Some Accounting for Inventories questions I have:

1.

CAISCO Sales Inc. had a beginning inventory of May comprising of 700 units that had a cost of $80/unit. A summary of purchases and sales during the month of May are as follows:

If CAISCO Sales Inc. uses a periodic inventory system, which of the following statements is true?

CAISCO Sales Inc. must use the weighted average cost flow assumption since a perpetual inventory system is used.

CAISCO Sales Inc. must use the FIFO cost flow assumption since a periodic inventory system is used.

None of the other alternatives are correct

CAISCO Sales Inc.'s ending inventory will be higher if FIFO is used than if LIFO is used.

CAISCO Sales Inc.'s ending inventory consists of 1,200 units only if FIFO cost flow method IS assumed.

2.

Chime Inc. counted and valued its inventory using the first-in, first-out (FIFO) cost flow assumption at both December 31, 2004 and 2005 and reported these amounts on its financial statements. While there was no consignment inventory on hand at December 31, 2005, there was at December 31, 2004. If consignment inventory (inventory not belonging to Chime, but stored on its premises), had been inadvertently counted and included in the 2004 inventory valuation, the

inventory would have been understated at December 31, 2005

inventory would have been overstated at December 31, 2005

net income would have been understated in 2004

None of the other alternatives are correct

net income would have been understated in 2005

3.

Is there a correlation between mean course grade and mean attendance in data set 7176? What is the equation of the regression line? What is the best prediction for a mean attendance of 80%?

Wilderness Products, Inc., has designed a self-inflating sleeping pad for use by backpackers and campers.

The following information is available about the new product:

a. An investment of $1,500,000 will be necessary to carry inventories and accounts receivable and to purchase some new equipment needed in the manufacturing process.

The company’s required rate of return is 10% on all investments.

b. A standard cost card has been prepared for the sleeping pad, as shown below: Standard Quantity or Hours Standard Price or Rate Standard Cost Direct materials 6 yards $ 3.00 per yard $ 18.00 Direct labor 3.6 hours $ 6.00 per hour 21.60 Manufacturing overhead (20% variable) 3.6 hours $ 10.00 per hour 36.00 Total standard cost per pad $ 75.60

c. The only variable selling and administrative expense will be a sales commission of $6 per pad. The fixed selling and administrative expenses will be $2,749,800 per year.

d. Because the company manufactures many products, no more than 97,200 direct labor-hours per year can be devoted to production of the new sleeping pads. e. Manufacturing overhead costs are allocated to products on the basis of direct labor-hours.

Required: 1. Assume that the company uses the absorption approach to cost-plus pricing. a. Compute the markup percentage that the company needs on the pads to achieve a 10% return on investment (ROI) if it sells all of the pads it can produce. b. What selling price per sleeping pad will the company establish if it uses a markup percentage on absorption cost? (Round intermediate calculations and final answer to 2 decimal places.) c. Assume that the company is able to sell all of the pads that it can produce. Prepare an income statement for the first year of activity. Compute the company’s ROI based on the first year of activity. 2. After marketing the sleeping pads for several years, the company is experiencing a falloff in demand due to an economic recession. A large retail outlet will make a bulk purchase of pads if its label is sewn in and if an acceptable price can be worked out. What is the minimum acceptable price for this special order? (Round your answer to 2 decimal places.)

Given the following data for operating departments A and B prepare a schedule using the direct and step method of allocation to allocate service department costs to the operating departments

.

                                     Costs    # of employee           Square feet     

Operating dept A             1600           100                          400                  

Operating dept B             1300           100                          300                  

Maintenance                   3000           100                          300                  

Payroll                          2100           100                          300                  

For the step method begin with the payroll department

The relationship between income and total utility (TU) for 2 investors (Alan and Bob) is as follows:

  Alan                               Bob

Income      TU            Income     TU

5,000         14            5,000        6

10,000       24           10,000       14

15,000       32           15,000       24

20,000       38           20,000       36

25,000       43           25,000       52

30,000       47           30,000       72

35,000       49           35,000       100

Each investor has been confronted with the following three investment opportunities.  The first opportunity is an investment which pays €15,000 risk free.  Opportunity two offers a 0.4 probability of a €25,000 payment and a 0.6 probability of paying €10,000.  The final investment will either pay €35,000 with a probability of 0.25 or €5,000 with a probability of 0.75.

The expected value of the third opportunity is

5,000

35,000

10,000

12,500

The expected utility of the second opportunity for Alan is

On February 1, a salesperson for Metropolitan Life Insurance met with the Drakes at their home. The Drakes lived in a 55+ retirement community with a homeowners association that prohibited door-to-door sales. After facing a persuasive sales pitch about the importance of providing for the surviving spouse and their kids and grandkids, the Drakes signed a contract to purchase a life insurance policy for a total of $3000 per year. A down payment of $100 was required, with the remainder of the cost to be paid in monthly payments. Two days later, the Drakes had second thoughts about purchasing the insurance. Mr. Drake contacted the insurance company and stated that they had decided to cancel the contract. The insurance company said it would be impossible to cancel the first year and the Drakes would be in breach of contract if they did not make all of the payments. Did Metropolitan Life Insurance violate any consumer laws by not allowing the Drakes to rescind their contract? Explain.

If the Right hand side of constraint 1 decreased by 20 units and the right hand side of constraint 3 decreased by 25 units, find the solution, the profit and the % from the 100% rule (use 3 decimal places)

6. Calculate the following, and make sure to show your work, including units and substance on every numerical value:

              a. What is the molarity of a solution that is made of 2.768 g of Pb(NO3)2 in 150 mL of H2O?

              b. How many grams of calcium chloride would it take to make 2.7L of a .10M solution?

c. What is the concentration of a solution made by diluting 100 mL of 3.0 M HCl with 300 mL water?

              c. How many milliliters of 6.0 M HNO3 is needed to make 20 L of .35 M HNO3?

              d. If 35 mL of 1.5 M lead nitrate reacts in a double replacement reaction with 40 mL of 2.0 M potassium iodide, how many grams of lead (II) iodide can be produced? (Hint: You will need a balanced equation first).

In a souvenir, 100 tourist enter each day. Assume that each tourist's decision to purchase a souvenir is independent of one another. The probability that a tourist purchases a souvenir is 40%. The probability that a tourist purchases a souvenir is 40%. The probability that a tourist purchases more than one souvenir is 0%.

(a) What is the expected number of purchases each day?

(b) What is the probability that 48 tourist make purchases on a particular day?

(c) Assume that each souvenir is sold for $8. 90% of the time, what is the minimum revenue of the shop?

(d) What is the probability that the 5th tourist of a particular day makes the first purchase of that day?

(e) On another day, 70 tourist make purchases in the souvenir shop of all the tourist that visited, 8 different tourist are surveyed. What is the probability that 5 of the surveyed. What is the probability that 5 of the surveyed tourist need a purchase?