Concept for Analysis 8-10 PLEASE SHOW WORK

Concord Company is considering changing its inventory valuation method from FIFO to LIFO because of the potential tax savings. However, management wishes to consider all of the effects on the company, including its reported performance, before making the final decision.

The inventory account, currently valued on the FIFO basis, consists of 1,000,000 units at $8 per unit on January 1, 2017. There are 1,000,000 shares of common stock outstanding as of January 1, 2017, and the cash balance is $406,920.

The company has made the following forecasts for the period 2017-2019.

2017 2018 2019

Unit sales (in millions of units) 1.09 1.02 1.31

Sales price per unit $10 $12 $12

Unit purchases (in millions of units) 1.02 1.09 1.2

Purchase price per unit $8 $9 $10

Annual depreciation $300 $300 $300

(in thousands of dollars)

Cash dividends per share $0.15 $0.15 $0.15

Cash payments for additions $350 $350 $350

to and replacement of

plant and equipment (in thousands of dollars)

Income tax rate 40% 40% 40%

Operating expenses 15% 15% 15%

(exclusive of depreciation) as a

percent of sales

Common shares outstanding 1 1 1

(in millions)

(a) Compute the following data for Concord Company under the FIFO and the LIFO inventory method for 2017-2019. Assume the company would begin LIFO at the beginning of 2017. (Enter amounts in thousands. Round earnings per share values to 2 decimal places, e.g. 52.75. Round other answers to 0 decimal places, e.g. 125.)

(1)

Year-end inventory balances.

(2)

Annual net income after taxes.

(3)

Earnings per share.

(4)

Cash balance.

CVP—sensitivity analysis. Joan’s Beauty College is considering introducing a new nail design seminar to run on an annual basis with the following price and cost characteristics:

Required: Please answer 3 and 4.

2a. What enrollment enables Joan’s Beauty College to break even?

29,480/(405-185)= 134 enrollment

2b. How many students will enable Joan’s Beauty College to make an operating profit of $35,750 for the year?

(29480+35750)/(405-185)=297 enrollments

2c. Assume that the projected enrollment for the year is 350 students for each of the following situations:

(1) What will be the operating profit for 350 students?

((405-185)x350)-29,480= $47520

(2) What would be the operating profit and changecompared to the results from c(1)if the tuition per student (that is, sales price) (show amount change & %)

(i).decreased by 10 percent?

47520-(405 x 350 x .1)= 33,345

                                                (47520-33345)/47520= 29.8%

Operating profit- $33,345   Operating profit change in amount= $14,175

(ii). Increased by 20 percent?

                                                47520+(405x350x.2)= $75,870

Operating profit increase= (28350)/47520= 59.7%

Operating profit= $75,870

OP change in amount= $28,350

(3) What would be the operating profit and changecompared to the results from c(1)if variable costs per student (show amount change & %)

(i) increased by 10 percent?

(ii) Decreased by 20 percent?

(4) Suppose that fixed costs for the year are 10 percent lower than projected, whereas variable costs per student are 20 percent higher than projected. What would be the operating profit(loss)for the year?

1. Sales-Related Transactions, Including the Use of Credit Cards

   Journalize the entries for the following transactions:

   a. Sold merchandise for cash, $116,300. The The cost that is reported as an expense when merchandise is sold.cost of the merchandise sold was $72,000. (Record the sale first.)

   	Accounts Receivable Cash Credit Card Expense Sales Sales Discounts
   	Accounts Receivable Cash Cost of Merchandise Sold Sales Sales Discounts
   	Accounts Receivable Cost of Merchandise Sold Cash Merchandise Inventory Sales
   	Accounts Receivable Cash Cost of Merchandise Sold Merchandise Inventory Sales Discounts

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   b. Sold merchandise on account, $755,000. The cost of the merchandise sold was $400,000. (Record the sale first.)

   	Accounts Receivable Accounts Payable Merchandise Inventory Sales Sales Discounts
   	Accounts Receivable Cash Cost of Merchandise Sold Sales Sales Discounts
   	Accounts Payable Cash Cost of Merchandise Sold Sales Merchandise Inventory
   	Accounts Receivable Cash Cost of Merchandise Sold Sales Discounts Merchandise Inventory

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   c. Sold merchandise to customers who used MasterCard and VISA, $1,950,000. The cost of the merchandise sold was $1,250,000. (Record the sale first.)

   	Accounts Receivable Accounts Payable Cash Credit Card Expense Sales
   	Accounts Payable Cash Credit Card Expense Sales Sales Discounts
   	Accounts Payable Accounts Receivable Cost of Merchandise Sold Credit Card Expense Merchandise Inventory
   	Accounts Receivable Cash Cost of Merchandise Sold Credit Card Expense Merchandise Inventory

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   d. Sold merchandise to customers who used American Express, $330,000. The cost of the merchandise sold was $230,000. (Record the sale first.)

   	Accounts Receivable Cash Credit Card Expense Merchandise Inventory Sales
   	Accounts Receivable Cash Cost of Merchandise Sold Sales Sales Discounts
   	Accounts Receivable Cost of Merchandise Sold Credit Card Expense Merchandise Inventory Sales
   	Cash Cost of Merchandise Sold Credit Card Expense Merchandise Inventory Sales Returns and Allowances

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   e. Paid $81,500 to National Clearing House Credit Co. for service fees for processing MasterCard, VISA, and American Express sales.

   	Accounts Receivable Cash Cost of Merchandise Sold Credit Card Expense Merchandise Inventory
   	Accounts Receivable Cash Cost of Merchandise Sold Credit Card Expense Merchandise Inventory

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Using Maven and Web Programming Basics

1. Build a program using maven 75 pts

A. Create file structure

Create a file structure for your program like the following:

web_app
→ src
→ main
→ java
→ resources
→ webapp
→ target

make sure you have in src/main/ the directories java, resources, and webapp.

In most Java IDEs (Eclipse, IntelliJ, etc.) you can make a maven project, which will have this structure by default (without the webapp directory), you can use that IDE tools then add the webapp directory.

B. Make pom.xml

Apache maven is a build automation tool that can compile and build your program as well as download any .jar dependencies you need. I’ll provide you with a pom.xml file with the parameters set to download the .jar files you need to make a web server in java. Put this file at the top level of your program file structure (same level as the the src and target directories). To verify you examined the file, change the value in the <name> tag from YOUR_WEB_APP to the name of your program. You can see all the jar files that are needed in <dependencies> and where the program is named in

<build>
<plugin>

<programs>

<program>

the file that sets up the tomcat program is in webDriver.Main (which I will describe later) and the program name is web (if you are doing the extra credit don’t change this)

C. Add tomcat driver

For this program we’ll be using the Apache Tomcat web framework (another popular one for java is Glassfish). In IDE you can use the Web Application projects to form your web program, but for this class I want you to build the web app driver so you can more easily publish your software and so you can see what is need to make a java web server.

To start make a package in src/main/java called webDriver (same as the name above), then add the provided Main.java file into that package (web_app/src/main/java/webDriver). If you see errors in your IDE your package names do not match (package webDriver) or you set up the pom.xml file incorrectly. Otherwise it should not have any errors. This class when run talks to the operating system to make your computer into a web server.

D. Create web.xml file

To help out your web server with some piping of traffic you need to setup a web.xml file. In your src/main/webapp directory create a folder called WEB-INF. In there put the provided web.xml file. This file helps direct traffic for the server, but it’s really simple for this homework, but we’ll build on it, in later assignments. To verify you have looked at the file, change the <display-name> value in the file, to your program name. The <welcome-file-list> gives the search order for the server’s default landing page.

E. Generate index.html

Finally you should have a working server to check if it works put an index.html page in src/main/webapp. I provided one, but you can put your own one in there.

To test if everything work, you’ll need to build the maven package. For windows users, open powershell or cmd, osX users open console, and terminal for Linux users, navigate to your project and type
mvn package

you should get a bunch of messages where the last five lines are similar to:

[INFO] ------------------------------------------------------------------------

[INFO] BUILD SUCCESS

[INFO] ------------------------------------------------------------------------

[INFO] Total time: 1.862 s

[INFO] Finished at: 2020-01-12T13:01:55-07:00

[INFO] ------------------------------------------------------------------------

After doing some deep analysis, you find that shares of Bank of America (BAC) are over-priced and the expected return on these shares is 7.2%, while shares of Morgan Stanley (MS) are under-priced and the expected return on these shares is 12.3%.

You want to create an arbitrage portfolio (not following the book recipe) where you will buy MS and short-sell BAC. In particular, your weights will be +100% for MS, and -100% for BAC.

What is the expected return of this arbitrage portfolio?

Note here that you have an arbitrage portfolio where the sum of weights = 0%. However, a portfolio return is a portfolio return. So just compute the expected portfolio return as usual.

{Give your answer as a percentage with 1 decimals, e.g., if the answer is 0.0345224 (or 3.45224%) , enter 3.5 as your answer.}

a) With lockdowns currently imposed across Europe and North America until mid-April, even in
the best-case scenario it will take at least until mid-June for market confidence to be restored in
these economies. The implication is that nearly six million workers in Bangladesh’s formal sector
– which is largely manufacturing – will be without steady work for an extended period.

Which part of the production function do you think the issue mentioned above will affect? Draw
two diagrams to show Real GDP and LRAS is affected in the long run.

b) “The government should also consider an unconditional cash transfer program for an initial
period of three months at a rate of $95 per month, which corresponds to the minimum wage for
the formal sector in Bangladesh. This would cost the government roughly $14 billion, or 4% of
GDP. While this sort of cash transfer program always suffers from targeting issues, Bangladesh
enjoys a highly sophisticated mobile financial services network, which could improve the cover
of the program. A concerted effort involving the non-governmental organizations working in the
informal sector, mobile financial service providers, and the government could be developed to
deliver this urgently needed social assistance.”

Which type of environment under institutions is the above extract referring to? Explain.

Amazon Beverages produces and bottles a line of soft drinks using exotic fruits from Latin America and Asia. The manufacturing process entails mixing and adding juices and coloring ingredients at the bottling plant, which is a part of Mixing Division. The finished product is packaged in a company-produced glass bottle and packed in cases of 24 bottles each.

Because the appearance of the bottle heavily influences sales volume, Amazon developed a unique bottle production process at the company’s container plant, which is a part of Container Division. Mixing Division uses all of the container plant’s production. Each division (Mixing and Container) is considered a separate profit center and evaluated as such. As the new corporate controller, you are responsible for determining the proper transfer price to use for the bottles produced for Mixing Division.

At your request, Container Division’s general manager asked other bottle manufacturers to quote a price for the number and sizes demanded by Mixing Division. These competitive prices follow:

^a An equivalent case represents 24 bottles.

Container Division's cost analysis indicates that it can produce bottles at these costs:

These costs include fixed costs of $850,000 and variable costs of $4.50 per equivalent case. These data have caused considerable corporate discussion as to the proper price to use in the transfer of bottles from Container Division to Mixing Division. This interest is heightened because a significant portion of a division manager’s income is an incentive bonus based on profit center results.

Mixing Division has the following costs in addition to the bottle costs:

The corporate marketing group has furnished the following price–demand relationship for the finished product:

Required:

a. Amazon Beverages has used market price–based transfer prices in the past. Using the current market prices and costs and assuming a volume of 1.35 million cases (Enter your answers in thousands of dollars.)

a-1. Calculate operating profits for Container Division.

a-2. Calculate operating profits for Mixing Division.

a-3. Calculate operating profits for Amazon Beverages.

b-1. Calculate operating profits for Container for volumes of 450,000, 900,000 and 1,350,000cases. (Enter your answers in thousands of dollars.)

Which volume of production is the most profitable for Container?

b-2. Calculate operating profits for Mixing for volumes of 450,000, 900,000 and 1,350,000cases. (Enter your answers in thousands of dollars.)

Which volume of production is the most profitable for Container?

b-2. Calculate operating profits for Mixing for volumes of 450,000, 900,000 and 1,350,000cases. (Enter your answers in thousands of dollars.)

Which volume of production is the most profitable for Mixing?

b-3. Calculate operating profits for Amazon Beverages for volumes of 450,000, 900,000 and 1,350,000cases. (Enter your answers in thousands of dollars.)

Which volume of production is the most profitable for Amazon Beverages?

What sort of jobs can support a middle-class lifestyle in America today?

Which of the following is NOT one of the basic principles of social stratification?

The condition that sometimes develops in groups when no dissenting opinions are voiced, allowed or heard is called:

Amazon Beverages produces and bottles a line of soft drinks using exotic fruits from Latin America and Asia. The manufacturing process entails mixing and adding juices and coloring ingredients at the bottling plant, which is a part of Mixing Division. The finished product is packaged in a company-produced glass bottle and packed in cases of 24 bottles each.

Because the appearance of the bottle heavily influences sales volume, Amazon developed a unique bottle production process at the company’s container plant, which is a part of Container Division. Mixing Division uses all of the container plant’s production. Each division (Mixing and Container) is considered a separate profit center and evaluated as such. As the new corporate controller, you are responsible for determining the proper transfer price to use for the bottles produced for Mixing Division.

At your request, Container Division’s general manager asked other bottle manufacturers to quote a price for the number and sizes demanded by Mixing Division. These competitive prices follow:

^a An equivalent case represents 24 bottles.

Container Division's cost analysis indicates that it can produce bottles at these costs:

These costs include fixed costs of $810,000 and variable costs of $4.10 per equivalent case. These data have caused considerable corporate discussion as to the proper price to use in the transfer of bottles from Container Division to Mixing Division. This interest is heightened because a significant portion of a division manager’s income is an incentive bonus based on profit center results.

Mixing Division has the following costs in addition to the bottle costs:

The corporate marketing group has furnished the following price–demand relationship for the finished product:

Required:

a. Amazon Beverages has used market price–based transfer prices in the past. Using the current market prices and costs and assuming a volume of 1.23 million cases (Enter your answers in thousands of dollars.)

a-1. Calculate operating profits for Container Division.

a-2. Calculate operating profits for Mixing Division.

a-3. Calculate operating profits for Amazon Beverages.

b-1. Calculate operating profits for Container for volumes of 410,000, 820,000 and 1,230,000cases. (Enter your answers in thousands of dollars.)

Which volume of production is the most profitable for Container?

b-2. Calculate operating profits for Mixing for volumes of 410,000, 820,000 and 1,230,000cases. (Enter your answers in thousands of dollars.)

Which volume of production is the most profitable for Mixing?

b-3. Calculate operating profits for Amazon Beverages for volumes of 410,000, 820,000 and 1,230,000cases. (Enter your answers in thousands of dollars.)

Which volume of production is the most profitable for Amazon Beverages?