COLORADO CORPORATION

On October 27, 2011, a freak snowstorm destroyed the work-in-process of the company, who promptly filed a claim with their insurance company for the lost work-in-process inventory, and raw materials inventory which were in the factory. Luckily, the finished goods are kept at a separate warehouse location, which was not damaged by the storm. As is normal, they put in a claim for lost profits as a result of the damage.

You have been sent to the scene on behalf of the insurance company to audit the claim being made by company. The company claims that the cost of work-in-process inventory destroyed by the storm was $50,000, and the cost of raw materials was $175,000.

From your conversations with factory personnel, you discover that the company was in process of manufacturing two custom jobs, Alpha and Gamma, both of which were started during 2011. Further discussion with the warehouse supervisor revealed that there was one job, Beta, complete and in the warehouse awaiting shipment at the time of the storm.

While the company’s onsite accounting records were destroyed, you were able to get the following information from off-site backup records, and through interviewing company personnel:

1. The company applies overhead at the rate of 85% of direct labor cost.
2. Cost of goods sold averages 75% of the company’s selling price.
3. Sales to date as of the date of the storm totaled $1,598,000.
4. The company pays its factory workers a rate of $12.90 per hour. A total of 25,760 direct labor hours were used during the year.
5. Raw materials purchased year to date totaled $843,276.
6. Total costs of job Beta amounted to $165,600.

Job cost records for Alpha and Gamma showed the following:

The December 31, 2010 financial statements showed the following inventory amounts:

Required:

1. Calculate the cost of goods sold for the year.
2. Calculate the cost of goods manufactured for the year.
3. Compute the amount of applied overhead for each job in the WIP inventory (round to the nearest dollar).
4. Evaluate the claim for damages submitted as follows:

1. Determine the cost of work in process destroyed by the snowstorm.
2. Determine the cost of raw materials destroyed by the snowstorm.

A)In our sample of 204 students, 27 have September birthdays. Calculate a 90% confidence interval for the proportion of 332 students that have a September birthday.

B) Interpret the interval from part b.

C) If the birth months are equally likely (ignoring the difference in the number of days), what proportion of births would be in September?

D) For various reasons, September is considered to be the most common birth month. Using your confidence interval from part A and response from part B, explain if there is evidence to support that the proportion of September birthdays is greater than we would expect by chance.

1) If n= 27, x bar=38, and s=10, find the margin of error at a 90% confidence level. Give your answer to two decimal places.

2) Express the confidence interval (14.4%, 24.2%) in the form of ˆp ± M E.

27. Suppose that Samantha purchases one pound of chicken, which is worth $5 to her, costs $4 to produce, and imposes $2 in environmental damages on people who live near the chicken farm. This purchase...

a) raises social welfare by $5.

b) raises social welfare by $3.

c) raises social welfare by $1.

d) reduces social welfare by $1.

e) reduces social welfare by $6.

market demand curve does not illustrate...

a. at what price consumers would purchase a given quantity of the good.

b. the quantity of the good that will be demanded at a particular price.

c. the price and quantity of the good that maximize the net benefits to society.

d. the marginal benefits of a good, measured in monetary units.

e. individuals’ willingness to pay for a good.

Suppose that an ice cream parlor raises the price of an ice cream cone from $3 to $4, and that the parlor sells five fewer cones each day. Which of the following statements is false?

a. The demand for ice cream cones is downward sloping.

b. Consumer surplus from ice cream cones has decreased.

c. Part of the area of consumer surplus becomes part of the area of producer surplus.

d. Some people’s willingness-to-pay for a cone is greater than $3 but less than $4.

e. Ice cream cones provide declining marginal benefits.

Which of the following statements is false in the welfare analysis model presented in Chapter 5?

a. The intersection of the supply and demand curves provides the price and quantity that can theoretically maximize the net benefits in a market.

b. The demand curve represents the marginal benefits of a good or service.

c. The net benefits in a market are equal to the sum of the consumer surplus and the producer surplus.

d. The net benefits in a market are equal to the total benefits minus the total costs.

e. Social welfare analysis focuses on the fairness of the distribution of benefits in a market.

Question 1

Paris planned to celebrate her birthday with a party on 27 November 2017. On 1 November, she agreed with the Sun Hotel to hire its ‘Orangery’ annexe for the party. The contract required the payment of $5,000 immediately, which Paris paid, and a further payment of $10,000 by 14 November. On 4 November, the Sun Hotel spent $2,000 relocating orange trees in preparation for the event. On 8 November, a colony of bats settled in the Orangery. The Sun Hotel rang the local authority to ask whether the bats could be removed. The local authority said that the bats could not be disturbed and that it would therefore be illegal to use the Orangery while the bats were in it. Paris was immediately notified but, despite her protests, was told that no refund could be made, as the contract had no provision for this eventuality.

Required a. Define what is meant by frustration of a contract.

b. Identify the types of frustrating event with reference to relevant legal cases.

c. Explain whether the contract between the Sun Hotel and Paris has been frustrated.

d. Explain whether Paris can recover any or all of the $5,000 payment made to the Sun Hotel and is liable to pay the further payment of $10,000.

A proton (mass m = 1.67 × 10-27 kg) is being accelerated along a straight line at 5.70 × 1012 m/s2 in a machine. If the proton has an initial speed of 5.30 × 104 m/s and travels 3.90 cm, what then is (a) its speed and (b) the increase in its kinetic energy

Consider a sample with data values of 27, 25, 20, 15, 30, 34, 28, and 25. Compute the 19th, 24th, 60th, and 70th percentiles.

If needed, round your answers to two decimal digits.

Percentile 19% 24% 60% 70%

Value for percentile?

A multiple choice test has 27 questions with four choices each. The examinee gets 3 for each right asnwer and -1 for each wrong answer. If the examinee decided to randonly choose all the asnwers, what is her expecteed score?

A) 0

B) 1

C) 9

D) -3

Given the sample data. x: 21, 17, 15, 30, 27 (a) Find the range. (Enter an exact number.)

(b) Verify that Σx = 110 and Σx2 = 2,584. (For each answer, enter an exact number.) Σx = Σx2 =

(c) Use the results of part (b) and appropriate computation formulas to compute the sample variance s2 and sample standard deviation s. (For each answer, enter a number. Round your answers to two decimal places.) s2 = s =

(d) Use the defining formulas to compute the sample variance s2 and sample standard deviation s. (For each answer, enter a number. Round your answers to two decimal places.) s2 = s = (e) Suppose the given data comprise the entire population of all x values. Compute the population variance σ2 and population standard deviation σ. (For each answer, enter a number. Round your answers to two decimal places.) σ2 = σ =

Consider a sample with data values of 27, 25, 20, 15, 30, 34, 28, and 25. Compute the 21st, 26th, 60th, and 70th percentiles. If needed, round your answers to two decimal digits.