Do people eat more of a snack food when the food is labeled as
low-fat? Do people pay attention to serving size? The answer may
depend on whether the snack food is labelled low-fat and whether
the label includes serving-size information. A study investigated
these two questions using staff, grad students, and undergrad
students at a large university as subjects.
Subjects were asked to evaluate a pilot episode for an upcoming TV
show at a theater on campus and were given a bag of granola from a
respected campus restaurant. They were told to enjoy as much or as
little of the granola as they wanted. Each granola bag had two
labels: Twenty subjects were assigned to each treatment, and their
granola bags were weighed at the end of the session to determine
how much granola was eaten.
| Lable1: type | Lable2: serving size |
| "Regular Rocky Mountain Granola" | "Contains 1 Serving" |
| "Low-Fat Rocky Mountain Granola" | "Contains 2 Serving" |
| no serving-size information | |
a) Is the study an observational study or an experiment? Specifically in this study (do not give general definitions),
what are the b) experimental units (abbreviated EU, also called individuals or subjects)
c) response variable and whether it is quantitative or categorical
d) How many factors were there and what were they?
e) How many treatments were there and what were they?
f) How many experimental units were in the study?
In: Statistics and Probability
Microeconomics
Marginal Productivity and the Law of Diminishing Marginal Returns
You have recently been hired to manage a movie theater. You observe that there are many customers waiting around the concession area to buy snacks. You also observe that there is only one clerk working the counter. This employee has to do everything from get the popcorn going, stocking condiments and supplies, changing the soda canister when the syrup runs out for fountain drinks, helping customers, fill orders, collect cash, and of course, smile at the customers who have waited lengthy periods of time.
You obtain a report that shows the average sales per weekend night are $500 with one clerk. You decide to hire another clerk for the shift and sales increase to $1,000. You add one more clerk, and sales increase to $1,700. Again, you add another clerk, and sales increase to $1,900. Finally you add one more clerk, and sales increase to $2,000.
1. Calculate the marginal product associated with each clerk. Draw a table to do this.
2. At what point did the law of diminishing marginal return become evident?
3. Why did the marginal product increase as more clerks were added initially?
4. Why did the marginal product start to diminish?
In: Economics
Consider a monopolist that operates on two. The total demand on the first market is D1(p1) = 80 − p1. The total demand on the second market is D2(p2) = 40 − p2. Let the cost function be C(q) = 20q.
(a) Suppose the monopolist cannot price discriminate , i.e., it faces a single demand D(p) = D1(p) + D2(p). Find the optimal price and quantity on each market, total monopoly profit, consumer surplus, and total surplus.
(b) Suppose the monopolist can charge a different price on each of the two mar- kets. Find the optimal price and quantity on each market, total monopoly profit, consumer surplus, and total surplus.
(c) Suppose that the monopolist can separate the markets and practice perfectprice discrimination within each market. Find the quantity traded on each market, total monopoly profit, consumer surplus, and total surplus.
In: Economics
Job Costing I Monticello Company uses a perpetual inventory system and has a highly labour intensive production process, so it assigns manufacturing overhead based on direct labour cost. Monticello’s predetermined overhead application rate for 2017 was computed from the following data: Total estimated factory overhead $1,232,500 Total estimated direct labour cost $850,000 The following activities took place in the work in process inventory during June: WIP Inventory A/C June 1 Bal. 25,625 Direct Materials Used 127,400 Other transactions incurred: Indirect material issued to production was $19,000 Total manufacturing labour incurred in June was $172,500, 80% of this amount represented direct labour. Other manufacturing overhead costs incurred for June amounted to $170,375. Two jobs were completed with total costs of $160,000 & $105,000 respectively. They were sold on account at a mark-up of 75% on cost. Required: i) Compute Monticello’s predetermined manufacturing overhead rate for 2017. ii) State the journal entries necessary to record the above transactions in the general journal: a) For direct materials used in June b) For indirect material issued to production in June c) For total manufacturing labour incurred in June d) To assign manufacturing labour to the appropriate accounts e) For other manufacturing overhead incurred f) For manufacturing overhead applied for June g) To move the completed jobs into finished goods inventory h) To sell the two completed jobs on account iii) Calculate the manufacturing overhead variance for Monticello and state the journal entries necessary to dispose of the variance. iv) What is balance on the Cost of Goods Sold account after the adjustment v) Determine the balance in work in process inventory on June 30.
In: Accounting
Cavalier Company has several processing departments. Costs
charged to the assembly department for November 2020 totalled
$2,601,819 as follows:
Work in process, November 1
Materials
$69,400
Conversion costs
47,900
$117,300
Materials added
1,892,150
Labour
226,000
Overhead
366,369
Production records show that 35,500 units were in beginning work in
process, 30% complete in terms of conversion costs, 691,000 units
were started into production, and 25,150 units were in ending work
in process, 40% complete in terms of conversion costs. Materials
are entered at the beginning of each process.
Determine the equivalent units of production and the unit
production costs for the assembly department. (Round unit costs to
2 decimal places, e.g. 15.25.)
Equivalent units
Unit cost
Materials$ per unit
Conversion costs$ per unit
Determine the assignment of costs to goods transferred out and
in process.
Costs accounted for
Transferred out$
Work in process, November 30
Materials$
Conversion costs
Total costs$
Prepare a production cost report for the assembly department.
(Round unit costs to 2 decimal places, e.g. 15.25.)
CAVALIER COMPANY
Assembly Department
Production Cost Report
For the Month Ended November 30, 2020
Equivalent Units
QuantitiesPhysical UnitsMaterialsConversion CostsTotal
Units to be accounted for
Work in process, November 1
Started into production
Total units
Units accounted for
Transferred out
Work in process, November 30
Total units
Costs
Unit costs
Costs in November$ $ $
Equivalent units
Unit costs$ $ $
Costs to be accounted for
Work in process, November 1$
Started into production
Total costs$
Cost Reconciliation Schedule
Costs accounted for
Transferred out$
Work in process, November 30
Materials$
Conversion costs
Total costs$
In: Accounting
Triumph Trophies makes trophies and plaques and operates at capacity. Triumphdoes large custom orders, such as the participant trophies for the Minnetonka Little League. The controller has asked you to compareplant-wide, department, and activity-based cost allocation.
|
Triumph Trophies Budgeted Information for the Year Ended November 30, 2014 |
|
Forming Department |
Trophies |
Plaques |
Total |
|
Direct materials |
$26,000 |
$23,500 |
$49,500 |
|
Direct manufacturing labor |
30,200 |
13,800 |
44,000 |
|
Overhead costs |
|||
|
Set up |
21,560 |
||
|
Supervision |
20,680 |
||
|
Assembly Department |
Trophies |
Plaques |
Total |
|
Direct materials |
$4,900 |
$87,150 |
$92,050 |
|
Direct manufacturing labor |
15,500 |
15,500 |
31,000 |
|
Overhead costs |
|||
|
Setup |
45,095 |
||
|
Supervision |
16,430 |
Setup costs in each department vary with the number of batches processed in each department. The budgeted number of batches for each product line in each department is as follows:
|
Trophies |
Plaques |
|
|
Forming department |
37 |
117 |
|
Assembly department |
43 |
102 |
Supervision costs in each department vary with direct manufacturing labor costs in each department.
|
1. |
Calculate the budgeted cost of trophies and plaques based on a singleplant-wide overhead rate, if total overhead is allocated based on total direct costs. |
|
2. |
Calculate the budgeted cost of trophies and plaques based on departmental overhead rates, where forming department overhead costs are allocated based on direct manufacturing labor costs of the forming department and assembly department overhead costs are allocated based on total direct costs of the assembly department. |
|
3. |
Calculate the budgeted cost of trophies and plaques if Triumph allocates overhead costs in each department using activity-based costing. |
|
4. |
Explain how the disaggregation of information could improve or reduce decision quality. |
In: Accounting
Shown here is an income statement in the traditional format for a firm with a sales volume of 7,500 units. Cost formulas also are shown:
|
Revenues |
$ |
34,100 |
|
Cost of goods sold ($5,600 + $2.15/unit) |
21,725 |
|
|
Gross profit |
$ |
12,375 |
|
Operating expenses: |
||
|
Selling ($1,170 + $0.10/unit) |
1,920 |
|
|
Administration ($3,650 + $0.20/unit) |
5,150 |
|
|
Operating income |
$ |
5,305 |
Required:
a. Prepare an income statement in the contribution margin format.
|
||||||||||||||||||||||||||||||||||||||||||||||||||
b. Calculate the contribution margin per unit and the contribution margin ratio. (Do not round intermediate calculations. Round contribution margin per unit to 2 decimal places.)
c-1. Calculate the firm's operating income (or loss) if the volume changed from 7,500 units to 11,250 units. (Do not round intermediate calculations.)
c-2. Calculate the firm's operating income (or loss) if the volume changed from 7,500 units to 3,750 units. (Do not round intermediate calculations.)
Refer to your answer to part a for total revenues of $34,100.
d-1. Calculate the firm’s operating income (or loss) if unit selling price and variable expenses per unit do not change and total revenues increase by $12,500. (Round intermediate calculations to 2 decimal places.)
d-2. Calculate the firm's operating income (or loss) if unit selling price and variable expenses per unit do not change and total revenues decrease by $3,500. (Round intermediate calculations to 2 decimal places.)
In: Accounting
Long-Term Performance Report
Nabors Company had actual quality costs for the year ended June 30, 20x5, as given below.
| Prevention costs: | |
| Prototype inspection | $ 220,000 |
| Vendor certification | 440,000 |
| Total prevention costs | $ 660,000 |
| Appraisal costs: | |
| Process acceptance | $ 235,000 |
| Test labor | 280,000 |
| Total Appraisal costs | $ 515,000 |
| Internal failure costs: | |
| Retesting | $ 147,500 |
| Rework | 295,000 |
| Total internal failure costs | $ 442,500 |
| External failure costs: | |
| Recalls | $ 392,000 |
| Product liability | 408,250 |
| Total external failure costs | $ 800,250 |
| Total quality costs | $2,417,750 |
At the zero-defect state, Nabors expects to spend $275,000 on quality engineering, $55,000 on vendor certification, and $75,000 on packaging inspection. Assume sales to be $2,200,000.
Required:
1. Prepare a long-range performance report for 20x5. Enter all answers as positive amounts. If the budget variance amount is unfavorable select "Unfavorable" in the last column of the table. Select "Favorable" if it is favorable. Round percentage answers to two decimal places, if rounding is required. For example, 5.789% would be entered as "5.79". Enter "0" as the target cost amount if there would be no cost at the zero-defect state.
| Nabors Company | ||||
| Long-Range Performance Report | ||||
| For the Year Ended June 30, 20x5 | ||||
| Actual Costs | Target Costs | Budget Variance | Favorable; or Unfavorable | |
| Prevention costs: | ||||
| $ | $ | $ | ||
| Total prevention costs | $ | $ | $ | |
| Appraisal costs: | ||||
| $ | $ | $ | ||
| Total appraisal costs | $ | $ | $ | |
| Internal failure costs: | ||||
| $ | $ | |||
| Total internal failure costs | $ | $ | ||
| External failure costs: | ||||
| $ | $ | |||
| Total external failure costs | $ | $ | ||
| Total quality costs | $ | $ | $ | |
| Percentage of sales | % | % | % | |
In: Accounting
Nabors Company had actual quality costs for the year ended June 30, 20x5, as given below.
| Prevention costs: | |
| Prototype inspection | $ 280,000 |
| Vendor certification | 560,000 |
| Total prevention costs | $ 840,000 |
| Appraisal costs: | |
| Process acceptance | $ 295,000 |
| Test labor | 340,000 |
| Total Appraisal costs | $ 635,000 |
| Internal failure costs: | |
| Retesting | $ 177,500 |
| Rework | 355,000 |
| Total internal failure costs | $ 532,500 |
| External failure costs: | |
| Recalls | $ 245,500 |
| Product liability | 545,000 |
| Total external failure costs | $ 790,500 |
| Total quality costs | $2,798,000 |
At the zero-defect state, Nabors expects to spend $350,000 on quality engineering, $70,000 on vendor certification, and $60,000 on packaging inspection. Assume sales to be $2,500,000.
Required:
1. Prepare a long-range performance report for 20x5. Enter all answers as positive amounts. If the budget variance amount is unfavorable select "Unfavorable" in the last column of the table. Select "Favorable" if it is favorable. Round percentage answers to two decimal places, if rounding is required. For example, 5.789% would be entered as "5.79". Enter "0" as the target cost amount if there would be no cost at the zero-defect state.
| Nabors Company | ||||
| Long-Range Performance Report | ||||
| For the Year Ended June 30, 20x5 | ||||
| Actual Costs | Target Costs | Budget Variance | Favorable; or Unfavorable | |
| Prevention costs: | ||||
| $ | $ | $ | ||
| Total prevention costs | $ | $ | $ | |
| Appraisal costs: | ||||
| $ | $ | $ | ||
| Total appraisal costs | $ | $ | $ | |
| Internal failure costs: | ||||
| $ | $ | |||
| Total internal failure costs | $ | $ | ||
| External failure costs: | ||||
| $ | $ | |||
| Total external failure costs | $ | $ | ||
| Total quality costs | $ | $ | $ | |
| Percentage of sales | % | % | % | |
2. Why are quality costs still present for the
zero-defect state?
In: Accounting
Long-Term Performance Report
Nabors Company had actual quality costs for the year ended June 30, 20x5, as given below.
| Prevention costs: | |
| Prototype inspection | $ 400,000 |
| Vendor certification | 800,000 |
| Total prevention costs | $ 1,200,000 |
| Appraisal costs: | |
| Process acceptance | $ 415,000 |
| Test labor | 460,000 |
| Total Appraisal costs | $ 875,000 |
| Internal failure costs: | |
| Retesting | $ 237,500 |
| Rework | 475,000 |
| Total internal failure costs | $ 712,500 |
| External failure costs: | |
| Recalls | $ 253,750 |
| Product liability | 581,750 |
| Total external failure costs | $ 835,500 |
| Total quality costs | $3,623,000 |
At the zero-defect state, Nabors expects to spend $500,000 on quality engineering, $100,000 on vendor certification, and $65,000 on packaging inspection. Assume sales to be $2,400,000.
Required:
1. Prepare a long-range performance report for 20x5. Enter all answers as positive amounts. If the budget variance amount is unfavorable select "Unfavorable" in the last column of the table. Select "Favorable" if it is favorable. Round percentage answers to two decimal places, if rounding is required. For example, 5.789% would be entered as "5.79". Enter "0" as the target cost amount if there would be no cost at the zero-defect state.
| Nabors Company | ||||
| Long-Range Performance Report | ||||
| For the Year Ended June 30, 20x5 | ||||
| Actual Costs | Target Costs | Budget Variance | Favorable; or Unfavorable | |
| Prevention costs: | ||||
| $ | $ | $ | ||
| Total prevention costs | $ | $ | $ | |
| Appraisal costs: | ||||
| $ | $ | $ | ||
| Total appraisal costs | $ | $ | $ | |
| Internal failure costs: | ||||
| $ | $ | |||
| Total internal failure costs | $ | $ | ||
| External failure costs: | ||||
| $ | $ | |||
| Total external failure costs | $ | $ | ||
| Total quality costs | $ | $ | $ | |
| Percentage of sales | % | % | % | |
2. Why are quality costs still present for the
zero-defect state?
In: Accounting