Miller Toy Company manufactures a plastic swimming pool at its Westwood Plant. The plant has been experiencing problems as shown by its June contribution format income statement below:

*Contains direct materials, direct labor, and variable manufacturing overhead.

Janet Dunn, who has just been appointed general manager of the Westwood Plant, has been given instructions to “get things under control.” Upon reviewing the plant’s income statement, Ms. Dunn has concluded that the major problem lies in the variable cost of goods sold. She has been provided with the following standard cost per swimming pool:

*Based on machine-hours.

During June the plant produced 7,000 pools and incurred the following costs:

1. Purchased 29,500 pounds of materials at a cost of $2.55 per pound.

2. Used 24,300 pounds of materials in production. (Finished goods and work in process inventories are insignificant and can be ignored.)

3. Worked 3,400 direct labor-hours at a cost of $7.30 per hour.

4. Incurred variable manufacturing overhead cost totaling $8,400 for the month. A total of 2,400 machine-hours was recorded.

It is the company’s policy to close all variances to cost of goods sold on a monthly basis.

Required:

1. Compute the following variances for June:

a. Materials price and quantity variances.

b. Labor rate and efficiency variances.

c. Variable overhead rate and efficiency variances.

2. Summarize the variances that you computed in (1) above by showing the net overall favorable or unfavorable variance for the month.

A company which manufactures compact discs has found that demand for its product has been increasing rapidly over the last 12 months. A decision now has to be made as to how production capacity can be expanded to meet this demand. Three alternatives are available: (i) Expand the existing plant; (ii) Build a new plant in an industrial development area; (iii) Subcontract the extra work to another manufacturer. The returns which would be generated by each alternative over the next 5 years have been estimated using three possible scenarios: (i) Demand rising at a faster rate than the current rate; (ii) Demand continuing to rise at the current rate; (iii) Demand increasing at a slower rate or falling. These estimated returns, which are expressed in terms of net present value, are shown below (net present values in $000s): Scenario Course of action Demand rising faster Demand rising at current rate Demand increasing slowly or is falling Expand 500 400 ?150 Build new plant 700 200 ?300 Subcontract 200 150 ?50 Exercises 239 (a) The company’s marketing manager estimates that there is a 60% chance that demand will rise faster than the current rate, a 30% chance that it will continue to rise at the current rate and a 10% chance that it will increase at a slower rate or fall. Assuming that the company’s objective is to maximize expected net present value, determine (i) The course of action which it should take; (ii) The expected value of perfect information. (b) Before the decision is made, the results of a long-term forecast become available. These suggest that demand will continue to rise at the present rate. Estimates of the reliability of this forecast are given below: p(forecast predicts demand increasing at current rate when actual demand will rise at a faster rate) = 0.3 p(forecast predicts demand increasing at current rate when actual demand will continue to rise at the current rate) = 0.7 p(forecast predicts demand increasing at current rate when actual demand will rise at a slower rate or fall) = 0.4 Determine whether the company should, in the light of the forecast, change from the decision you advised in (a). (c) Discuss the limitations of the analysis you have applied above and suggest ways in which these limitations could be overcome.

You are testing a treatment for a new virus. Effectiveness is judged by the percent reduction in symptoms after two weeks.It is known that if left untreated, symptoms will reduce on their own by 0.185 (18.5%) with a standard deviation of 0.123. Three trials were run simultaneously.Trial 1 involved giving the participants a sugar pill. Patients in Trial 2 were given Agent A. Patients in Trial 3 were given Agent B. Results showing the amount of symptom reduction for the various trials are summarized in the table to the left. Note that this is NOT a paired t-test.Patient 1 just means the first patient to be given the treatment in each trial. Patient 1 is a different person in each trial.

1) At the 80%, 90% and 95% confidence levels (alpha = 0.2, 0.1 and 0.05) compare Agent A, Agent B and the Sugar Pill results to the population symptom reduction. Use a one-tail hypothesis test.

Miller Toy Company manufactures a plastic swimming pool at its Westwood Plant. The plant has been experiencing problems as shown by its June contribution format income statement below:

*Contains direct materials, direct labor, and variable manufacturing overhead.

Janet Dunn, who has just been appointed general manager of the Westwood Plant, has been given instructions to “get things under control.” Upon reviewing the plant’s income statement, Ms. Dunn has concluded that the major problem lies in the variable cost of goods sold. She has been provided with the following standard cost per swimming pool:

*Based on machine-hours.

During June, the plant produced 7,000 pools and incurred the following costs:

Purchased 29,500 pounds of materials at a cost of $2.55 per pound.

Used 24,300 pounds of materials in production. (Finished goods and work in process inventories are insignificant and can be ignored.)

Worked 3,400 direct labor-hours at a cost of $7.30 per hour.

Incurred variable manufacturing overhead cost totaling $8,400 for the month. A total of 2,400 machine-hours was recorded.

It is the company’s policy to close all variances to cost of goods sold on a monthly basis.

Required:

1. Compute the following variances for June:

a. Materials price and quantity variances.

b. Labor rate and efficiency variances.

c. Variable overhead rate and efficiency variances.

2. Summarize the variances that you computed in (1) above by showing the net overall favorable or unfavorable variance for the month.

Flexible Budgeting and Variance Analysis

I Love My Chocolate Company makes dark chocolate and light chocolate. Both products require cocoa and sugar. The following planning information has been made available:

I Love My Chocolate Company does not expect there to be any beginning or ending inventories of cocoa or sugar. At the end of the budget year, I Love My Chocolate Company had the following actual results:

Required:

1. Prepare the following variance analyses for both chocolates and the total, based on the actual results and production levels at the end of the budget year:

     a. Direct materials price variance, direct materials quantity variance, and total variance.

     b. Direct labor rate variance, direct labor time variance, and total variance.

Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. If there is no variance, enter a zero.

2. The variance analyses should be based on the amounts at volumes. The budget must flex with the volume changes. If the volume is different from the planned volume, as it was in this case, then the budget used for performance evaluation should reflect the change in direct materials and direct labor that will be required for the production. In this way, spending from volume changes can be separated from efficiency and price variances.

Flexible Budgeting and Variance Analysis

I Love My Chocolate Company makes dark chocolate and light chocolate. Both products require cocoa and sugar. The following planning information has been made available:

I Love My Chocolate Company does not expect there to be any beginning or ending inventories of cocoa or sugar. At the end of the budget year, I Love My Chocolate Company had the following actual results:

Required:

1. Prepare the following variance analyses for both chocolates and the total, based on the actual results and production levels at the end of the budget year:

     a. Direct materials price variance, direct materials quantity variance, and total variance.

     b. Direct labor rate variance, direct labor time variance, and total variance.

Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. If there is no variance, enter a zero.

2. The variance analyses should be based on the amounts at volumes. The budget must flex with the volume changes. If the volume is different from the planned volume, as it was in this case, then the budget used for performance evaluation should reflect the change in direct materials and direct labor that will be required for the production. In this way, spending from volume changes can be separated from efficiency and price variances.

Flexible Budgeting and Variance Analysis

I Love My Chocolate Company makes dark chocolate and light chocolate. Both products require cocoa and sugar. The following planning information has been made available:

I Love My Chocolate Company does not expect there to be any beginning or ending inventories of cocoa or sugar. At the end of the budget year, I Love My Chocolate Company had the following actual results:

Required:

1. Prepare the following variance analyses for both chocolates and the total, based on the actual results and production levels at the end of the budget year:

     a. Direct materials price variance, direct materials quantity variance, and total variance.

     b. Direct labor rate variance, direct labor time variance, and total variance.

Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. If there is no variance, enter a zero.

2. The variance analyses should be based on the standard amounts at actual volumes. The budget must flex with the volume changes. If the actual volume is different from the planned volume, as it was in this case, then the budget used for performance evaluation should reflect the change in direct materials and direct labor that will be required for the actual production. In this way, spending from volume changes can be separated from efficiency and price variances.

Miller Toy Company manufactures a plastic swimming pool at its Westwood Plant. The plant has been experiencing problems as shown by its June contribution format income statement below: Flexible Budget Actual Sales (8,000 pools) $ 265,000 $ 265,000 Variable expenses: Variable cost of goods sold* 88,960 106,490 Variable selling expenses 16,000 16,000 Total variable expenses 104,960 122,490 Contribution margin 160,040 142,510 Fixed expenses: Manufacturing overhead 65,000 65,000 Selling and administrative 80,000 80,000 Total fixed expenses 145,000 145,000 Net operating income (loss) $ 15,040 $ (2,490 ) *Contains direct materials, direct labor, and variable manufacturing overhead. Janet Dunn, who has just been appointed general manager of the Westwood Plant, has been given instructions to “get things under control.” Upon reviewing the plant’s income statement, Ms. Dunn has concluded that the major problem lies in the variable cost of goods sold. She has been provided with the following standard cost per swimming pool: Standard Quantity or Hours Standard Price or Rate Standard Cost Direct materials 3.0 pounds $ 2.50 per pound $ 7.50 Direct labor 0.4 hours $ 7.10 per hour 2.84 Variable manufacturing overhead 0.3 hours* $ 2.60 per hour 0.78 Total standard cost per unit $ 11.12 *Based on machine-hours. During June, the plant produced 8,000 pools and incurred the following costs: Purchased 29,000 pounds of materials at a cost of $2.95 per pound. Used 23,800 pounds of materials in production. (Finished goods and work in process inventories are insignificant and can be ignored.) Worked 3,800 direct labor-hours at a cost of $6.80 per hour. Incurred variable manufacturing overhead cost totaling $8,100 for the month. A total of 2,700 machine-hours was recorded. It is the company’s policy to close all variances to cost of goods sold on a monthly basis. Required: 1. Compute the following variances for June: a. Materials price and quantity variances. b. Labor rate and efficiency variances. c. Variable overhead rate and efficiency variances. 2. Summarize the variances that you computed in (1) above by showing the net overall favorable or unfavorable variance for the month.

When survey data indicated that a company needed to improve its​ package-sealing process, an experiment was conducted to determine the factors in the​ bag-sealing equipment that might be affecting the ease of opening the bags without tearing the inner liner of the bag. Data were collected on 19 bags and the plate gap on the​ bag-sealing equipment was used to predict the tear rating of a bag. The results are displayed in the accompanying table and the regression equation is the following. Complete parts​ (a) through​ (c).

ModifyingAbove Upper Y with caret Subscript iYi=0.75380.7538+0.5302Xi​,

with Summation from i equals 1 to n∑i=1nYi=14.6414.64​,

Summation from i equals 1 to n∑i=1nUpper Y Subscript i Superscript 2Y2i=38.6848​,

and Summation from i equals 1 to n∑i=1nXiYi=19.73.

Bag   Plate gap (X)  Tear rating (Y)
1   -0.3   0.03
2   -0.30   0.06
3   1.50   0.41
4   1.50   0.82
5   -0.30   0.36
6   0.00   0.37
7   0.30   0.75
8   0.00   1.98
9   0.00   0.24
10   -1.80   0.17
11   -1.80   0.13
12   2.40   3.72
13   -1.80   0.03
14   0.00   0.52
15   -2.70   0.01
16   -1.80   0.13
17   1.80   0.44
18   2.10   4.06
19   0.30   0.07

a. Determine the coefficient of​ determination, r2​, and interpret its meaning. (Fill in the Blank)

r2 = ___? ​(Round to four decimal places as​ needed.)

What is the meaning of the coefficient of​ determination? (Choose Below)

A. It measures the variability in the actual plate gap from the predicted plate gap.

B. It measures the variability in the actual tear rating from the predicted tear rating.

C. It is the proportion of the variation in the plate gap that is explained by the variability in the tear rating.

D. It is the proportion of the variation in the tear rating that is explained by the variability in the plate gap.

b. Determine the standard error of the estimate.

SYX = ___? ​(Round to four decimal places as​ needed.)

c. How useful do you think this regression model is for predicting the tear rating based on the plate gap in the​ bag-sealing equipment? (Choose Below)

Since the value of r2 is (fairly close to 0, fairly close to 1, fairly close to 0.5, equal to 1, equal to 0) and the value of SYX is (relatively large, relatively small) the regression model is (not very useful, fairly useful) for predicting the tear rating.

The accompanying data set provides the closing prices for four stocks and the stock exchange over 12 days:

With the help of the Excel Exponential Smoothing tool, I was able to forecast each of the stock prices using simple exponential smoothing with a smoothing constant of 0.3 (ie, damping factor of 0.7).

I was also able to calculate the Mean Absolute Deviation (MAD) of each of the stocks: MAD of Stock A = 1.32 MAD of Stock B = 0.37 MAD of Stock C = 0.41 MAD of Stock D = 0.26 MAD of Stock Exchange = 83.85.

The Mean Square Error (MSE) of the stocks: MSE of Stock A = 2.22, MSE of Stock B = 0.17, MSE of Stock C = 0.21, MSE of Stock D = 0.08, MSE of Stock Exchange = 7963.44.

Help me to understand the concept of Mean Absolute Percentage Error (MAPE). I realize that MAPE is the average of absolute errors divided by actual observation values. I'm wondering if this is just the MAD divided by the total observation values for a particular stock. For example, for Stock A, If my understanding is correct (which I don't think it is), the MAPE of Stock A would be 1.32 / each of the observation values individually. Or, would it be [(127.15 - 127.37) / 127.15]. Or, do I need to add up all the absolute errors for Stock A and all the actual observation values for Stock A and divide the former by the latter and then multiply by 100. As you can see, I'm confused. Please help.