The following data gives the creatinine clearance Y (in $1000’s) of a sample of 33 male subjects along with their creatinine concentration (X1), age (X2) and the weight (X3). The data are:

1. Plot a scatter plot of Y against each predictor variable. What do the plots tell you about the nature of the relationship between y and each of the independent variables?
2. Obtain the correlation matrix of the X variables. Does the matrix indicate potential problems with multicollinearity?
3. Fit a regression model containing the independent variables as first order terms.
4. Obtain variance inflation factors for the model in (. Is multicollinearity a problem? Explain
5. Obtain residual plots as well as partial residual plots. Do these plots indicate that the regression model should be modified?
6. Theoretical considerations .suggest the model

E(ln(Y)) = b₀+ b₁ln(X₁)+ b₂ln(140-X₂)+b₃ln(X₃).

Fit the theoretical model and examine all the relevant model diagnostics. Do any of the problems encountered with the model in (d) (if there were any problem encountered) seem to have been resolved?

In this assignment, you will use a simple version of a portfolio where your money is distributed across three categories: stocks, bonds, and cash. Refer to this module’s readings to review historical return values.

Your portfolio will be diversified across these three different types of investments. The amount that you decide to put into each will greatly depend upon what stage of life you are in. If you are young and just starting out in your career, you may want to have a high-risk portfolio with the hope of high returns in the distant future. However, if you are near the end of your career, you may want to choose a less risky portfolio.

Create your own portfolio that addresses the following:

After retirement, how much will you like to have annually in order to maintain the standard of living that you expect to have?

How much annually do you plan to set aside for your retirement plan?

How much of this annual contribution will you want to invest in each of the investment categories?

How many years will you work from now until you retire?

Click here to download the retirement Excel spreadsheet you will need for this assignment.

Put the values that you decided on above into the retirement spreadsheet.

Respond to the following

What is your retirement goal? Can you realistically reach the goal that you have set? How long will it take to achieve this retirement goal?

How much money will you need to save in order to achieve your retirement goal?

This assignment assumes that the interest rates will remain constant for the entire life of the retirement plan. Is this a realistic situation?

Are you planning to have a high-risk or a low-risk portfolio? Explain.

What other factors related to contributing to the typical retirement plan must you consider when managing your portfolio?

What impact will inflation have on your calculations?

Subway, the fast food restaurant franchise, announced in early 2018 it planned to bring back the “$5 Footlong” promotion. Hundreds of Subway franchise owners protested the promotion saying that they cannot afford to sell the footlong sub sandwiches for $5. You'll want to review the Subway webpage featured in the Chapter 8 module.

Assume that the costs related to a Subway footlong and a Subway franchise include the following

NOTE: Assume all subs are paid for with a credit card

Discussion Questions:

Question #1:  Bob owns a subway franchise and he is furious at the thought of offering $5.00 footlongs. His comment was “they cost us $5.41 each so we will be upside down on each sub sold. I’ll lose my shirt!”. Do you agree or disagree with Bob that this idea should be immediately rejected without any further analysis? If you don’t agree with Bob, why do you think further analysis is required?  

Question #2: What are the relevant and irrelevant costs in this pricing decision? (hint: there are 6 relevant costs)

Question #3: Can you think of any other reasons/factors besides the costs listed above that might be relevant to the pricing decision to offer the $5.00 footlongs? Use your imagination

"Wonderful! Not only did our salespeople do a good job in meeting the sales budget this year, but our production people did a good job in controlling costs as well,” said Kim Clark, president of Martell Company. “Our $26,050 overall manufacturing cost variance is only 1.0% of the $2,605,000 standard cost of products made during the year. That's well within the 3% parameter set by management for acceptable variances. It looks like everyone will be in line for a bonus this year."

The company produces and sells a single product. The standard cost card for the product follows:

The following additional information is available for the year just completed:

1. The company manufactured 30,000 units of product during the year.
2. A total of 133,000 feet of material was purchased during the year at a cost of $3.95 per foot. All of this material was used to manufacture the 30,000 units produced. There were no beginning or ending inventories for the year.
3. The company worked 70,000 direct labor-hours during the year at a direct labor cost of $12.70 per hour.
4. Overhead is applied to products on the basis of standard direct labor-hours. Data relating to manufacturing overhead costs follow:

Required:

1. Compute the materials price and quantity variances for the year.

2. Compute the labor rate and efficiency variances for the year.

3. For manufacturing overhead compute:

a. The variable overhead rate and efficiency variances for the year.

b. The fixed overhead budget and volume variances for the year.

(For all requirements, indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)

Marine, Inc., manufactures a product that is available in both a flexible and a rigid model. The company has made the rigid model for years; the flexible model was introduced several years ago to tap a new segment of the market. Since introduction of the flexible model, the company’s profits have steadily declined, and management has become concerned about the accuracy of its costing system. Sales of the flexible model have been increasing rapidly.

Overhead is applied to products on the basis of direct labor-hours. At the beginning of the current year, management estimated that $600,000 in overhead costs would be incurred and the company would produce and sell 1,000 units of the flexible model and 10,000 units of the regular model. The flexible model requires 2.0 hours of direct labor time per unit, and the regular model requires 1.0 hours. Direct materials and labor costs per unit are given below:

Required:   

1-a. Compute the predetermined overhead rate using direct labor-hours as the basis for allocating overhead costs to products.

1-b. Compute the unit product cost for one unit of each model.

2. An intern suggested that the company use activity-based costing to cost its products. A team was formed to investigate this idea. It came back with the recommendation that four activity cost pools be used. These cost pools and their associated activities are listed as follows:

Compute the activity rate for each of the activity cost pools.     

3-a. Using activity-based costing, determine the total amount of overhead that would be assigned to each model for the year.

3-b. Using activity-based costing, compute the unit product cost for one unit of each model.

How would you interpret the below financials?

XYZ Company has the following data from its costing system regarding its two product lines, A1 and B1:

Using a traditional system, the company would apply manufacturing overhead to the units based on direct labor-hours for the upcoming period as follows:

Using an activity-based costing system, the company would assign manufacturing overhead to the following four activity cost pools. The "Other" cost pool includes organization-sustaining costs and idle capacity costs.

1. (8 points) Compute Product Margins for the A1 and B1 products using the traditional costing system (present your margins in an income statement format similar to Exhibit 6-13 in the textbook).

2. (12 points) Compute Product Margins for the A1 and B1 products using the activity-based costing system (present your margins in an income statement format similar to Exhibit 6-11 in the textbook).

3. (4 points) Based on your analysis above, estimate how much manufacturing overhead was allocated under the traditional costing system to (i) batch setups, and (ii) product sustaining activities for A1 and B1.

Please provide your answers to the questions above on an Excel spreadsheet or Word document and upload using the upload controls.

The following trial balance was taken from the books of Coyote Company as of December 31, 2019.

            Account                                                    Debit             Credit

Cash                                                                  $60,000

Accounts receivable                                            50,000

Allowance for doubtful accounts                                               $ 1,000

Short-Term notes receivable                                 20,000

Inventory, January 1, 2019                                   70,000

Furniture and equipment                                      210,000

Accumulated depreciation of F & E                                           40,000

Patents                                                               100,000

Accounts payable                                                                        22,000

Bonds payable                                                                        20,000

L-T notes payable                                                                   15,000

Common stock                                                                          290,000

Retained earnings                                                                       87,000

Dividends                                                           20,000

Prior period adjustments                                     10,000

Sales                                                                                          700,000

Sales returns & allowance                                    40,000

Sales discount                                                      10,000

Rent revenues                                                                            60,000

Interest revenues                                                                        10,000

Purchase                                                            420,000

Purchase returns & allowance                                                     20,000

Selling expenses                                                60,000

Advertising expense                                           30,000

Supplies expense                                                 6,000

Insurance expense                                              24,000

Wage and Salary expense                                    90,000

Rent expense                                                         60,000

Loss on sale of PS store before tax                     10,000

Operating income from PS store before tax                             25,000

Totals                                                                1,290,000        1,290,000

At the year-end, the following items have not been recorded.

1. Insurance premium expired during the year, $14,000.
2. Estimated bad debts expense, 1.0% of net sales.
3. Inventory as of 12/31/2019 turned out to be $50,000.
4. Office supplies were purchased for $6,000 and charged to supplies expenses then. There are $2,000 of supplies remaining as of 12/31/2019
5. Six months’ rent of $60,000 was paid in advance on September 1, 2019, and charged to rent expense then.
6. Furniture and equipment have an average useful life of 5 years and a salvage value of $10,000. Coyote Company uses the straight-line method of depreciation.
7. Patents have been amortized by $10,000/year.
8. The utility bill of $2,000 for the month of December 2019 will be paid on its due date, January 10, 2020.
9. Salaries earned but not yet paid by December 31, 2019, $8,000.
10. The tax rate is 30%.

Instructions: Prepare the following:

1. Any necessary adjusting entries at the end of 2019.
2. Income Statement and statement of retained earnings, and balance sheet of the company for the year 2019 in good forms (i.e. multiple-steps statements)
3. Any necessary closing entries at the end of 2019.

A group is considering installing a solar power station and has asked you for your recommendation for a photovoltaic system or a solar thermal system. At this stage you are asked not to include cost factors. The single point design condition they have given you is for an incident solar radiation on the collector of 550 W/m2, a surrounding temperature of 18 C. The dead state for this problem should be taken as To = 291 K, Po = 1 bar. You can perform your analysis at steady state conditions. In addition to determining the power output and first law efficiency of the options, you have been requested to determine the exergy destroyed for each of them. The photovoltaic system has an efficiency of 0.15 defined as the power output/incident solar radiation. The basic photovoltaic collector is 1.1 m2 and losses heat from both the front and back surface. The edge area can be neglected. The convective heat transfer coefficient is 10 W/m2 K. The inverter and signal conditioning device used to connect the photovoltaic collector to the grid and household has an efficiency of 0.87. The inverter operates isothermally. The solar thermal collector will heat the working fluid from a temperature of 32 C and has a concentration factor of 10,000. The concentration factor is the ratio of the incident solar radiation on the heat transfer surface to the incident solar radiation area. It is a concentrating collector with an opening of 1.1 m2 and a heat transfer area of 0.05 m2. The mass flow rate of the working fluid through the system is 0.009 Kg/s. The heat transfer area is not equal to the area of absorption. The convective heat transfer coefficient is 1.0 W/m2 K. The heat transfer from the collector can be considered to be at the average temperature of the working fluid, (Tin + Tout)/2. The specific heat of the working fluid is 678 J/(Kg K). The useful energy from this collector system is the change in the enthalpy of the flow through the system. The working fluid enters a heat engine with an efficiency of 0.30 that is connected to a generator with an efficiency of 0.90. The generator operates isothermally.

Answer the following:

a) Determine the power output for each type of system for a basic collector area.

b) Determine the exergy destroyed for each type of system.

c) Which system would you recommend on this analysis? This question neglects the costs.