The mean temperature for the month of July in Boston, Massachusetts is 73 degrees Fahrenheit. Plot the following data, which represent the observed mean temperature in Boston over the last 20 years:

199872199969200078200170200267200374200473200565200677200771200875200968201072201177201265201379201477201578201672201774

Is this a normal distribution? Explain your reasoning.

What is an outlier? Are there any outliers in this distribution? Explain your reasoning fully.

Using the above data, what is the probability that the mean will be over 76 in any given July?

Using the above data, what is the probability that the mean will be over 80 in any given July?

A heatwave is defined as 3 or more days in a row with a high temperature over 90 degrees Fahrenheit. Given the following high temperatures recorded over a period of 20 days, what is the probability that there will be a heatwave in the next 10 days?

Day 193Day 288Day 391Day 486Day 592Day 691Day 790Day 888Day 985Day 1091Day 1184Day 1286Day 1385Day 1490Day 1592Day 1689Day 1788Day 1890Day 1988Day 2090

Customer surveys reveal that 40% of customers purchase products online versus in the physical store location. Suppose that this business makes 12 sales in a given day

Does this situation fit the parameters for a binomial distribution? Explain why or why not?

Find the probability of the 12 sales on a given day exactly 4 are made online

Find the probability of the 12 sales fewer than 6 are made online

Find the probability of the 12 sales more than 8 are made online

Your own example:

Choose a company that you have recently seen in the news because it is having some sort of problem or scandal, and complete the following:

Discuss the situation, and describe how the company could use distributions and probability statistics to learn more about how the scandal could affect its business.

If you were a business analyst for the company, what research would you want to do, and what kind of data would you want to collect to create a distribution?

Would this be a standard, binomial, or Poisson distribution? Why?

List and discuss at least 3 questions that you would want to create probabilities for (e.g., What is the chance that the company loses 10% of its customers in the next year?).

What would you hope to learn from calculating these probabilities?

Assuming that upper management does not see the value in expending the time and money necessary to collect data to analyze, make an argument (at least 100 words) convincing them that the expenditure is necessary and explaining some dangers the company could face by not knowing what the data predict.

The mean temperature for the month of July in Boston, Massachusetts is 73 degrees Fahrenheit. Plot the following data, which represent the observed mean temperature in Boston over the last 20 years:

199872199969200078200170200267200374200473200565200677200771200875200968201072201177201265201379201477201578201672201774

Is this a normal distribution? Explain your reasoning.

What is an outlier? Are there any outliers in this distribution? Explain your reasoning fully.

Using the above data, what is the probability that the mean will be over 76 in any given July?

Using the above data, what is the probability that the mean will be over 80 in any given July?

A heatwave is defined as 3 or more days in a row with a high temperature over 90 degrees Fahrenheit. Given the following high temperatures recorded over a period of 20 days, what is the probability that there will be a heatwave in the next 10 days?

Day 193Day 288Day 391Day 486Day 592Day 691Day 790Day 888Day 985Day 1091Day 1184Day 1286Day 1385Day 1490Day 1592Day 1689Day 1788Day 1890Day 1988Day 2090

Customer surveys reveal that 40% of customers purchase products online versus in the physical store location. Suppose that this business makes 12 sales in a given day

Does this situation fit the parameters for a binomial distribution? Explain why or why not?

Find the probability of the 12 sales on a given day exactly 4 are made online

Find the probability of the 12 sales fewer than 6 are made online

Find the probability of the 12 sales more than 8 are made online

Your own example:

Choose a company that you have recently seen in the news because it is having some sort of problem or scandal, and complete the following:

Discuss the situation, and describe how the company could use distributions and probability statistics to learn more about how the scandal could affect its business.

If you were a business analyst for the company, what research would you want to do, and what kind of data would you want to collect to create a distribution?

Would this be a standard, binomial, or Poisson distribution? Why?

List and discuss at least 3 questions that you would want to create probabilities for (e.g., What is the chance that the company loses 10% of its customers in the next year?).

What would you hope to learn from calculating these probabilities?

Assuming that upper management does not see the value in expending the time and money necessary to collect data to analyze, make an argument (at least 100 words) convincing them that the expenditure is necessary and explaining some dangers the company could face by not knowing what the data predict.

Consider the following financial information of 3 companies.

Company A Company B Company C

Net Income $3,000 $3,000 $3,000

OCF $5,000 $4,600 $4,200

Which company's earnings are the most questionable (lowest quality)?

Company a

Company b

Company c

1-What is the difference between ecommerce and ebusiness?

A-Ebusiness is buying and selling of goods or services online; ecommerce includes ecommerce and all activities related to internal and external business operations.

B-Ecommerce is buying and selling of goods or services online; ebusiness includes ecommerce and all activities related to internal and external business operations.

C-Ecommerce includes ecommerce and all activities related to internal and external business operations; ebusiness includes all of the of knowledge management systems

D-Ecommerce includes Internet network effects; ebusiness includes ecommerce and all activities related to internal and external business operations.

2-What is the difference between a business model and an ebusiness model?

A- A business model and an ebusiness model are identical.

B- A business model and an ebusiness model are complete opposites.

C- A business model details how a company creates, delivers, and generates revenue; an ebusiness model does all of the same but on the Internet.

D- An ebusiness model details how a company creates, delivers, and generates revenue; a business model does all the same except on the Internet.

3- Max and Yvette have been saving for two years to take their six children on a vacation to Disney World. They are surprised to find out that airline tickets are far more expensive than they had anticipated. They decide to try to find cheaper tickets on Priceline where they are allowed to set the price they are willing to pay for the airline tickets. What form of ebusiness model are Max and Yvette using?

A- C2B

B- B2B

C- CBC

D- C2C

4- An Internet service provider (ISP) is a company that provides access to the Internet for a monthly fee.

A- True

B- False

Boards Inc. fabricates skateboards that the company sells for $ 37.50 each. Fixed costs for the last 12 months equaled $4,800. For the same period variable cost per unit equaled $22.50. Use the unit variable cost and sales price to calculate the unit contribution margin: 9120 Calculate the breakeven sales volume. BLANK-2 Calculate the sales volume necessary to produce a target Net Income of $3,000 per month. BLANK-3 The skateboards are manufactured in an old factory that relies heavily on worker labor. The company is considering the construction of a new automated plant that would increase fixed costs by $ 4,320 per month, but decrease the variable cost per board by $ 8.50. What would the fixed costs and unit variable costs be under the proposal. Use the unit variable cost and sales price to calculate the unit contribution margin: Fixed Cost BLANK-4 Variable cost per unit BLANK-5 Contribution Margin per unit BLANK-6 Compute the breakeven under the new proposal. BLANK-7 Prepare comparative Contribution Margin Income Statements for the current and proposed manufacturing processes assuming the sales volume is 480 units per month. Current Process Sales Revenue BLANK-8 Variable Costs BLANK-9 Contribution Margin BLANK-10 Fixed Costs BLANK-11 Net Income BLANK-12 Proposed New Process Sales Revenue BLANK-13 Variable Costs BLANK-14 Contribution Margin BLANK-15 Fixed Costs BLANK-16 Net Income BLANK-17 If the company is expected to sell 480 units a month, should they build the new factory? Yes or No BLANK-18

ABC company is considering producing a new range of smartphones that will require it to build a new factory. Feasibility studies have been done on the factory which cost $5 million. The studies have found the following:

1. The factory will cost $25 million and will have a useful life of 20 years.

2. The land where the factory will go is currently used as a carpark for workers and it is assumed that the company will have to pay $200000 per year for their workers to park in a nearby carpark.

3. The factory will be depreciated on a straight line basis and will have a salvage value of $0 but it is believed that most of it can be sold for scrap after 20 years for $50000.

4. Due to the nature of the business they are in, they will have to perform some environmental tests to make sure that some of the chemicals they are using are not entering the ground water around the factory. These tests will be performed every 5 years and cost $625000.

5. Through the building of this factory and the selling of the phones it produces, it’s revenue will increase by $5 million in year 1 and remain at this level for the operational life of the factory.

6. The extra costs that the company accrues per year due to the project are $435000 for labour, $50000 for overhead like power and water bills and marketing costs for the new line of phones will be $500000 per year but will decrease by $15000 per year as the phone gains greater penetration.

7. The company’s current cost of capital is 8% per year.

8. The tax rate is 30%.

9. The project requires an initial investment in working capital of $1000000 that is returned in year 20.

Calculate the break even point for the following variables:

a. The cost of capital.

b. The yearly revenue.

c. The labour cost.

Phoenix Inc., a cellular communication company, has multiple business units, organized as divisions. Each division’s management is compensated based on the division’s operating income. Division A currently purchases cellular equipment from outside markets and uses it to produce communication systems. Division B produces similar cellular equipment that it sells to outside customers—but not to division A at this time. Division A’s manager approaches division B’s manager with a proposal to buy the equipment from division B. If it produces the cellular equipment that division A desires, division B will incur variable manufacturing costs of $60 per unit.

Relevant Information about Division B

Sells 75,000 units of equipment to outside customers at $130 per unit

Operating capacity is currently 80%; the division can operate at 100%

Variable manufacturing costs are $70 per unit

Variable marketing costs are $8 per unit

Fixed manufacturing costs are $780,000

Income per Unit for Division A (assuming parts purchased externally, not internally from division B)

Required:

1. Division A wants to buy 37,500 units from Division B at $75 per unit. Should Division B accept or reject the proposal to sell the 37,500 units?

(a). Calculate the net operating profit or loss to Division B and to the firm as a whole if the 37,500 units are sold to Division A.

(b.) Calculate the net benefit to the firm as a whole if Division A will accept a partial shipment from Division B.

2. What is the range of transfer prices over which the divisional managers might negotiate a final transfer price?

Cost Management: A Strategic Emphasis (8th Edition) Chapter 19, Problem 49

Transfer Pricing;

Decision Making Phoenix Inc., a cellular communication company, has multiple business units, organized as divisions. Each division’s management is compensated based on the division’s operating income.

Division A currently purchases cellular equipment from outside markets and uses it to produce communication systems.

Division B produces similar cellular equipment that it sells to outside customers—but not to division A at this time.

Division A’s manager approaches division B’s manager with a proposal to buy the equipment from division B.

If it produces the cellular equipment that division A desires, division B will incur variable manufacturing costs of $60 per unit.

Relevant Information about Division B
Sells 50,000 units of equipment to outside customers at $130 per unit
Operating capacity is currently 80%; the division can operate at 100%
Variable manufacturing costs are $70 per unit
Variable marketing costs are $8 per unit
Fixed manufacturing costs are $580,000

Income per Unit for Division A (assuming parts purchased externally, not internally from division B)
Sales revenue $320
Manufacturing costs:
Cellular equipment 80
Other materials 10
Fixed costs 40
Total manufacturing costs 130
Gross margin 190
Marketing costs:
Variable 35
Fixed 15
Total marketing costs 50
Operating income per unit $140

Required
1. Division A wants to buy 25,000 units from division B at $75 per unit.

Should division B accept or reject the proposal?

How would your answer differ if (a) division A requires all 25,000 units in the order to be shipped by the same supplier, or (b) division A would accept partial shipment from division B?

2. What is the range of transfer prices over which the divisional managers might negotiate a final transfer
price? Provide a rationale for the range you provide.

Phoenix Inc., a cellular communication company, has multiple business units, organized as divisions. Each division’s management is compensated based on the division’s operating income. Division A currently purchases cellular equipment from outside markets and uses it to produce communication systems. Division B produces similar cellular equipment that it sells to outside customers—but not to division A at this time. Division A’s manager approaches division B’s manager with a proposal to buy the equipment from division B. If it produces the cellular equipment that division A desires, division B will incur variable manufacturing costs of $60 per unit.

Relevant Information about Division B

Sells 95,000 units of equipment to outside customers at $130 per unit

Operating capacity is currently 80%; the division can operate at 100%

Variable manufacturing costs are $70 per unit

Variable marketing costs are $8 per unit

Fixed manufacturing costs are $940,000

Income per Unit for Division A (assuming parts purchased externally, not internally from division B)

Required:

1. Division A wants to buy 47,500 units from Division B at $75 per unit. Should Division B accept or reject the proposal to sell the 47,500 units? (a). Calculate the net operating profit or loss to Division B and to the firm as a whole if the 47,500 units are sold to Division A. (b.) Calculate the net benefit to the firm as a whole if Division A will accept a partial shipment from Division B.

2. What is the range of transfer prices over which the divisional managers might negotiate a final transfer price?