The table below gives the list price and the number of bids received for five randomly selected items sold through online auctions. Using this data, consider the equation of the regression line, yˆ=b0+b1x, for predicting the number of bids an item will receive based on the list price. Keep in mind, the correlation coefficient may or may not be statistically significant for the data given. Remember, in practice, it would not be appropriate to use the regression line to make a prediction if the correlation coefficient is not statistically significant.

Step 1 of 6:

Find the estimated slope. Round your answer to three decimal places.

Step 2 of 6:

Find the estimated y-intercept. Round your answer to three decimal places.

Step 3 of 6:

Substitute the values you found in steps 1 and 2 into the equation for the regression line to find the estimated linear model. According to this model, if the value of the independent variable is increased by one unit, then find the change in the dependent variable yˆy^.

Step 4 of 6:

Determine if the statement "Not all points predicted by the linear model fall on the same line" is true or false.

Step 5 of 6:

Find the estimated value of y when x=177x=177. Round your answer to three decimal places.

Step 6 of 6:

Find the value of the coefficient of determination. Round your answer to three decimal places.

The following data show the brand, price ($), and the overall score for six stereo headphones that were tested by a certain magazine. The overall score is based on sound quality and effectiveness of ambient noise reduction. Scores range from 0 (lowest) to 100 (highest). The estimated regression equation for these data is  ŷ = 19.786 + 0.342x, where x = price ($) and y = overall score.

(a) Compute SST, SSR, and SSE. (Round your answers to three decimal places.)

SST=

SSR=

SSE=

(b) Compute the coefficient of determination r². (Round your answer to three decimal places.)

r² =

Comment on the goodness of fit. (For purposes of this exercise, consider a proportion large if it is at least 0.55.)

a) The least squares line did not provide a good fit as a large proportion of the variability in y has been explained by the least squares line.

b) The least squares line did not provide a good fit as a small proportion of the variability in y has been explained by the least squares line.   

c) The least squares line provided a good fit as a large proportion of the variability in y has been explained by the least squares line.

d) The least squares line provided a good fit as a small proportion of the variability in y has been explained by the least squares line.

(c) What is the value of the sample correlation coefficient? (Round your answer to three decimal places.)

As of January 1, 2017, Cheyenne Inc. adopted the retail method of accounting for its merchandise inventory.

To prepare the store’s financial statements at June 30, 2017, you obtain the following data.

Part 1

Correct answer iconYour answer is correct.

Compute Cheyenne’s June 30, 2017, inventory under the conventional retail method of accounting for inventories. (Round ratios for computational purposes to 0 decimal places, e.g. 78% and final answer to 0 decimal places, e.g. 28,987.)

$38,664 (I got correct, but not part 2)

Part 2

Incorrect answer iconYour answer is incorrect.

Without prejudice to your solution to part (a), assume that you computed the June 30, 2017, inventory to be $58,320 at retail and the ratio of cost to retail to be 70.64%. The general price level has increased from 100 at January 1, 2017, to 108 at June 30, 2017. Compute the June 30, 2017, inventory at the June 30 price level under the dollar-value LIFO retail method. (Round ratios for computational purposes to 2 decimal places, e.g. 78% and final answer to 0 decimal places, e.g. 28,987.)

The following data show the brand, price ($), and the overall score for six stereo headphones that were tested by a certain magazine. The overall score is based on sound quality and effectiveness of ambient noise reduction. Scores range from 0 (lowest) to 100 (highest). The estimated regression equation for these data is

ŷ = 21.258 + 0.327x,

where x = price ($)and y = overall score.

(a)

Compute SST (Total Sum of Squares), SSR (Regression Sum of Squares), and SSE (Error Sum of Squares). (Round your answers to three decimal places.)

SST=SSR=SSE=

(b)

Compute the coefficient of determination

r².

(Round your answer to three decimal places.)

r²

=

Comment on the goodness of fit. (For purposes of this exercise, consider a proportion large if it is at least 0.55.)

The least squares line provided a good fit as a large proportion of the variability in y has been explained by the least squares line.The least squares line did not provide a good fit as a small proportion of the variability in y has been explained by the least squares line.    The least squares line provided a good fit as a small proportion of the variability in y has been explained by the least squares line.The least squares line did not provide a good fit as a large proportion of the variability in y has been explained by the least squares line.

The following data show the brand, price ($), and the overall score for six stereo headphones that were tested by a certain magazine. The overall score is based on sound quality and effectiveness of ambient noise reduction. Scores range from 0 (lowest) to 100 (highest). The estimated regression equation for these data is

ŷ = 23.659 + 0.323x,

where x = price ($) and y = overall score.

(a)

Compute SST, SSR, and SSE. (Round your answers to three decimal places.)

SST = SSR = SSE =

(b)

Compute the coefficient of determination

r².

(Round your answer to three decimal places.)

r²

=

Comment on the goodness of fit. (For purposes of this exercise, consider a proportion large if it is at least 0.55.)

The least squares line provided a good fit as a small proportion of the variability in y has been explained by the least squares line.The least squares line provided a good fit as a large proportion of the variability in y has been explained by the least squares line.     The least squares line did not provide a good fit as a small proportion of the variability in y has been explained by the least squares line.The least squares line did not provide a good fit as a large proportion of the variability in y has been explained by the least squares line.

(c)

What is the value of the sample correlation coefficient? (Round your answer to three decimal places.)

Ennerdale Ltd has been asked to quote a price for a one-off contract. The company's management accountant has asked for your advice on the relevant costs for the contract. The following information is available:

Materials

The contract requires 3,000 kg of material K, which is a material used regularly by the company in other production. The company has 2,000 kg of material K currently in stock which has been purchased last month for a total cost of $19,600. Since then the price per kilogram for material K has increased by 5%.

The contract also requires 200 kg of material L. There are 250 kg of material L in stock which are not required for normal production. This material originally cost a total of $3,125. If not used on this contract, the stock of material L would be sold for $11 per kg.

Labour

The contract requires 800 hours of skilled labour. Skilled labour is paid $9.50 per hour. There is a shortage of skilled labour and all the available skilled labour is fully employed in the company in the manufacture of product P. The following information relates to product P:

Required:

(a) Prepare calculations showing the total relevant costs for making a decision about the contract in respect of the following cost elements:

(i) materials K and L; and

(ii) Skilled labous

(b) Explain how you would decide which over head costs would be relevant in the financial appraisal of the contract.

INSTRUCTIONS: Complete the statement in proper form. Revenue will be provided in an announcement at the end of Module 4 (based on actual number of services for your pricing levels). Additional information necessary to complete the income statement: General and Administrative Salaries paid = $1,200 Advertising = $100 Cleaning Products = $120 Depreciation = $83 Rent = $650 Loan = $420 Utilities and Insurance = $600 Quintinn's Furry Beasts Pet Co. Income Statement For the Month Ended January 31, xxxx Revenue: Grooming $- Day Care - Boarding - Total Revenue $- Cost of Goods Sold * - Gross Profit $- Expenses: G&A Salaries $- Advertising - Cleaning Products - Depreciation - Rent - Loan - Utilities and Insurance - Total Expenses $- Net Income / Loss $- * Cost of Goods Sold = Cost of Services (COS) There is no finished goods inventory to maintain. Quintinn's Furry Beasts Pet Co. Statement of Cost of Services For the Month Ended January 31, xxxx Beginning Work-in-Process Inventory $- Direct Materials: Materials - Beginning $- Add: Purchases for month of January 5,000 Materials Available for Use $5,000.00 Deduct: Ending Materials 3,000 Materials Used $2,000.00 Direct Labor 6,240 Factory Overhead 2,800 Total Manufacturing Overhead $11,040.00 Deduct: Ending Work-in-Process Inventory - Cost of Services $11,040 Grooming price $25 4 grooms per day Kennel price $25 12 dogs per day Daycare price $18 22 dogs per day

​(Individual or component costs of capital​) Compute the cost of the​ following:

a. A bond that has ​$1,000 par value​ (face value) and a contract or coupon interest rate of 8 percent. A new issue would have a floatation cost of 8 percent of the ​$1,140 market value. The bonds mature in 11 years. The​ firm's average tax rate is 30 percent and its marginal tax rate is 36 percent.

b. A new common stock issue that paid a ​$1.60 dividend last year. The par value of the stock is​ $15, and earnings per share have grown at a rate of 12 percent per year. This growth rate is expected to continue into the foreseeable future. The company maintains a constant​ dividend-earnings ratio of 30 percent. The price of this stock is now ​$23​, but 7 percent flotation costs are anticipated.

c. Internal common equity when the current market price of the common stock is ​$43. The expected dividend this coming year should be ​$3.00​, increasing thereafter at an annual growth rate of 9 percent. The​ corporation's tax rate is 36 percent.

d. A preferred stock paying a dividend of 9 percent on a ​$100 par value. If a new issue is​ offered, flotation costs will be 13 percent of the current price of ​$169.

e. A bond selling to yield 9 percent after flotation​ costs, but before adjusting for the marginal corporate tax rate of 36 percent. In other​ words, 9 percent is the rate that equates the net proceeds from the bond with the present value of the future cash flows​ (principal and​ interest).

The shareholders’ equity section of Superior Corporation’s balance sheet as of December 31, 2015, is as follows: Shareholders’ Equity Preferred stock, $100 par value; authorized, 300,000 shares; issued, 33,000 shares $3,300,000 Common stock, $5 par value; authorized, 2,000,000 shares; issued, 377,000 shares 1,885,000 Paid-in capital in excess of par—preferred 96,000 Paid-in capital in excess of par—common 825,000 Retained earnings 2,920,000 $9,026,000 The following events occurred during 2016: Jan. 5 10,500 shares of authorized and unissued common stock were sold for $7 per share. 16 10,000 shares of authorized and unissued preferred stock were sold for $108 per share. Apr. 1 79,000 shares of common stock were repurchased for the treasury at a price of $21 per share. Superior uses the cost method to account for treasury stock. Sept. 1 3,500 shares of preferred stock are issued in exchange for a piece of land. The land has an appraised value of $389,500. The preferred stock currently trades on the New York Stock Exchange at a price of $109 per share. Dec. 1 24,000 shares of treasury stock are reissued at a price of $24 per share.

Required: 1. Prepare journal entries for each of the above transactions.

2. Calculate the number of authorized, issued, and outstanding common shares as of December 31, 2016.

3. Calculate Superior’s legal capital at December 31, 2016.

Exercise 1. Firm Supply in the Short Run

Consider a firm with the following production function: y=L^½K^½. The cost function is C=w∙L+r∙K.

1. In the short-run the input K is given at K=100. What is the short-run production function y(L)?

2. Let w=0.1 and r=1. What is the cost function C(y)? Using the expression y(L) you found in part a, transform it into L(y) and plug it into the cost function C(L) to get C(y). Was a minimization necessary? Why or why not?

3. Given C(y) you find in part b, find AC(y) and MC(y). What is the firm’s short-run supply function S(p)?

4. At what level of y is the average cost minimized?

5. When the market price is p=0.2, how much does the firm supply? Find S(0.2). What is the firm’s profit? What is the firm’s producer surplus? How many workers does the firm employ? Find L.

6. When the market price is p=0.1, how much does the firm supply? Find S(0.1). What is the firm’s profit? What is the firm’s producer surplus? How many workers does the firm emply? Find L.

7. When the market price is p=0.3, how much does the firm supply? Find S(0.1). What is the firm’s profit? What is the firm’s producer surplus? How many workers does the firm emply? Find L.