### The firm currently uses 50,000 workers to produce 200,000 units of output per day

The firm currently uses 50,000 workers to produce 200,000 units of output per day.

The daily wage per worker is \$80, and the price of the firm’s output is \$25. The cost of other variable inputs is \$400,000 per day. Although you do not know the firm’s fixed cost, you know that it is high enough that the firm’s total costs exceed its total revenue. Assume that total fixed cost equals \$1,000,000.

Calculate the values for the following four formulas: •Total Variable Cost = (Number of Workers * Worker’s Daily Wage) + Other Variable Costs •Average Variable Cost = Total Variable Cost / Units of Output per Day •Average Total Cost = (Total Variable Cost +Total Fixed Cost) / Units of Output per Day •Worker Productivity = Units of Output per Day / Number of Workers Then, assume that total fixed cost equals \$3,000,000, and recalculate the values of the four variables listed above. For both cases, calculate the firm’s profit or loss.

For both sets of calculations, compare the firm’s output price and the calculated average variable cost and average total cost. Should the firm shutdown immediately when the total fixed cost equals \$1,000,000? Should the firm shut down immediately when the total fixed cost equals \$3,000,000?

For one of the cases, if the firm can operate at a loss in the short-run, how many employees need to be laid off in order for the company to break even? To calculate the number of workers to be laid off, divide the loss for the two situations by the daily wage per worker.

Given a lower number of employees now working at the company, what is the change in worker productivity? Is the change in worker too large, and the firm should shut down immediately? Or in your opinion, can the workers increase their productivity, assuming that the units of output per day remain fixed at 200,000 units, so that the firm operates at a breakeven state? Provide a two to four page report to management of the firm that discusses what should be done. Be sure to show your work to support the decision you outline in your report.

### Explain the difference between Muslims and Arabs

Explain the difference between Muslims and Arabs.

o According to current (within the past two years) research and news reports, what are
some of the changes the United States has made to policies concerning the
treatment of Muslim and Arabic members of society?
o List two to three characteristics of Orientalism. How may Orientalism and prejudice
contribute to hate crimes against these groups?
o What can individuals do to promote tolerance and reduce prejudice in their towns and
cities? For ideas, go to http://www.tolerance.org, http://www.splcenter.org,
http://www.villagevoice.com/2003-07-08/news/making-enemies

ETH 125 WEEK 5 CheckPoint: Characteristics of Orientalism, Prejudice, and Discrimination

### Midland Chemical Co. is negotiating a loan from Manhattan Bank and Trust. The small chemical company needs to borrow \$500,000

FIN 200

Introduction to Finance: Harvesting the Money Tree

Week Seven (Week 7) Solution

CheckPoint: Break-Even Analysis

• Resource: Ch. 8 of Foundations of Financial Management
• Due Date: Day 7 [post to the Individual forum]
• Complete the Comprehensive Problem: Midland Chemical Co. on pp. 250-251.
• Post the assignment as an attachment.

Midland Chemical Co. is negotiating a loan from Manhattan Bank and Trust. The
small chemical company needs to borrow \$500,000.
The bank offers a rate of 8Â¼ percent with a 20 percent compensating balance
requirement, or as an alternative, 9Â¾ percent with additional fees of \$5,500 to cover
services the bank is providing. In either case the rate on the loan is floating (changes as
the prime interest rate changes), and the loan would be for one year.

a. Which loan carries the lower effective rate? Consider fees to be the equivalent of
other interest.

b. If the loan with a 20 percent compensating balance requirement were to be paid
off in 12 monthly payments, what would the effective rate be? (Principal equals
amount borrowed minus the compensating balance.)

c. Assume the proceeds from the loan with the compensating balance requirement
will be used to take cash discounts. Disregard part b about installment payments
and use the loan cost from part a.
If the terms of the cash discount are 1.5/10, net 50, should the firm borrow the funds
to take the discount?

d. Assume the firm actually takes 80 days to pay its bills and would continue to
do so in the future if it did not take the cash discount. Should it take the cash
discount?

e. Because the interest rate on the loans is floating, it can go up as interest rates go
up. Assume that the prime rate goes up by 2 percent and the quoted rate on the
loan goes up the same amount. What would then be the effective rate on the loan
with compensating balances? Convert the interest to dollars as the first step in

f. In order to hedge against the possible rate increase described in part e, Midland
decides to hedge its position in the futures market. Assume it sells \$500,000
worth of 12-month futures contracts on Treasury bonds. One year later, interest
rates go up 2 percent across the board and the Treasury bond futures have gone
down to \$488,000. Has the firm effectively hedged the 2 percent increase in
interest rates on the bank loan as described in part e? Determine the answer in
dollar amounts

### Acct 281 Chapter 5 Accounting for Merchandising Operations

Acct 281 Chapter 5 Accounting for Merchandising Operations
Journalize, post, and prepare trial balance and partial income statement using periodic approach.
(SO 7, 8)
*P5-7A At the beginning of the current season, the ledger of Village Tennis Shop showed Cash
\$2,500; Merchandise Inventory \$1,700; and Common Stock \$4,200. The following transactions
were completed during April.
Apr. 4 Purchased racquets and balls from Denton Co. \$740, terms 3/10, n/30.
6 Paid freight on Denton Co. purchase \$60.
8 Sold merchandise to members \$900, terms n/30.
10 Received credit of \$40 from Denton Co. for a damaged racquet that was returned.
11 Purchased tennis shoes from Newbee Sports for cash \$300.
13 Paid Denton Co. in full.
14 Purchased tennis shirts and shorts from Venus's Sportswear \$600, terms 2/10, n/60.
15 Received cash refund of \$50 from Newbee Sports for damaged merchandise that was
returned.
17 Paid freight on Venus's Sportswear purchase \$30.
18 Sold merchandise to members \$1,000, terms n/30.
20 Received \$500 in cash from members in settlement of their accounts.
21 Paid Venus's Sportswear in full.
27 Granted an allowance of \$30 to members for tennis clothing that did not fit properly.
30 Received cash payments on account from members \$500.
The chart of accounts for the tennis shop includes Cash; Accounts Receivable; Merchandise
Inventory; Accounts Payable; Common Stock; Sales; Sales Returns and Allowances; Purchases;
Purchase Returns and Allowances; Purchase Discounts; and Freight-in.

Instructions

(a) Journalize the April transactions using a periodic inventory system.
(b) Using T accounts, enter the beginning balances in the ledger accounts and post the April
Transactions.
(c) Prepare a trial balance on April 30, 2008.
(d) Prepare an income statement through gross profit, assuming merchandise inventory on hand
at April 30 is \$2,296.

Journalize perpetual inventory entries
E5-3 On September 1, Howe Office Supply had an inventory of 30 calculators at a cost of \$18
each.The company uses a perpetual inventory system. During September, the following transactions
occurred.
Sept. 6 Purchased 80 calculators at \$20 each from DeVito Co. for cash.
9 Paid freight of \$80 on calculators purchased from DeVito Co.
10 Returned 2 calculators to DeVito Co. for \$42 credit (including freight) because they
did not meet specifications.
12 Sold 26 calculators costing \$21 (including freight) for \$31 each to Mega Book Store,
terms n/30.
14 Granted credit of \$31 to Mega Book Store for the return of one calculator that was not
ordered.
20 Sold 30 calculators costing \$21 for \$31 each to Barbara's Card Shop, terms n/30.

Instructions
Journalize the September transactions

Journalize purchase transactions.
*E5-16 This information relates to Martinez Co.

1. On April 5 purchased merchandise from D. Norlan Company for \$20,000, terms 2/10, net/30,
FOB shipping point.
2. On April 6 paid freight costs of \$900 on merchandise purchased from D. Norlan Company.
3. On April 7 purchased equipment on account for \$26,000.
4. On April 8 returned some of April 5 merchandise to D. Norlan Company which cost \$2,800.
5. On April 15 paid the amount due to D. Norlan Company in full.
Instructions
(a) Prepare the journal entries to record these transactions on the books of Martinez Co. using a
periodic inventory system.
(b) Assume that Martinez Co. paid the balance due to D. Norlan Company on May 4 instead of
April 15. Prepare the journal entry to record this payment.

### CheckPoint: Accounting Information Systems and Special Journals

CheckPoint: Accounting Information Systems and Special Journals
• Resource: Fundamental Accounting Principles, pp. 289, 290, and 291
• Due Date: Day 5 [Individual] forum
• Complete Quick Study questions QS 7-1 and QS 7-3 on p. 289, and Exercises 7-1, 7-4,
7-7, and 7-10 on pp. 290-291.

Optional Information:
Subject: Accounting 225

QUICK STUDY
QS 7-1
Accounting information system principles

Place the letter of each system principle in the blank next to its best description.
A. Control principle D. Flexibility principle
B. Relevance principle E. Cost-benefit principle
C. Compatibility principle

1. The principle prescribes the accounting information system to change in response to technological advances and competitive pressures.

2. The principle prescribes the accounting information system to help monitor activities.

3. The principle prescribes the accounting information system to provide timely information for effective decision making.

4. The principle prescribes the accounting information system to adapt to the unique characteristics of the company.

5. The principle that affects all other accounting information system principles.

QS 7-3
Accounting information system components

Identify the most likely role in an accounting system played by each of the numbered items 1 through 12 by assigning a letter from the list A through E on the left:

A. Source documents
B. Input devices
C. Information processors
D. Information storage
E. Output devices

2. Filing cabinet
3. Bank statement
4. Computer scanner
5. Computer keyboard
6. Zip drive
7. Computer monitor
8. Invoice from a supplier
9. Computer software
10. Computer printer
11. Digital camera

EXERCISES
Exercise 7-1 Sales journal—perpetual

Hutton Company uses a sales journal, a purchases journal, a cash receipts journal, a cash disbursement journal, and a general journal. The following transactions occur in the month of March:

Mar. 2 Sold merchandise costing \$300 to B. Fager for \$450 cash, invoice no. 5703.
5 Purchased \$2,300 of merchandise on credit from Marsh Corp.
7 Sold merchandise costing \$800 to J. Dryer for \$1,150, terms 2_10, n_30, invoice no. 5704.
8 Borrowed \$8,000 cash by signing a note payable to the bank.

### Hypothesis Testing on Multiple Populations The Course Manager for AMBA 610 wants to use a new tutorial to teach the students about business ethics

Hypothesis Testing on Multiple Populations The Course Manager for AMBA 610 wants to use a new tutorial to teach the students about business ethics. As an experiment she randomly selected 15 students and randomly assigned them to one of three groups which include either a PowerPoint presentation created by the faculty, AuthorGen Presentation created by the faculty, or a well known tutorial by the ABC Company. After completing their assigned tutorial, the students are given a Business Ethics test. At the .05 significance level, can she conclude that there is a difference between how well the different tutorials work for the students? Below are figures for students grades on the Business Ethics Test following the Tutorial: PwerPt Tutorial: 98,85,91,87,98 AuthorGen Tutorial:79, 86, 72,82,91 ABC Tutorial: 65, 83, 78, 66, 81

### Costs that do not increase or decrease due to a special order are never considered incremental costs for the special order decision

1. Costs that do not increase or decrease due to a special order are never considered incremental costs for the special order decision. .....a.True** .....b.False .....
2. Manufacturing costs include direct material, direct labor, and manufacturing overhead. .....a.True .....b.False .....
3. One goal of just-in-time systems is to minimize inventory levels. .....a.True .....b.False .....
4. Marco Diner produced and sold 2,000 bagels last month and had fixed costs of \$6,000. If production and sales are expected to increase by 10% next month, which of the following statements is true?.....a.Total fixed costs will increase. .....b.Total fixed costs will decrease. .....c.Fixed cost per unit will increase. .....d.Fixed cost per unit will decrease. .....
5. Shula's 347 Grill has budgeted the following costs for a month in which 1,600 steak dinners will be produced and sold: Materials, \$4,080; hourly labor (variable), \$5,200; rent (fixed), \$1,700; depreciation, \$800; and other fixed costs, \$600. Each steak dinner sells for \$14.00 each. How much is the budgeted variable cost per unit? (Points: 5) \$5.80 \$7.74 \$6.68 \$3.25
6. Breezes Curacao has 200 rooms. Each room rents at \$130 per night and variable costs total \$42 per room per night of occupancy. Fixed costs total \$18,700 per month. If Breezes is able to increase occupancy from 70% to 80% by how much will total costs increase per day during the month of June? .....a.\$840 .....b.\$2,710 .....c.\$1,870 .....d.\$1,760 .....
7. Which of the following costs is part of manufacturing overhead? .....a.Indirect labor .....b.Direct labor .....c.Salaries for the accounting personnel .....d.Wages for the janitorial staff for the sales offices .....
8. A job-order costing system is likely to be used by a.....a.soft-drink bottler. .....b.breakfast cereal manufacturer. .....c.paint manufacturer. .....d.caterer. .....
9. Wingfield Company budgeted 121,000 direct labor hours and incurred 125,000 direct labor hours. It incurred \$720,000 of overhead and estimated overhead was \$726,000. What was the predetermined overhead rate? .....a.\$5.80 .....b.\$6.00 .....c.\$5.60 .....d.\$5.76 .....
10. If a company has zero beginning inventory and zero ending inventory (is completely just-in-time), then which of the following is true? .....a.Cost of goods sold will equal cost of goods manufactured .....b.Cost of goods sold will be zero .....c.Cost of goods manufactured will be zero .....d.All of the above .....
11. A significant disadvantage of a process costing system is that it requires the use of actual overhead costs rather than predetermined overhead rates. .....a.True .....b.False .....

12. Which of the following costs is not added to the Work in Process account in a process costing system? .....a.Manufacturing overhead .....b.Direct materials .....c.Direct labor .....d.Advertising .....
13. Department Alpha had no beginning inventory. The department added direct materials of \$100,000 and conversion costs of \$150,000 during the month of July. Materials are added at the beginning of the process and conversion costs are added evenly throughout the process in this department. During the period, 40,000 units were completed. At the end of the period 40,000 units remained which were 10% complete. What is the cost per equivalent unit of materials and conversion costs, respectively in July? .....a.\$3.41 and 4.66 .....b.\$1.25 and \$3.41 .....c.\$1.25 and \$1.88 .....d.\$1.88 and \$3.41 .....
14. Ending inventory in the assembly department consists of 700 units which are 50% complete with respect to conversion costs. The beginning inventory consisted of 2,000 units. During the month, 6,000 units were started. How many equivalent units will be used in the cost per equivalent unit calculation for conversion costs? .....a.7,650 .....b.7,300 .....c.8,000 .....d.6,700 .....
15. In the cutting department, all the materials are added at the beginning of the process and conversion costs are added evenly during the processing. During the first month of operations, the cutting department transferred 50,000 units to the sewing department. Ending inventory consisted of 2,800 units which were 35% complete with respect to conversion costs. What are the equivalent units for materials and for conversion costs, respectively? .....a.50,000 and 50,980 .....b.52,800 and 50,980 .....c.52,800 and 52,800 .....d.50,000 and 52,800 .....
16. The account analysis method is subjective in that different managers viewing the same set of facts may reach different conclusions regarding which costs are fixed and which costs are variable. .....a.True .....b.False .....
17. If the contribution margin ratio is 40%, it means that every \$1.00 of sales will contribute \$0.40 to covering fixed costs and generating a profit. .....a.True .....b.False .....
18. Income statements of manufacturing firms prepared for external purposes use variable costing. .....a.True .....b.False .....
19. Step costs.....a.are the same amount per unit for each range of volume. .....b.are fixed for a range of volume but increase to a higher level when the upper bound of the range is exceeded. .....c.are a different total amount at every level of activity. .....d.contain both a variable cost element and a fixed cost element. .....
20. When considering a process that involves a resource constraint, the optimal decision .....a.minimizes the break-even point. .....b.maximizes the contribution margin per unit of the constraint. .....c.minimizes the contribution margin per unit of output. .....d.minimizes total fixed costs. .....
21. In full costing, when does fixed manufacturing overhead become an expense? .....a.In the period when other fixed costs are at the highest level. .....b.In the period when the product is sold. .....c.In the period when the expense is incurred. .....d.When the controller decides that the expense should be recognized......
22. Which is most consistent with cost-volume-profit analysis? .....a.variable costing......b.full costing. .....c.they are equally useful. .....d.neither is consistent with C-V-P. .....
23. Michael Vick has written a self improvement book that has the following cost characteristics: Assume that the current sales level is 30,000 units. What impact would a 30% increase in sales have on profit?
Selling price \$16.00 per book
Variable cost per unit
Production \$4.00
Fixed costs:
Production \$88,000 per year
Selling & administrative 18,000 per year

Assume that the current sales level is 30,000 units. What impact would a 30% increase in sales have on profit?

a. Profit would increase 30%.
b. Profit would increase 100%.
c. Profit would increase \$90,000.
d. Profit would increase \$44,000.

24. The Cider Company experienced the following costs in 2011:
Direct materials \$2.65/unit
Direct labor \$1.80/unit
Variable selling \$1.15/unit
Fixed selling \$35,000

During the year the company manufactured 47,000 units and sold 40,000 units. How much is the average unit product cost using full costing?

a. \$7.70
b. \$9.70
c. \$8.85
d. \$10.85

25. T-Shirt Man is a direct marketer of popular t-shirts. Following is information about its revenue and cost structure:
Selling Price: \$15.00/t-shirt
Variable Costs:
Production (manufacturing costs) \$3.00/t-shirt
Selling & Administrative (non-mfg costs) \$1.00/t-shirt
Fixed Costs:
Production (mfg costs) \$1,000,000/year
Selling & Administration (non-mfg costs) \$2,000,000/year

Assume 400,000 t-shirts are produced and 350,000 are sold in 2011. What is income under full costing?

a. \$975,000
b. \$1,400,000
c. \$850,000
d. \$2,250,000

26. Allocating actual service department costs allows the service departments to pass on the costs of inefficiencies to the production departments. .....a.True .....b.False .....
27. A major problem with cost-plus contracts is that they .....a.are not acceptable under GAAP. .....b.cause the supplier to take significant financial risks. .....c.require the supplier to use variable costing. .....d.create an incentive to allocate as much cost as possible to the goods produced under the cost-plus contract......
28. A grouping of individual costs whose total is allocated using one allocation base is called a .....a.cost objective. .....b.cost pool. .....c.direct cost......d.sunk cost. .....
29. When activity based costing is implemented, the initial outcome is normally that: .....a.the cost of all products will be higher. .....b.The cost of all products will be lower .....c.The cost of low volume products will be higher and the cost of high volume products will be lower. .....d.The cost of low volume products will be lower and the cost of high volume products will be higher. .....
30. The traditional approach to cost allocation.....a.tends to over-cost high volume core products. .....b.usually requires more cost pools than ABC. .....c.attempts to identify the activities that cause costs. .....d.produces more accurate costs than any other method. .....
31. The proper way to analyze the decision to drop a product line is to compare sunk costs to incremental costs. .....a.True .....b.False .....
32. Opportunity costs represent the benefits foregone by selecting one alternative over another. .....a.True .....b.False .....
33. A company is trying to decide whether to sell partially completed goods in their current state or incur additional costs to finish the goods and sell them as complete units. Which of the following is not relevant to the decision? .....a.The selling price of the completed units. .....b.The costs incurred to process the units to this point. .....c.The selling price of the partially completed units. .....d.The costs that will be incurred to finish the units. .....
34. BigByte Company has 12 obsolete computers that are carried in inventory at a cost of \$13,200. If these computers are upgraded at a cost of \$7,500, they could be sold for \$15,300. Alternatively, the computers could be sold "as is" for \$9,000. What is the net advantage or disadvantage of reworking the computers?.....a.\$6,300 advantage .....b.\$1,200 disadvantage .....c.\$5,400 disadvantage .....d.\$3,000 advantage .....
35. In theory of constraints, to "break the binding constraint" means to.....a.improve the process that was the binding constraint so that some other process is now the binding constraint. .....b.improve all processes simultaneously. .....c.make sure that the items made in the constrained process yield the highest contribution margin. .....d.All of the above. .....
36. Depreciation itself is not a cash flow, but it reduces the amount of taxes that a company must pay. .....a.True .....b.False .....
37. Suppose you face the prospect of receiving \$500 per year for the next five years plus an extra \$800 payment at the end of six years. Determine how much this prospect is worth today if the required rate of return is 12 percent. .....a.\$1,802 .....b.\$2,208 .....c.\$2,355 .....d.\$2,602 .....
38. Using an interest rate of 14%, how much is the present value of \$800,000 to be received in 15 years? .....a.\$112,080 .....b.\$58,481 .....c.\$533,334 .....d.\$746,666 .....
39. An investment of \$100,000 promises returns of \$40,000 per year for each of the next three years. If taxes are ignored and the required rate of return is 14%, what is the net present value of the project? .....a.\$92,864 .....b.\$20,000 .....c.(\$7,136) .....d.(\$19,000) .....
40. An investment of \$700,000 is expected to generate the following cash flows:
Year 1 \$200,000
Year 2 \$200,000
Year 3 \$100,000
Year4 \$200,000
Year 5 \$100,000
What is the investment's payback period?

a. 7 years
b. 5 years
c. 3 years
d. 4 years

41. If the number of units produced equals the number of units sold, the number of units in ending inventory will equal the number of units in beginning inventory. .....a.True .....b.False .....
42. Actual prices or quantities greater than standard are considered favorable. .....a.True .....b.False .....
43. The overhead volume variance is a signal that the actual quantity produced was not equal to the quantity anticipated when the standard overhead rate was set. .....a.True .....b.False .....
44. Realm Company's budget indicates that 16,000 units are to be sold during September. If the company has 4,000 units on hand at the beginning of the period and plan to have 6,000 units on hand at the end of the period at the end of the month, how many units should be produced during the month? .....a.22,000 .....b.18,000 .....c.14,000 .....d.16,000 .....
45. If budgeted profit is less than the company's goals, the company should try to .....a.increase revenues and decrease expenses. .....b.incur more fixed costs and less variable costs. .....c.slow down cash receipts. d.....d.eclare bankruptcy. .....
46. Which of the following does not appear on the budgeted income statement? .....a.Cost of goods sold. .....b.Sales. .....c.Selling and administrative expenses. .....d.Accounts receivable. .....
47. Which of the following is not used in deciding how many units to produce in a period? .....a.The desired number of units in ending inventory. .....b.The expected sales in units. .....c.The number of units in beginning inventory. .....d.The number of units of raw material in inventory. .....
48. The sales budget is based on assumptions about the .....a.number of units to be sold and selling price per unit. .....b.timing of cash receipts. .....c.contribution margin per unit and the number of units to be sold. .....d.costs of the units produced and the total fixed costs. .....
49. The total variance for manufacturing overhead is .....a.the difference between the overhead applied to inventory at standard and the actual overhead costs. .....b.the difference between fixed overhead and variable overhead. .....c.less than the labor efficiency variance. .....d.only calculated if it is exceptional. .....
51. The Clarkson Company's Cargo Division is currently operating at 100% of capacity (capacity is 100,000 units). Normal selling price is \$20.00 per unit. At current operating levels, fixed costs are \$6 per unit and variable costs are \$9 per unit. Another division of Clarkson Company would like to buy from the Cargo Division. If this sale is made, \$2 per unit in variable selling and administrative costs would be saved. What is the lowest transfer price the Cargo Division should accept? .....a.\$13.00 .....b.\$18.00 .....c.\$15.00 .....d.\$7.00 .....
52. A transfer price is the price that is used to value transfers of goods and services .....a.from one subunit of a company to another subunit in the company. .....b.from Work in Process Inventory to Finished Goods Inventory in a standard costing system. .....c.from a subunit of the company to a wholesaler or retailer. .....D. back to one of the company's suppliers. .....
53. If a manager is evaluated using the return on investment, the manager may be reluctant to invest in new equipment because the investment.....a.may increase net income. .....b.will decrease the level of investment. .....c.may decrease the return on investment. .....d.is likely to have a positive net present value. .....
54. Return on investment can be improved by
.....a.increasing the profit margin.
.....b.generating more sales for each dollar invested.
c.Both A and B are correct.
d.Neither A nor B is correct.
55. Kendrick Company reported the following results for August 2011:

Sales \$7,000,000
Investment turnover 1.25
Return on investment 30%

Given this information, how much is the company's invested capital?
a. \$2,100,000
b. \$8,750,000
c. \$2,333,333
d. \$5,600,000

### Menomonie Publishing stock currently sells for \$40 per share. The company has 1,200,000 shares outstanding

Menomonie Publishing stock currently sells for \$40 per share. The company has 1,200,000 shares outstanding. What would be the effect on the number of shares outstanding and on the stock price of the following: 15% Stock Dividend 4-for-3 Stock Split Reverse 3-for-1 Stock Split Last year both Hudson Homes and Baldwin Construction earned \$1 million in net income. Both companies have assets of \$10 million. Hudson generated a return on equity of 11.1%, whereas Baldwin produced a return on equity of 20.0%. What can explain the differences in return on equity between the two companies?

### Week six OPS/571

Week six OPS/571

Operation Management Process Design for Riordan Manufacturing. Create a 1,050-word (maximum) proposal package for Riordan in which you include the following items in the proposal:

· The MRP for the manufacturing of the Riordan electric fans

· A new process design for the production of the Riordan electric fans

· A supply chain for the electric fans, taking advantage of any global opportunities available to Riordan Manufacturing such as lower labor costs

· A production forecast for the Riordan electric fans

· An implementation plan, including a Gantt chart of the design process, for the Riordan electric fans

· A cover letter detailing how you will coordinate aggregate operations planning and TQM for the Riordan electric fans

### Resource: Fundamental Accounting Principles, pp. 289, 290, and 291

CheckPoint: Accounting Information Systems and Special Journals

• Resource: Fundamental Accounting Principles, pp. 289, 290, and 291
• Due Date: Day 5 [Individual] forum
• Complete Quick Study questions QS 7-1 and QS 7-3 on p. 289, and Exercises 7-1, 7-4,
7-7, and 7-10 on pp. 290-291.

Optional Information:
Subject: Accounting 225

QUICK STUDY
QS 7-1
Accounting information system principles

Place the letter of each system principle in the blank next to its best description.
A. Control principle D. Flexibility principle
B. Relevance principle E. Cost-benefit principle
C. Compatibility principle

1. The principle prescribes the accounting information system to change in response to technological advances and competitive pressures.

2. The principle prescribes the accounting information system to help monitor activities.

3. The principle prescribes the accounting information system to provide timely information for effective decision making.

4. The principle prescribes the accounting information system to adapt to the unique characteristics of the company.

5. The principle that affects all other accounting information system principles.

QS 7-3
Accounting information system components

Identify the most likely role in an accounting system played by each of the numbered items 1 through 12 by assigning a letter from the list A through E on the left:

A. Source documents
B. Input devices
C. Information processors
D. Information storage
E. Output devices

2. Filing cabinet
3. Bank statement
4. Computer scanner
5. Computer keyboard
6. Zip drive
7. Computer monitor
8. Invoice from a supplier
9. Computer software
10. Computer printer
11. Digital camera

EXERCISES
Exercise 7-1 Sales journal—perpetual

Hutton Company uses a sales journal, a purchases journal, a cash receipts journal, a cash disbursement journal, and a general journal. The following transactions occur in the month of March:

Mar. 2 Sold merchandise costing \$300 to B. Fager for \$450 cash, invoice no. 5703.
5 Purchased \$2,300 of merchandise on credit from Marsh Corp.
7 Sold merchandise costing \$800 to J. Dryer for \$1,150, terms 2_10, n_30, invoice no. 5704.
8 Borrowed \$8,000 cash by signing a note payable to the bank.

### Chapter 2 P2-43B The trial balance for Missing Link Exploration Company does not balance

Chapter 2 P2-43B The trial balance for Missing Link Exploration Company does not balance. March 31st 2007. Cash \$6,200-debit Accounts receivable \$2000-debit Supplies \$500- debit Exploration equipment \$22,300-debit Computers \$46,000-debit Accounts Payable \$2,700- credit Note Payable \$18,300-credit Jack Ballard, capital \$50,800-credit Jack Ballard, withdrawals \$5,000-debit Service Revenue \$4,900-credit Service Expense \$1,300-debit Rent Expense \$500-debit Advertising Expense \$300-debit Utilities Expense \$200- debit Total Debits= \$84,300 Total Credits= \$76,700 The following errors were detected: A) The cash balance is overstated by \$1,000 B) Rent expense of \$350 was erroneously posted as a credit rather than a debit. C) A \$6,900 credit to Service Revenue was not posted. D) A \$600 debit to Accounts Receivable was posted as \$60 E) The balance of Utilities Expense is understated by \$60. F) A \$100 purchase of supplies on account was neither journalized nor posted. G) Exploration equipment should be listed in the amount of \$21,300. Requirement- Prepare the correct trial balance at March 31st

### The adjusted trial balance of Jacks Financial Planners appears below and using the information from the adjusted trial balance

The adjusted trial balance of Jacks Financial Planners appears below and using the information from the adjusted trial balance, you are to prepare for the month ending December 31:
1. an income statement
2. retained earnings statement
3. balance sheet
Jacks Financial Planners Adjusted Trial Balance 31-Dec-07

 Debit Credit

Cash

\$ 17,400

Accounts Receivable

2,200

Office Supplies

1,800

Office Equipment

15,000

Accumulated Depreciation - Office Equipment

\$ 4,000

Accounts Payable

4,000

Unearned Service Revenue

5,000

Common Stock

17,000

Retained Earnings

7,400

Dividends

2,500

Service Revenue

6,500

Office Supplies Expense

600

Depreciation Expense

2,500

Rent Expense

1,900

\$ 43,900

\$ 43,900

### E4-9 The adjusted trial balance for Apachi Company is presented in E4-8

E4-9 The adjusted trial balance for Apachi Company is presented in E4-8. Instructions (a) Prepare an income statement and a retained earnings statement for the year. There were noissuances of common stock during the year. (b) Prepare a classified balance sheet at July 31. APACHI COMPANY Adjusted Trial Balance July 31, 2008 No. Account Titles Debits Credits 101 Cash \$ 14,840 112 Accounts Receivable 8,780 157 Equipment 15,900 167 Accumulated Depreciation \$ 7,400 201 Accounts Payable 4,220 208 Unearned Rent Revenue 1,800 311 Common Stock 20,000 320 Retained Earnings 25,200 332 Dividends 16,000 404 Commission Revenue 65,000 429 Rent Revenue 6,500 711 Depreciation Expense 4,000 720 Salaries Expense 55,700 732 Utilities Expense 14,900 \$130,120 \$130,120

### Atoms, which contain 1, 2, or 3 electrons in their valence shells, show metallic characteristics

1. Atoms, which contain 1, 2, or 3 electrons in their valence shells, show metallic characteristics. Why do the metals of group 1 and 2 differ from transition metals, which also contain 1 or 2 electrons in the outermost shell? Support your answer with at least two examples.

2. How does an orbital defined by the quantum mechanical model differ from the orbit described by Bohr? Give at least four points

3. Complete the electronic configuration of the following: a.Fluorine (Atomic Number: 9): 1s2 2s2 _____ b.Potassium (Atomic Number: 19): 1s2 2s2 2p6__ __ __

4.Which of the following elements have an equal number of valence electrons? a.Na (Atomic Number: 11) b.O (Atomic Number: 8) c.K (Atomic Number: 19)

5. Write the number of valence electrons and valency of aluminium (Atomic Number: 13).

6. The electronic configuration of the atoms of three elements X, Y, and Z is given below. Which of these elements are metals? a: 1s2 2s1 b: 1s2 2s2 2p5 c: 1s2 2s2 2p6 3s2

### Learning is a change in behavior that is

1.Learning is a change in behavior that is: (Points: 5)

relatively permanent and due to experience.

relatively permanent and due to maturation.

absolutely permanent and due to experience.

absolutely permanent and due to maturation.

2. Classical conditioning involves learning: (Points: 5)

associations to stimuli.

behaviors through observing others.

unconditioned responses.

what rewarding behaviors are.

3. In Pavlov’s classical conditioning experiments, the neutral stimulus that comes to elicit a conditioned response is known as the: (Points: 5)

unconditioned stimulus.

conditioned stimulus.

reinforced stimulus.

unreinforced stimulus.

4. __________ refers to the category of learning in which voluntary behavior is affected by its consequences. (Points: 5)

Cognitive mapping

Classical conditioning

Operant conditioning

Superstitious learning

5. Kathy buys her groceries from a store that gives her a free gallon of milk every time she buys \$100 worth of groceries. She has been shopping at this store for years and has no desire to try a different store. Kathy’s behavior has been influenced by: (Points: 5) positive punishment.

negative punishment.

positive reinforcement.

negative reinforcement.

6. Sara’s shoes hurt her feet terribly. She took them off and immediately felt relief. She is likely to take off her shoes again when they bother her. This behavior is an example of: (Points: 5)

positive reinforcement.

Negative reinforcement.

positive punishment.

negative punishment.

7. The thought processes that underlie learning: (Points: 5)

were of great interest to behavioral theorists such as John B. Watson and B. F. Skinner. can be studied in animals when “think aloud” instructions are given can be observed using objective methods of recording.

are the main interest of cognitive psychologists

8. Suppose that you are dropped off at a large mall without money and merely wander around casually looking at the stores and displays. Later, someone asks you where a particular store is located in the mall. The fact that you can direct the person to the store indicates that __________ has occurred. (Points: 5)
behavior modification
partial learning
stimulus control training
latent learning

9. Soon after the popular people in her group started to smoke cigarettes, Barb started smoking too. Barb’s behavior is an example of what kind of learning process? (Points: 5)
Observational learning
Partial extinction
Learned helplessness
Latent learning

10. People do not always demonstrate the behaviors that they observe. According to Albert Bandura, a social cognitive psychologist, what is the key to demonstrating observed behaviors? (Points: 5)
Unconditioned stimuli
Stimuli control
Rewards
Habits

11. Encoding is the memory process primarily concerned with: (Points: 5)
getting information into memory.
retaining information over time.
taking information out of storage.
registering information with our senses.

12. In this memory process, the individual records information to prepare it to be entered into memory. (Points: 5)
Storage
Encoding
Retrieval
Priming

13. When a student took her psychology quiz, she did badly on the essay question. Earlier, she had written a good practice essay on this concept, but during the exam she could not think of the required information. The failure of which memory process led to her poor essay performance? (Points: 5)
Encoding
Retrieval
Repression
Storage

14. Material held in short term memory is typically lost after about __________ seconds unless it is shifted to long term memory. (Points: 5)
1 to 5
15 to 25
45 to 55
100 to 110

15. Dr. Doherty conducts research in which he asks his subjects to look at slides that contain arrays of objects, after which he tests the subjects’ memory of the objects on the slides. The subjects are allowed to view the slides for no more than two seconds. What type of memory is Dr. Doherty testing? (Points: 5)
Semantic memory
Elaborative rehearsal
Remote memory
Sensory memory

16. Which of the following statements about short-term memory is true? (Points: 5)
Short-term memory is a high capacity storage system that has complete representational capabilities.
Short-term memory is a low capacity storage system that has complete representational capabilities.
Short-term memory is a low capacity storage system that has incomplete representational capabilities.
Short-term memory is a high capacity storage system that has incomplete representational capabilities.

17. The process of rehearsal has what result? (Points: 5)
It helps to prolong information in short term memory but has no effect on the transfer of material into long term memory.
It extends the duration of information in short term memory and also assists its transfer into long term memory.
It facilitates neither short term memory nor long term memory.
It has no effect on short term memory duration, yet it facilitates the transfer of material into long term memory.

18. Repeatedly reciting a sequence of words: (Points: 5)
activates different brain areas than when the word sequence is spoken the first time.
is a characteristic symptom of the disorder known as Korsakoff’s syndrome.
minimizes the effects of proactive interference.
prevents trace decay from occurring.

19. Charlene flew to see her grandparents on a plane that was piloted by Janet Harris. When Charlene arrived they asked her how she enjoyed the flight. “It was a wonderful flight, and the pilot was very good. He was able to avoid turbulence.” Charlene’s inability to remember the pilot’s gender may have been influenced by: (Points: 5)
flashbulb tendencies.
jetlag.
schemas.
retrieval cues.

20. Justin’s new telephone number is 663-7589. He frequently tells people that it is 633-7589. He is puzzled as to why he keeps doing that until he realizes that the first three digits of his social security number are 633. Justin realizes that his problem is caused by: (Points: 5)
decay.
interference.
reconstruction.
serial positioning.

### If the concept is truck, the prototype might be

1. If the concept is truck, the prototype might be: (Points: 5)

a Ford pick up.

bulldozer.

gravel eighteen wheeler.

personnel carrier.

2. If the prototype is block or ball, the concept is: (Points: 5)

construction.

toy.

child.

play.

3. All major cities have a post office. Abilene is a major city; therefore, Abilene has to have a post office. This is an example of a(n): (Points: 5)

algorithm.

heuristic.

syllogism.

prototype.

4. Algorithms are very helpful in finding solutions to problems because, although we may not understand them, they: (Points: 5)

were created by people who do understand all algorithms.

allow us to arrive at an answer rapidly.

are shortcuts.

guarantee a correct solution if followed.

5. A heuristic can be very helpful in solving a problem because: (Points: 5)

the solution is always accurate.

heuristics are the result of research.

it may be a shortcut.

a single heuristic can be applied to most problems.

6. Both Albert's mother and father had dropped out of high school. His brother left school in the eighth grade. Based on the performance of his family members Albert does not expect that he will complete high school. He has developed a(n): (Points: 5) availability heuristic.

syllogism.

algorithm.

means-end analysis.

7. Creative thinking tends to be: (Points: 5)

divergent thinking.

convergent thinking.

functional fixedness.

dependent on algorithms.

8. "How are a cat and a dog alike?" An answer to this question requires: (Points: 5) crystallized intelligence.

intrapersonal intelligence.

fluid intelligence.

Eastern intelligence.

9. "Who was the first vice president of the United States?" The correct answer to this question requires: (Points: 5)

crystallized intelligence.

intrapersonal intelligence.

fluid intelligence.

Eastern intelligence.

10. Based on the theory of multiple intelligences by Gardner most people exhibit: (Points: 5)

intelligences which function in isolation.

a single intelligence.

one dominate intelligence.

all eight intelligences in different degrees.

11. The use of the lateral prefrontal cortex during intelligence testing indicates that: (Points: 5)

a global "workspace" exists in the brain.

there is little neuroflexibility.

the prefrontal cortex is the central receiving area for all incoming stimuli.

there is no significant difference between special and verbal tasks.

12. The experimental rats were being raised in separate environments. One group lived in the traditional cage in a quiet, but well lighted room. They were supplied with plenty of food and water. The second group inhabited "Rat Disney Land." There were colorful toys, exercise wheels, and mirrors. The experimenters talked to the rats in the second group and demonstrated concern. Based on the results of previous research the researchers expected: (Points: 5)

the rats in the first group to exhibit depression.

the rats in the second group to become hyperactive and unable to focus on a task.

the rats in the second group to make a higher score on an intelligence test.

the rats in the first group to make a higher score on a test of intelligence.

13. The most frequently used intelligence test in the United States is: (Points: 5)

the Stanford-Binet Scale.

the Binet Intelligence Test.

the Wechsler Adult Intelligence Scale – III.

the Bergman Intelligence Scale.

14. The Wechsler Adult Intelligence Scale –III (WAIS-III) contains two parts: (Points: 5) verbal and performance.

written and verbal.

measurement and written.

performance and written.

15. One attribute that the Stanford-Binet, WAIS-III, and WISC-IV have in common is that they are all: (Points: 5) timed.

written.

individually.

group tests.

16. The entire class was in an uproar. The teaching assistant had proctored the exam while the professor was attending a conference and the test seemed unrelated to the chapters which they had studied. The students’ complaints are based on the test's lack of: (Points: 5)

reliability.

validity.

aptitude.

standardization.

17. The testing company has hired qualified people in the field to administer the new test bank to subjects of different ages and ethnic backgrounds. They need a sizable number of scores from inner city, urban, and country/small town subjects. Their goal is to gather sufficient data for test: (Points: 5)

validity.

reliability.

performance.

standardization.

18. Nisa has grown up in a small village in the foothills. There was no electricity and water had to be hand pumped. They seldom saw people from the "outside." When she entered school the bus had to pick her up at 6:30 am in order for her to arrive at school by 8:30 am. During the fourth grade the entire class was given a group intelligence test. Nisa did not score well because: (Points: 5)

the norms upon which the test was developed did not reflect her background.

her background caused the relationship between reliability and validity to be inaccurate. she probably had difficulty learning to read.

she did not understand test taking.

19. In their book The Bell Curve, Murray and Herrnstein supported their claim of intelligence differences between races as attributable to: (Points: 5)

the effect of environment on the development of intelligence.

the extent to which intelligence is inherited.

the lack of validity of intelligence tests.

insufficient reliability of IQ scores.

20. One of the arguments against inherited racial differences in intelligence is based on data that shows: (Points: 5) a college education reduces the gap between the IQ scores of white and black races.

nutrition reduces the gap.

scores for black test takers improve as they mature.

white test takers plateau at about thirty-five-years of age.

### Urlacher Company performs the following accounting tasks during the year

ACC 280 / XACC 280

Principles of Accounting

Ch. 1 #1- Urlacher Company performs the following accounting tasks during the year. ______Analyzing and interpreting information. ______Classifying economic events. ______Explaining uses, meaning, and limitations of data. ______Keeping a systematic chronological diary of events. ______Measuring events in dollars and cents. ______Preparing accounting reports. ______Reporting information in a standard format. ______Selecting economic activities relevant to the company. ______Summarizing economic events. Accounting is “an information system that identifies, records, and communicates the economic events of an organization to interested users.” Instructions: Categorize the accounting tasks performed by Urlacher as relating to either the identification (I), recording (R), or communication (C) aspects of accounting.

### FIN 370 Final Exam

True or False Questions

1. Financial management is concerned with the maintenance and creation of wealth.
2. The current ratio and the acid test ratio are both measures of financial leverage.
3. Sales occurring in the secondary markets increase the total stock of financial assets that exist in the economy.
4. The key ingredient in a firm's financial planning is the sales forecast.
5. The present value of an annuity increases as the discount rate increases.
6. As the volume of production increases, the fixed cost per unit of the productdecreases.
7. Whenever the IRR on a project equals that project's required rate of return, the NPV equals zero.
8. The hedging principle involves matching the cash flow from an asset with the cash flow requirements of the financing used.
9. Because they operate within a highly uncertain environment, utilities hold a large percentage of their total assets in cash.
10. Accounts receivable are an asset that reflects sales made on credit.
11. Working capital for a project includes investment in fixed assets.
12. Sales captured from the firm's competitors can be relevant to the capital-budgeting decision.
13. The weighted average cost of capital is the minimum required return that must be earned on additional investment if firm value is to remain unchanged.
14. The firm financed completely with equity capital has a cost of capital equal to the required return on common stock.
15. Financial structure includes long-term and short-term sources of funds.
16. Real assets should be financed with temporary capital due to the short-term nature of depreciation expense.
17. The nature of a firm's assets has a major influence on the types of financial capital a firm uses.
18. Compared with other developed countries, the U.S. is particularly reliant on foreign trade for self-subsistence.
19. The foreign exchange market is similar in form to the New York Stock Exchange.
20. The efficiency of foreign currency markets is ensured, in large measure, by the process of arbitrageurs.
21. Foreign currency forward rates aid traders by reducing uncertainty regarding future market fluctuations.
22. Capital markets in foreign countries in general are becoming more integrated due to the widespread availability of interest rate and currency swaps.
Multiple Choice Questions
23. Which of the following statements best represents what finance is about?
a. How political, social, and economic forces affect corporations
b. Maximizing profits
c. Creation and maintenance of economic wealth
d. Reducing Risk
24. Which of the following factors enable a public corporation to grow to a greater extent, and perhaps at a faster rate, than a partnership or a proprietorship?
a. Unlimited liability of shareholders
c. Limited life
d. Elimination of double taxation on corporate income
e. All of the above
25. Which of the following decrease new competition in competitive markets?
a. Economies of scale
b. Proprietary technology
c. Product differentiation
d. Both a and b
e. All of the above
26. Kingsbury Associates has current assets as follows:
Cash \$3,000
Accounts receivable \$4,500
Inventories \$8,000
If Kingsbury has a current ratio of 3.2, what is its quick ratio?
a. 2.07
b. 1.55
c. 0.48
d. 0.96
27. Millers Metalworks, Inc. has a total asset turnover of 2.5 and a net profit margin of 3.5%. The total debt ratio for the firm is 50%. Calculate Millers's return on equity.
a. 17.5%
b. 19.5%
c. 21.5%
d. 23.5%
28. Which of the following is not a driving force of the operating profit margin?
a. The average selling price for each product
b. The ability to control all of the firm's expenses
c. The ability to control general and administrative expenses
d. The number of units of product sold
29. Where is the availability of prices most continuous?
a. Organized exchanges
b. OTC
c. FRB
d. NASDAQ
30. Which of the following refers to the institutions and procedures that provide for transactions in short-term debt instruments?
a. Capital market
b. Commercial banks
c. Money market
d. Stock market
31. A company collects 60% of its sales during the month of the sale, 30% one month after the sale, and 10% two months after the sale. The company expects sales of \$10,000 in August, \$20,000 in September, \$30,000 in October, and \$40,000 in November. How much money is expected to be collected in October?
a. \$25,000
b. \$15,000
c. \$35,000
d. None of the above
32. Which of the following is a source of external capital?
a. Retained earnings
b. Inventory
c. Long-term debt
d. Operating income (earnings before interest and taxes)
e. None of the above
33. Which of the following expenses should be included as a cash outlay in the preparation of a cash budget?
a. The payment of accounts payable
b. The payment of depreciation expense
c. The payment of accrued income taxes
d. All of the above
e. None of the above
34. At 8% compounded annually, how long will it take \$750 to double?
a. 6.5 years
b. 48 months
c. 9 years
d. 12 years
35. You wish to borrow \$2,000 to be repaid in 12 monthly installments of \$189.12. The annual interest rate is:
a. 24%.
b. 8%.
c. 18%.
d. 12%.
36. Which of the following formulas represents the future value of \$500 invested at 8% compounded quarterly for five years?
a. 500(1+.08)5
b. 500(1+.08)20
c. 500(1+.02)5
d. 500(1+.02)20
37. Which of the following is NOT an example of variable costs?
a. Packaging
b. Depreciation
c. Direct labor
d. Freight costs on products
38. Financial leverage means financing some of a firm's assets with:
a. commercial paper.
b. preferred stock.
c. corporate bonds.
d. all of the above.
39. The NPV assumes cash flows are reinvested at the:
a. IRR.
b. NPV.
c. real rate of return.
d. cost of capital.
40. A project has an initial outlay of \$4,000. It has a single payoff at the end of Year 4 of \$6,996.46. What is the IRR for the project (round to the nearest percent)?
a. 16%
b. 13%
c. 21%
d. 15%
41. An increase in ___________________ would increase a firm's liquidity.
a. notes payable
b. inventories
c. cash
d. both b and c
e. all of the above
42. A quite risky working capital management policy would have a high ratio of:
a. short-term debt to bonds and equity.
b. short-term debt to total debt.
c. bonds to property, plant, and equipment.
d. short-term debt to equity.
43. The precautionary motive for holding cash assumes that balances are held:
a. to satisfy the need for cash that arises in the ordinary course of doing business.
b. to satisfy possible but as yet indefinite needs.
c. as a precaution against missing possible profit-making opportunities.
d. for speculative purposes.
44. The primary concern in the management of cash and marketable securities for an operating company is to:
a. be profitable.
b. balance liquidity needs against investment opportunities.
c. keep enough cash on hand to buy a competitor if it becomes available.
d. both a and c.
e. all of the above.
45. Which of the following is considered to be a spontaneous source of financing?
a. Operating leases
b. Accounts receivable
c. Inventory
d. Accounts payable
46. The purpose of carrying inventory is to:
a. make different production processes more dependent on sales.
b. make sales more independent of the production process.
c. have collateral for loans.
d. improve the current ratio.
47. The net present value always provides the correct decision provided that:
a. cash flows are constant over the asset's life.
b. the required rate of return is greater than the internal rate of return.
c. capital rationing is not imposed.
d. the internal rate of return is positive.
48. When selecting the best project from a group of mutually exclusive projects you should choose the project with the highest:
a. net present value.
b. internal rate of return.
c. accounting rate of return.
d. payback.
49. The most expensive source of capital is:
a. preferred stock.
b. new common stock.
c. debt.
d. retained earnings.
50. When calculating the average cost of capital, which of the following has to be adjusted for taxes?
a. Common stock
b. Retained earnings
c. Debt
d. Preferred stock

acc week