of the second year. Working capital requirements increase by $3 million at the end of year 1. After 2 years, Facebook expects to sell the servers and generate a salvage value equal to 10% of the purchase price. The server farm costs a total of $8 million today. IRS rules prescribe straight-line depreciation for 3 years for these servers. At the end of year 2 all working capital will be 0. Offering the new services also implies an increase in costs (from electricity and personnel to maintain the applications) of $1 million at the end of year 1. These costs are expected to grow by 10% in year 2. The tax rate is 20% and the appropriate discount rate is 10%.

i. Should Facebook implement this project?

ii. Suppose that the IRS offers Facebook an option to depreciate the servers straight-line in 2 years instead of 3. Calculate the change in the net present value of purchasing the new server farm under the new depreciation schedule.

Revenue Recognition - Percentage of Completion - Project Instructions, Spring 2018

One of your clients is a large regional construction company. The company has many long-term projects in the works. The spreadsheet you are given contains some information about these jobs. Some of the jobs began last year and continue into the current year, so they exist on both tabs. The projects are in various phases of construction; some of which were completed during the current year.

You've been asked by your firm to analyze the data and prepare the following:

1) Complete the revenue recognition process by adding the necessary calculations into the blank columns F-J and L-M on the Current Year and Prior Year tabs and populate the data for all rows. It is expected that you look back at the text for definitions and to remind yourself of the percentage of completion method prior to asking questions.

Current year:

Prior Yr:

Beginning inventory, purchases, and sales for Item Gidget are as follows:

Assuming a perpetual inventory system and using the last-in, first-out (LIFO) method, determine (a) the cost of merchandise sold on September 27 and (b) the inventory on September 30.