1. New England Co. had net cash provided by operating activities of $351,000; net cash used by investing activities of $420,000; and cash provided by financing activities of $250,000.

New England's cash balance was $27,000 on January 1.
What was New England's cash balance at the end of the year?

A. $40,000
B. $208,000
C. $248,000
D. $27,000

2. In a statement of cash flows, cash receipts from sales of inventory to customers should generally be classified as cash inflows from

A. investing activities
B.operating activities
C.financing activities
D.selling activities

3. Which of the following is a contra account?

A. Premium on bonds payable
B.Allowance for doubtful accounts
C.Patents
D.Unearned revenue

Questions 6, and 7 refer to the following information:

At the end of the year, a company offered to buy 4,740 units of a product from X Company for a special price of $11.00 each instead of the company's regular price of $18.00 each. The following information relates to the 65,000 units of the product that X Company made and sold to its regular customers during the year:

Fixed cost of goods sold for the year were $124,150, and fixed period costs were $68,250. Variable period costs include selling commissions equal to 3% of revenue.

6. Profit on the special order is

7. Assume the following two changes for the special order: 1) variable cost of goods sold will decrease by $0.73 per unit, and 2) there will be no selling commissions. What would be the effect of these two changes on the special order profit?

PLEASE ANSWER BOTH

#6 = NOT 20,856

#7 = NOT 5024

US Auto Company would like to offer rebates to its customers in order to increase sales. If it lowers prices sales will increase.    This will depend on the price elasticity of demand. Assume that the price elasticity of demand is 1.5. This firm is considering a $400 rebate on its cars. Also assume the following information on prices and costs before the rebates:

          Average price per car                                   $9,000 per car

          Expected sales volume at $9,000) per car     1,000,000 cars

          Average total costs per car                           $8,200 per car

          Total variable cost                                         $6,400,000,000

• Calculate the present total fixed costs, average variable costs and average fixed costs.
• What is the present breakeven point?
• What is the change in revenue resulting from the $400 price reduction?
• What is the effect on the cost per car after the change? In other words what is the average cost per car after the change?
• Should the change be made?

Please show the calculation. Thank you.

Goal:
Please answer the questions below. The main goal of this homework is to see if you can calculate the profit maximization point for this small wedding cake business. I hope that you will be able to merge your knowledge of basic accounting and microeconomic theory in order to calculate the profit maximization point, make comments about efficiency, and make logical recommendations to the firm's management to ensure their future success.

Current Situation:
The local wedding cake business was very competitive during 2012. Delicious Deserts was the only wedding cake bakery in the entire county of two million people for several years. They often charged as much as $300 to $500 for each wedding cake. But a new competitor recently came into the market and started selling "discount wedding cakes" for less than $150. The quality and the taste of the discount wedding cakes were acceptable for most of their customers. Both businesses operated in a low-to moderate-income county in California where the average household income was not much higher than $40,000 per year.

The Challenge For Delicious Deserts:
At first the news of a low-cost competitor was terrible news for Delicious Deserts. They had no choice. They had to charge from $300 to $500 per wedding cake to cover their high costs. However, because of this new competition, the husband and wife owners of Delicious Deserts decided to make the business more efficient and lower costs. They invested in better ovens and created better tasting cakes using special ingredients. Their customers went crazy over their new and unique 80 proof Italian Rum Wedding cake that actually got people slightly drunk if they ate more than three slices.

To boost sales during 2012 they hired part-time telemarketers and social media experts. They also increased their advertising in traditional media such as local wedding magazines. They also displayed eye-catching ads in local churches, entertainment centers and jewelry stores.

They also experimented with a new pricing model in which they lowered prices each quarter. Indeed, they found that as they lowered their prices, they sold more cakes. They hired an "A" student who took a microeconomics class with Professor Ed Torres to do an elasticity analysis. The student estimated that the price elasticity for wedding cakes was 1.25 (elastic) and that the income elasticity was 2.10 (a luxury good). The owners of Delicious Deserts were not aware of this information. The student told them that they made a huge pricing strategy error for many years by charging high prices on an elastic good within a low-to moderate-income county.

The profit and loss statement below shows that Delicious Deserts made a Total Revenue of $275,000 and sold 1,375 wedding cakes. During 2012, they made three times (3X) more than they did versus 2011. Of course, because they invested in new ovens, made more cakes, and hired new part-time staff, the cost of doing business also rose. The net profit for 2012 was a slim $32,175. The salary for a professional desert baker averaged $70,000 per year in California.

Please examine the profit and loss statement on the next page, then answer the questions on pages 4 through 6.  

Delicious Deserts, Incorporated
Income Statement For The Year Ending December 31, 2012

Revenues

Gross Sales....................................................................$275,000
Less: Sales Discounts ..................................................$ 2,500
Less: Returns (Cancelled Weddings)...........................$ 2,000
Net Sales...............................................................................................$270,500

Cost of Goods Sold

Beginning Inventory (January 1).................................$ 18,000
Cost Of Ingredients To Bake Cakes............................$109,500
Total Cost of Goods For Sale......................................$127,500
Less: Ending Inventory December 31.........................$ 15,000
Cost of Goods Sold..............................................................................$112,500

Gross Profit.....................................................................................................$158,000

Operating Expenses
Selling Expenses
Sales Commissions........................................$ 31,000
Advertising...................................................$ 16,000
Other Selling Expenses (Internet).................$ 18,000
Total Selling Expenses...............................................$ 65,000

General and Administrative Expenses
Professional & Office Salaries.................................$ 20,500
Utilities....................................................................$ 5,000
Office Supplies........................................................$ 1,500
Bank Interest Paid on Loans....................................$ 3,600
Insurance.................................................................$ 2,500
Rent (Fixed Cost)....................................................$ 17,000
Total General & Administrative Expense.............................$ 50,100
Total Operating Expenses..................................................$115,100

Net Profit Before Taxes..............................................................................$ 42,900
Less: Federal/State/Local Taxes................................................................$ 10,725
NET PROFIT.............................................................................................$ 32,175

   

Question #1:
What was the Total Fixed Cost of running this business?

Free Answer:
The rent was the only fixed cost that Delicious Deserts had. They paid $17,000 per year or $1,416.66 per month for rent. All other expenses were variable costs.

Question #2:
What was the Total Variable Cost of running this business?

Answer: $________________________________________

Clue:
Add up Cost of Goods Sold, Total Operating Expenses (less Rent), Income Tax Expense and include the write-off losses from Sales Discounts & Wedding Cancellations.


Question #3:
Assuming that Delicious Deserts sold 150 cakes during Q1, 300 cakes during Q2, 450 cakes during Q3, and 475 cakes during Q4, what was the Total Revenue during each quarter assuming the prices were: Q1 - $275 per cake, Q2 - $240 per cake, Q3 - $180 per cake and Q4 - $170 per cake?    

Q1 - Total Revenue = $____________________________

Q2 - Total Revenue = $____________________________

Q3 - Total Revenue = $____________________________

Q4 - Total Revenue = $____________________________

The "A" student did a quarterly cost breakdown analysis for Delicious Deserts. A month-to-month analysis would have been better, but the owners just wanted a quick quarterly analysis. Q1 = 150 cakes sold, Q2 = 300 cakes sold, Q3 = 450 cakes sold and Q4 = 475 sold.   

Challenge Question #4:
Hint: Use the instructions on page 7 of the Excel 2016 handout.

Can you plot a nice-looking graph to show how the demand curve, the average total cost, marginal cost, and marginal revenue curves look like? Paste it on this page or attach a separate page to this homework.   

Question #5
What is the MC=MR Profit Maximization point? What quantity should Delicious Deserts be producing at 'and' what price should they be charging to maximize their profits?

Question #6
Why isn't it a good idea for them to produce and sell as many cakes as they can? Is it more profitable to sell less cakes at this current stage of their business?

Question #7
Do you have any other recommendations for Delicious Deserts to increase their revenues, profits, market share, and client retention?

community psychologist selects a sample of 16 local police officers to test whether their physical endurance is better than the median score of 74. She measures their physical endurance on a 100-point physical endurance rating scale. Performance Scores 92 54 53 63 96 94 95 78 72 84 81 75 88 90 79 86 Based on the data given above, compute the one-sample sign test at a 0.05 level of significance. x =

Based on the following data for the current year, what is the number of days' sales in receivables? Assume 365-Day year.

Round your answer up to the nearest whole day.

a.31

b.74

c.67

d.140

One of the benefits of a linear regression model, is that it’s relatively easy to create a confidence interval on the mean response. Imagine you created a linear regression model from a dataset with n = 12, that applies over the range 0.0 ≤ x ≤ 10.0, where the mean value of x = 5.0 , the fitted model is Y = 74 + 15 x, Sxx = 0.75, and σ2. = 1.5 At what value of x does the minimum width of the 95% confidence interval on the mean response occur?

Two sections of a class in statistics were taught by two different methods. Students’ scores on a standardized test are shown in Table 5.12 . Do the results present evidence of a difference in the effectiveness of the two methods? (Use α = 0.05.)

Class A: 74, 97, 79, 88, 78, 93, 76, 75, 82, 86, 100, 94

Class B: 78, 92, 94, 78, 71, 85, 70, 79, 76, 93, 82, 69, 84

Include R code.

The sample data below are the typing speeds (in words per minute) and reading speeds (in words per minute) of nine randomly selected secretaries. Here, x denotes typing speed, and y denotes reading speed.
  

At the 10% significance level, predict the reading speed for a typing speed of 74 words per  
minute.