For the past year, you have been working as a secretary/ processor for a local construction company, XYZ Homes, which specializes in the building of low-cost, limited-option homes. You left a comfortable, good- paying job to work for XYZ because it was family- owned and operated by longtime friends.

Soon after you began working for XYZ, you noticed questionable behavior on the part of Mr. and Mrs. XYZ’s two sons, who are company salesmen. In fact, you are positive that they are falsifying documents to increase their commissions and to trick local banks into approving mortgages to customers who don’t meet credit standards.

You are trying to decide how to handle the situation when one of the sons approaches you and asks you to produce and sign a memo to a bank, falsely stating that a certain potential home buyer is credit worthy. You refuse to do so and, after much consideration, approach Mr. XYZ about the situation. To your surprise, he simply brushes off your comments as unimportant and laughingly states that “boys will be boys.”

What would you do in this situation? Is the fact that you correctly refused to produce and sign a false memo enough, or are you obligated to report these crimes to the banks and proper authorities? Discuss the options, responsibilities, and implications you are facing. ANSWER IN THREE PARAGRAPHS OR SO.

The mean time required to complete a certain type of construction project is 52 weeks with a standard deviation of 3 weeks. Answer questions 4–7 using the preceding information and modeling this situation as a normal distribution.

4. What is the probability of the completing the project in no more than 52 weeks? a) 0.25 b) 0.50 c) 0.75 d) 0.05

5. What is the probability of the completing the project in more than 55 weeks? a) 0.1587 b) 0.5091 c) 0.7511 d) 0.0546

6. What is the probability of completing the project between 56 weeks and 64 weeks? a) 0.2587 b) 0.3334 c) 0.5876 d) 0.0911

7. What is the probability of completing the project within plus or minus one standard deviation of the mean? a) 0.951 b) 0.852 c) 0.759 d) 0.683

Clarabelles Construction is analyzing its capital expenditure proposals for the purchase of equipment in the coming year. The capital budget is limited to $ 12 comma 000 comma 000 for the year. Lenora Bentley​, staff analyst at Clarabelles​, is preparing an analysis of the three projects under consideration by Calvin Clarabelles​, the​ company's owner. LOADING... ​(Click the icon to view the data for the three​ projects.) Present Value of $1 table LOADING...    Present Value of Annuity of $1 table LOADING...    Future Value of $1 table LOADING...    Future Value of Annuity of $1 table LOADING... Read the requirements LOADING.... Requirement 1. Because the​ company's cash is​ limited, Clarabelles thinks the payback method should be used to choose between the capital budgeting projects. a. What are the benefits and limitations of using the payback method to choose between​ projects? Benefits of the payback​ method: A. Easy to understand and captures uncertainty about expected cash flows in later years of a project Your answer is correct.B. Indicates whether or not the project will earn the​ company's minimum required rate of return C. Utilizes the time value of money and computes each​ project's unique rate of return D. All of the above Limitations of the payback​ method: A. Fails to incorporate the time value of money and does not consider a​ project's cash flows after the payback period This is the correct answer.B. Cannot be used when​ management's required rate of return varies from one period to the next. C. Cannot be used for projects with unequal periodic cash flows Your answer is not correct.D. All of the above b. Calculate the payback period for each of the three projects. Ignore income taxes. ​(Round your answers to two decimal​ places.) Project A 2.93 years Project B 2.86 years Project C 1.7 years Using the payback​ method, which​ project(s) should Clarabelles ​choose? Projects B and C Requirement 2. Calculate the NPV for each project. Ignore income taxes. ​(Round your answers to the nearest whole dollar. Use parentheses or a minus sign for negative net present​ values.) The NPV of Project A is $ . Enter any number in the edit fields and then click Check Answer. Project A Project B Project C Projected cash outflow Net initial investment $6,000,000 $4,000,000 $8,000,000 Projected cash inflows Year 1 $2,050,000 $1,100,000 $4,700,000 Year 2 2,050,000 2,300,000 4,700,000 Year 3 2,050,000 700,000 50,000 Year 4 2,050,000 25,000 Required rate of return 8% 8% 8%

Glenn Grimes is the founder and president of Heartland Construction, a real estate development venture. The business transactions during February while the company was being organized are listed as follows.

Required:

a. Prepare journal entries to record the above transactions. Select the appropriate account titles from the following chart of accounts.

b. Indicate the effects of each transaction on the company's assets, liabilities, and owners' equity for the month of February. The Feb. 1 transaction is provided for you.

Feb. 1 = Cash $500,000 (assets)

1. Suppose that the government needs to raise money to pay for road construction and repair, school supplies, police, etc. It is trying to decide whether it should tax grocery purchases or meals at expensive restaurants. What would you recommend and why? Make sure to refer to concepts studied in chapter 8.
2. As you read in the lecture, economists disagree about the supply elasticity of labor. In your experience, do people respond to changing pay by working more (or less), or do they work about the same hours, no matter the pay?

Case Inc. is a construction company specializing in custom patios. The patios are constructed of concrete, brick, fiberglass, and lumber, depending upon customer preference. On June 1, 2017, the general ledger for Case Inc. contains the following data.

Subsidiary data for Work in Process Inventory on June 1 are as follows.

During June, raw materials purchased on account were $ 5,292, and all wages were paid. Additional overhead costs consisted of depreciation on equipment $ 972 and miscellaneous costs of $ 432 incurred on account.

A summary of materials requisition slips and time tickets for June shows the following.

Overhead was charged to jobs at the same rate of $ 1.25 per dollar of direct labor cost. The patios for customers Rodgers, Stevens, and Linton were completed during June and sold for a total of $ 20,412. Each customer paid in full.

Partially correct answer iconYour answer is partially correct.

Journalize the June transactions: (1) for purchase of raw materials, factory labor costs incurred, and manufacturing overhead costs incurred; (2) assignment of direct materials, labor, and overhead to production; and (3) completion of jobs and sale of goods. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Round answers to 0 decimal places, e.g. 2,500.)

eTextbook and Media

List of Accounts

Partially correct answer iconYour answer is partially correct.

Post the entries to Work in Process Inventory. (Round answers to 0 decimal places, e.g. 2,500.)

eTextbook and Media

List of Accounts

Incorrect answer iconYour answer is incorrect.

Reconcile the balance in Work in Process Inventory with the costs of unfinished jobs. (Round answers to 0 decimal places, e.g. 2,500.)

eTextbook and Media

List of Accounts

Partially correct answer iconYour answer is partially correct.

Prepare a cost of goods manufactured schedule for June. (Round answers to 0 decimal places, e.g. 2,500.)

3. You are a construction engineer working for a large utility contractor. The project you are working on is in New York City (Manhattan). You are installing approximately 1,000 L.F. of 48” dia. RCP for storm drains. Invert elevation ranges from 9’ to 14’ below grade.
   • Pay lines for the trench are indicated in the attached specification.
   • Soil characteristics range from SM to SC, based on the Unified Soil Classification.
   • What considerations would you make with regards to a trenching & shoring specifications for this pipe run? Your considerations should include:
   • Working on active & congested city streets
   • Encountering of groundwater
   • Anticipate encountering other underground utilities crossing over the trench +/- every 10 L.F.
   • Soil removal, storage, & backfilling. Soil can be re-used as suitable fill, providing concrete encasement & pavement specifications are met (make an assumption for pavement details, based on previous class notes).
   • Shoring specifications (type). Shoring must conform to OSHA requirements

• NOTE: It is not necessary to design a shoring system or calculate soil volumes. The answer should be a procedural or methodology consideration.

Anderson Metals manufactures and sells #3 steel rebar that is used in the construction of slabs and driveways. The steel bar not only strengthens the finished concrete product, but it also has unique properties such that its temperature related expansion and contraction matches that of concrete. The product is manufactured and sold in 20' long "sticks." The product is generally produced and sold to match customer demand, and there is not a significant amount of finished goods inventory at any point in time. Summary information for 2020 is as follows:

Sales were $30,000,000, consisting of 5,000,000 sticks

Total variable costs were $18,000,000.   

Total fixed costs were $10,000,000.

Net income was $2,000,000.       

The general economic conditions appear to be deteriorating heading into 2021, and there is some concern about a reduction in sales volume. The following questions should each be answered independent of one another.

(a)          What is the company's break-even point in "sticks?"       

(b)          1) What would be their net income or net loss if volume is reduced by 30%? 2) Can the company sustain a 30% reduction in total volume, and remain profitable?            

(c)           The company's sole shareholder, Doug Anderson, generally lives off of dividends paid by the business. The business typically declares and pays a dividend equal to $150,000 for Doug's normal living expenses. Doug is demanding a $96,000 increase in dividends for 2021. What total sales volume must Anderson Metals produce in 2021 to accomodate the increase in dividends andmaintain the same net income?       

(d)          If total volume is expected to decrease by 20%, and the company wishes to continue to produce a $2,000,000 net income by raising the per unit selling price, 1) what revised per stick price must be imposed? 2) Will this strategy necessarily work?           

(e)          If the company expects a drop in raw material prices to reduce total variable costs to $2.80 per stick, but all other revenue and cost factors to be unaffected, what will be the revised break-even point in sales and units?     

Hint: All questions are weighted equally. There are two questions in part B and part D. Make sure you answer all questions to maximize points.   

Hint: Question #2 in part D is a marketing question. The accountants in part D will say "raise the price", but how would you react if you were the marketing expert on the management team?

Wildhorse Inc. is a construction company specializing in custom patios. The patios are constructed of concrete, brick, fiberglass, and lumber, depending upon customer preference. On June 1, 2020, the general ledger for Wildhorse Inc. contains the following data.

Subsidiary data for Work in Process Inventory on June 1 are as follows.

During June, raw materials purchased on account were $5,100, and all wages were paid. Additional overhead costs consisted of depreciation on equipment $800 and miscellaneous costs of $400 incurred on account.

A summary of materials requisition slips and time tickets for June shows the following.

Overhead was charged to jobs at the same rate of $1.25 per dollar of direct labor cost. The patios for customers Rodgers, Stevens, and Linton were completed during June and sold for a total of $20,800. Each customer paid in full.

(a)

Journalize the June transactions: (1) for purchase of raw materials, factory labor costs incurred, and manufacturing overhead costs incurred; (2) assignment of direct materials, labor, and overhead to production; and (3) completion of jobs and sale of goods. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

In our construction of the savings and investment model, we considered government spending to be immediate spending. In other words, there was no “investment” component to government spending. Let’s change up that assumption. Suppose government spending comes in two types: investment spending (new airports, for example) as well as government consumption (snow plowing, for example). Call the first GI and the second GCE.

a. Derive the savings and investment equations under this new assumption and prove, once again, that in equilibrium, savings equals investment

. b. Draw the savings and investment functions on a chart of the market for loanable funds.

c.Show on the chart you just drew what difference it makes if the government increases its deficit to increase investment rather than government consumption.