Assignment 1: LASA 2: Conducting and Analyzing Statistical Tests

A study wants to examine the relationship between student anxiety for an exam and the number of hours studied. The data is as follows:
Student Anxiety Scores
Study Hours
5
1
10
6
5
2
11
8
12
5
4
1
3
4
2
6
6
5
1
2
  1. Why is a correlation the most appropriate statistic?
  2. What is the null and alternate hypothesis?
  3. What is the correlation between student anxiety scores and number of study hours? Select alpha and interpret your findings. Make sure to note whether it is significant or not and what the effect size is.
  4. How would you interpret this?
  5. What is the probability of a type I error? What does this mean?
  6. How would you use this same information but set it up in a way that allows you to conduct a t-test? An ANOVA?  




Assignment 2: Analyzing with ANOVA

Submit your answers to the following questions using the ANOVA source table below. The table depicts a two-way ANOVA in which gender has two groups (male and female), marital status has three groups (married, single never married, divorced), and the means refer to happiness scores (n = 100):
  1. What is/are the independent variable(s)? What is/are the dependent variable(s)?
  2. What would be an appropriate null hypothesis? Alternate hypothesis?
  3. What are the degrees of freedom for 1) gender, 2) marital status, 3) interaction between gender and marital status, and 4) error or within variance?
  4. Calculate the mean square for 1) gender, 2) marital status, 3) interaction between gender and marital status, and 4) error or within variance.
  5. Calculate the F ratio for 1) gender, 2) marital status, and 3) interaction between gender and marital status.
  6. Identify the criterion Fs at alpha = .05 for 1) gender, 2) marital status, and 3) interaction between gender and marital status.
  7. If alpha is set at .05, what conclusions can you make?

Source
Sum of Squares
(degrees of freedom [df])
Mean Square
Fobt.
Fcrit.
Gender
68.15
?
?
?
?
Marital Status
127.37
?
?
?
?
Gender * Marital Status (A x B)
41.90
?
?
?
?
Error (Within)
864.82
?
?
NA
NA
Total
1102.24
99
NA
NA
NA


GTB Inc. has a 25 percent tax rate and has $85,176,000 in assets

GTB, Inc., has a 25 percent tax rate and has $85,176,000 in assets, currently financed entirely with equity. Equity is worth $6 per share, and book value of equity is equal to market value of equity. Also, let’s assume that the firm’s expected values for EBIT depend upon which state of the economy occurs this year, with the possible values of EBIT and their associated probabilities as shown below:

State Pessimistic Optimistic
Probability of state 0.36 0.64
Expected EBIT in state $ 4.10 million $ 18.10 million

The firm is considering switching to a 25-percent-debt capital structure, and has determined that it would have to pay a 9 percent yield on perpetual debt in either event.

What will be the break-even level of EBIT?

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060322RR Answered 25 A+ Updated

1. Calculate the optional bodily injury cost for the following:
Class:10
Optional Bodily Injury 100/300/50
A. $94
B. $144
C. $108
D. $187

2. Calculate the median from the following numbers: 16 + 9 + 10 + 5 + 4.
A. 9
B. 10
C. 4
D. 5

3. Assume the mean useful life of a particular light bulb is 2,000 hours, which is normally distributed with a standard deviation of 300 hours. What is the range of the useful life of light bulbs within two standard deviations of the mean.
A. Between 1,700 and 2,300 hours
B. Longer than 1,700 hours
C. Longer than 2,300 hours
D. Between 1,400 and 2,600 hours

4. To avoid distortion of extreme values, a good indicator would be the
A. Weighted-mean
B. Mode.
C. Mean.
D. Median.

5. In terms of premium cost, the most expensive type of insurance is ______ insurance.
A. Term
B. 20-year endowment
C. 20 payment life
D. Straight-life

6. Commissions charged on the trading of stock are
A. Charged on buying and selling of stock.
B. Fixed.
C. Charged only on buying of stock
D. Charged only on sale of stock.

7. Suppose Department A is 8,000 square feet, Department B is 5,000 square feet, and Department c is 6,000 square feet. What is the percent of overhead expense applied to Department C? (Round your answer to the nearest whole percent.)
A. 26%
B. 68%
C. 32%
D. 42%

8. Which one of the following statements is true of specific identification?
A. The specific purchase invoice prices aren’t used.
B. Ending inventory isn’t associated with specific purchase price
C. Low-cost items aren’t used in this method.
D. Flow of goods and flow of cost are the same

9. The weighted-average method is best used
A. For homogeneous products.
B. For heterogeneous products.
C. Only for grains.
D. Only for fuels.

10. The tax rate of $.6943 in decimal can be expressed per $100 as
A. $690.3
B. $69.43 mills
C. $69.43
D. $6.943

11. Bee Sting bought 400 shares of Google at $399.75 per share. Assume a commission of 2% of the purchase price. What is the total of Bee?
A. $163,098
B. $156,702
C. $163,980
D. $159,900

12. The building of Jim’s Hardware is assessed at $109,000. The tax rate is $86.95 per 1,000 of assessed valuation. The tax due is
A. $947.75
B. $8,695.45
C. $9,477.55
D. $8,659.54
E. $94,698.23

13. An auto insurance premium may be partially based on the
A. Attitude of the driver.
B. Expected life of the car.
C. Make of the car.
D. Number of years one expects to drive a car.

14. A bond quote of 82.25 in dollars is equal to
A. $8.25
B. 82.25
C. $8,025.50
D. $822.50

15. Which one of the following statements is true of preferred stock?
A. It never has a preference to dividends over common stockholders.
B. It can be cumulative.
C. It has equal rights to common stock.
D. It never receives dividends in arrears.

16. Which one of the following statements is true about reduced paid-up insurance?
A. It results in a face amount less than the original amount.
B. It means the original face amount is continued for a certain number of years.
C. It buys protection with paying new premiums.
D. It continues for 20 years.

17. The range of 35, 22, 43, 18, 22, 27, 48, 39, 31, and 16 is
A. 30.
B. 29.
C. 22.
D. 32.

18. What is the retail method?
A. It aids a company in not having to calculate an inventory cost for each individual item.
B. It’s not an estimate
C. It eliminates the need to take a physical inventory
D. It doesn’t require a cost ratio.

19. The cost ratio in retail method is found by the cost of goods available for sale at cost divided by the
A. Net purchases at cost.
B. Net sales.
C. Cost of goods available for sale at retail.
D. Ending inventory at retail.

20. Jim opened a new pizza shop. He insures his store for $90,000.00 for fire. What is his premium if the rate per $100.00 is $0.83?
A. $700.00
B. $74,700.00
C. $747.00
D. $74.70

21. Matt Miller, age 28, takes out $50,000 of straight-life insurance. His annual premium is $418.20. Using the tables in the Business Math Handbook that accompanies the course textbook, determine the cash value of his policy at the end of 20 years.
A. $26,000
B. $26,500
C. $30,000
D. $13,250

22. Kris bought a new fur coat for $8,000. She must pay 5% sales tax and 7% excise tax. The furrier is shipping the coat, so Kris must also pay a $15 insurance charge. What is the total purchase price of the coat?
A. $8,960
B. $8,560
C. $8,400
D. $8,975

23. Mike’s condo has a market value of $310,000. The property in Mike’s area is assessed at 40% of the market value. The tax rate is $145.10 per $1,000 of assessed valuation. The tax for Mike is
A. $16,992.40
B. $7,999.30
C. $17,992.40
D. $7,999.40

24. Usually, assessed value is rounded to the nearest
A. Percent.
B. Cent.
C. Tenth.
D. Dollar.

25. Determine the mode from the following numbers: 71, 3, 13, 33, 3, 71, 14, 33, 13, and 33.
A. 33
B. 13
C. 71

D. 3

Briarcrest Condiments is a spice-making firm

Question 1
Briarcrest Condiments is a spice-making firm. Recently, it developed a new process for producing spices. The process requires new machinery that would cost $1,968,450. have a life of five years, and would produce the cash flows shown in the following table.
Year
Cash Flow
1
$512,496
2
-242,637
3
814,558
4
887,225
5
712,642

What is the NPV if the discount rate is 15.9 percent?
(Enter negative amounts using negative sign e.g. -45.25. Round answer to 2 decimal places, e.g. 15.25.)
NPV is
$http://edugen.wiley.com/edugen/art2/common/pixel.gif

Question 2
Archer Daniels Midland Company is considering buying a new farm that it plans to operate for 10 years. The farm will require an initial investment of $12.00 million. This investment will consist of $2.00 million for land and $10.00 million for trucks and other equipment. The land, all trucks, and all other equipment is expected to be sold at the end of 10 years at a price of $5.00 million, $2.00 million above book value. The farm is expected to produce revenue of $2.00 million each year, and annual cash flow from operations equals $1.80 million. The marginal tax rate is 35 percent, and the appropriate discount rate is 10 percent. Calculate the NPV of this investment. (Round intermediate calculations and final answer to 2 decimal places, e.g. 15.25.)
NPV
$http://edugen.wiley.com/edugen/art2/common/pixel.gif

The project should be
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Question 3
Bell Mountain Vineyards is considering updating its current manual accounting system with a high-end electronic system. While the new accounting system would save the company money, the cost of the system continues to decline. The Bell Mountain’s opportunity cost of capital is 10 percent, and the costs and values of investments made at different times in the future are as follows:
Year
Cost
Value of Future Savings
(at time of purchase)
0
$5,000
$7,000
1
4,500
7,000
2
4,000
7,000
3
3,600
7,000
4
3,300
7,000
5
3,100
7,000
Calculate the NPV of each choice. (Round answers to the nearest whole dollar, e.g. 5,275.)
The NPV of each choice is:
NPV0 = $http://edugen.wiley.com/edugen/art2/common/pixel.gif
NPV1 = $http://edugen.wiley.com/edugen/art2/common/pixel.gif
NPV2 = $http://edugen.wiley.com/edugen/art2/common/pixel.gif
NPV3 = $http://edugen.wiley.com/edugen/art2/common/pixel.gif
NPV4 = $http://edugen.wiley.com/edugen/art2/common/pixel.gif
NPV5 = $http://edugen.wiley.com/edugen/art2/common/pixel.gif
Suggest when should Bell Mountain buy the new accounting system?
Bell Mountain should purchase the system in http://edugen.wiley.com/edugen/art2/common/pixel.gif.

Question 4
Chip’s Home Brew Whiskey management forecasts that if the firm sells each bottle of Snake-Bite for $20, then the demand for the product will be 15,000 bottles per year, whereas sales will be 90 percent as high if the price is raised 10 percent. Chip’s variable cost per bottle is $10, and the total fixed cash cost for the year is $100,000. Depreciation and amortization charges are $20,000, and the firm has a 30 percent marginal tax rate. Management anticipates an increased working capital need of $3,000 for the year. What will be the effect of the price increase on the firm’s FCF for the year? (Round answers to nearest whole dollar, e.g. 5,275.)
At $20 per bottle the Chip’s FCF is $http://edugen.wiley.com/edugen/art2/common/pixel.gif and at the new price Chip’s FCF is $http://edugen.wiley.com/edugen/art2/common/pixel.gif.

Question 5
Capital Co. has a capital structure, based on current market values, that consists of 50 percent debt, 10 percent preferred stock, and 40 percent common stock. If the returns required by investors are 8 percent, 10 percent, and 15 percent for the debt, preferred stock, and common stock, respectively, what is Capital’s after-tax WACC? Assume that the firm’s marginal tax rate is 40 percent. (Round intermediate calculations to 4 decimal places, e.g. 1.2514 and final answer to 2 decimal places, e.g. 15.25%.)
After tax WACC
=
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The bank account as a control device helps to protect cash

The bank account as a control device helps to protect cash. One of the requirements is to conduct periodic bank statement reconciliations. Using the following data, complete the bank statement reconciliation.
Use the information below to prepare the bank reconciliation for Collier Cleaners for the month of September. 

· The bank statement indicated bank service charges of $63. 
· Outstanding checks as of September 30 amounted to $1,405.
· Deposits in transit as of September 30 amounted to $2,769.
· The ending balance per the September bank statement is $40,753.
· Collier Cleaners bookkeeper mistakenly recorded a $1,610 cash disbursement as $1,160 for Office Supplies on check #2402.
· The bank mistakenly recorded a deposit of $2,800 as $280 on February 17.
· The bank made an EFT payment on behalf of the company for Insurance for $3,200.
· Bank collected rent of $3,000 and a note, for $16,450, including interest of $450.
· The ending cash balance per the books for September before any adjustments was 28,900.


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Kaplan GB519 Unit 6 Final Exam




Kaplan GB519 Unit 6 Final A+ Answers: Click HERE


1. The strategy map is a tool that is used: (Points : 2) 
as one of the key aspects of the contemporary management environment
to enhance the sustainability of the organization
to link the perspectives of the balanced scorecard
to organize the critical success factors of a company

2. Value activities can best be defined as: (Points : 2) 
Activities that firms in the industry must perform to improve a product.
Activities that firms in the industry must perform in the process of converting raw material to final product, including customer service.
Activities that firms in the industry must perform in the process of closing down a product line, including customer service.
Activities that firms in the industry must perform to consider ways of marketing a product.

3. In a local factory, employees are rewarded for finding new and better ways of changing the way they work. This company is motivating its employees to use what management technique? (Points : 2) 
Benchmarking.
Activity-Based Costing.
Theory of Constraints.
Continuous Improvement.
Total Quality Management.


4. A firm succeeds on its ability to deliver products to customers more quickly than rival companies in its industry. This skill is an example of the firm's: (Points : 2) 
Core competency.
Research effectiveness.
Production efficiency.
Cost control effectiveness.


5. Using value-chain analysis, a firm can develop a competitive advantage by specifically looking for ways to: (Points : 2) 
Add value and reduce cost.
Improve manufacturing productivity.
Improve customer service.
Improve product quality.


6. Assume the following information pertaining to a Company:

Prime costs = $195,000
Conversion Costs = $221,000
Direct Materials used = $85,000
Beginning Work-in-Process = $98,000
Ending Work-in-Process = $81,000

Cost of goods manufactured is calculated to be: (Points : 2) 
$289,000.
$348,000.
$314,000.
$297,000.
$323,000.


7. Tierney Construction, Inc. recently lost a portion of its financial records in an office theft. The following accounting information remained in the office files:

COGS = $80,000
WIP Inventory – January 1. = $18,500
WIP Inventory – December 31 = $14,500
Selling & Administrative Expenses = $16,000
Net Income = $30,000
Factory O/H = $20,000
Direct Materials Inventory, January 1= $26,000
Direct Materials Inventory, December 31= $14,000
COGM = $98,000
Finished Goods Inventory, January 1 = 31,000

Direct labor cost incurred during the period amounted to 2.5 times the factory overhead. The CFO of Tierney Construction, Inc. has asked you to recalculate the following accounts and to report to him by the end of tomorrow.

What should be the amount of direct materials used? (Points : 2) 
$15,000.
$29,000.
$20,000.
$24,000.


8. Process cost systems are used in all of the following industries except: (Points : 2) 
Chemicals.
Ship building.
Oil refining.
Textiles.
Steel.


9. Multistage ABC is used when: (Points : 2) 
There are many departments in the organization.
Management wants a higher level of accuracy from the ABC calculations.
There are complex relationships among the activities.
To simplify the ABC calculations.


10. The primary focus of job costing in service industries is on: (Points : 2) 
Direct materials.
Direct labor.
Indirect materials.
Supplies.
Factory overhead.


11. Abnormal spoilage: (Points : 2) 
Is considered part of good production.
Arises under efficient operating conditions.
Is controllable in the short run.
Is unacceptable spoilage that should not occur under efficient operating conditions.
Is part of inventory product cost.


12. Job costing in service industries uses recording procedures and accounts similar to those illustrated in the chapter except for: (Points : 2) 
Direct labor.
Overhead costs.
Direct materials.
Cost drivers.


13. Randall Company manufactures products to customer specifications. A job costing system is used to accumulate production costs. Factory overhead cost was applied at 125% of direct labor cost. Selected data concerning the past year's operation of the company are presented below.

Direct Materials January 1 = $77,000
Direct Materials December 31 = 40,000

WIP January 1 = 66,000
WIP December 31 = 42,000
Finished Goods January 1 = 115,000
Finished Goods December 31 = 100,000

Other Information:
Direct Materials Purchased = $324,000
Cost of Goods Available for Sale = 950,000
Actual Factory Overhead = 206,000

The cost of goods manufactured during the year is: (Points : 2) 
$850,000.
$348,000.
$672,000.
$835,000.
$811,000.
14. ABC Company uses a Materials Inventory account to record both direct and indirect materials. ABC charges direct materials to WIP, while indirect materials are charged to the Factory Overhead account. During the month of April, the company has the following cost information:

Total Materials (Direct and Indirect) Purchased = $ 90,000
Indirect Materials Issued to Production = 30,000
Total Materials Issued to Production = 110,000
Beginning Materials Inventory = 50,000

The ending materials inventory cost is: (Points : 2) 
$110,000.
$30,000.
$90,000.
$80,000.


15. Which of the following is an example of a physical measure used in the physical measure method? (Points : 2) 
Pounds.
Minutes.
Seconds.
Dollars.
Volume.


16. Joint products are products that: (Points : 2) 
Have minor total sales value.
Have substantial sales value.
Come from different production processes.
Are marketed in a joint marketing program.


17. Data collected on the cost objects and cost drivers for cost estimation must be: (Points : 2) 
Brief and limited.
Exhaustive.
Concrete.
Consistent and accurate.
Varied.


18. The p-value measures: (Points : 2) 
The probability that the regression equation is reliable.
The statistical significance of the dependent variable.
The risk that a particular independent variable has only a chance relationship to the dependent variable.
The confidence range around the regression prediction.


19. Firm X has a production process that has a total joint cost of $15,000. At the split-off point, there are 2,000 pounds of Product 1 and 3,000 pounds of Product 2. What is the cost per pound of Product 1 using the physical measure method? (Points : 2) 
$2.50.
$3.00.
$3.50.
$4.00.


20. Cleaning Care Inc. expects to sell 10,000 mops. Fixed costs (for the year) are expected to be $10,000, unit sales price is expected to be $12, and unit variable costs are budgeted at $7.

Cleaning Care's margin of safety (MOS) in units is: (Points : 2) 
1,000.
2,000.
4,000.
8,000.
9,000.


21. Stylish Sitting is a retailer of office chairs located in San Francisco, California. Due to increased market competition, the CFO of Stylish Sitting has grown worried about the firm's upcoming income stream. The CFO asked you to use the company financial information provided below.

Sales Price $75.00
Per Unit Variable Costs:
Invoice Cost 41.70
Sales Commission 18.30
Total Per Unit Variable Cost $60.00
Fixed Costs:
Advertising $ 56,000
Rent 78,000
Salaries 226,000
Total Annual Fixed Costs $360,000 

If 40,000 office chairs were sold, Stylish Sitting's operating income would be: (Points : 2) 
$240,000.
$280,000.
$210,000.
$340,000.
$120,000.
22. In deciding between alternative choices for a given situation, managers usually employ a five-step process. Which of the following is not a step in the decision-making process? (Points : 2) 
Evaluate performance.
Specify the criteria and identify the alternative actions.
Select and implement the best course of action.
Perform relevant and strategic cost analysis.
Review the audit report.


23. Which of the following is NOT one of the more common strategic benefits provided by capital investment projects? (Points : 2) 
Being able to deliver a product that competitors cannot (i.e., product differentiation).
Improving product quality.
Reducing manufacturing cycle time.
Reducing the number of short-term (i.e., operational) decisions that management must make.
Providing significant cost reductions, in terms of production and/or marketing costs.


24. To make a decision whether to accept or reject a special sales order, managers need critical information about all the following except: (Points : 2) 
Relevant costs.
Prior period operating costs.
Any opportunity costs.
The strategic, competitive environment of the firm.


25. One of the key management functions is to perform a regular review of product profitability. Which (s) below would not be asked when performing the analysis? (Points : 2) 
Are the products priced properly?
Which products are the most profitable?
Which products should be advertised more aggressively?
Should any product manager be rewarded?
What was the product manager paid last year?

 26. 26. For a typical capital investment project, the bulk of the investment-related cash outflow occurs: (Points : 2) 
During the initiation stage of the project (i.e., at time period 0).
During the operation stage of the project.
Either during the initiation stage or the operation stage.
During neither the initiation stage nor the operation stage.
Evenly during all three stages: initiation, operation, and final disposal.


27. Pique Corporation wants to purchase a new machine for $300,000. Management predicts that the machine can produce sales of $200,000 each year for the next 5 years. Expenses are expected to include direct materials, direct labor, and factory overhead (excluding depreciation) totaling $80,000 per year. The firm uses straight-line depreciation with no residual value for all depreciable assets. Pique's combined income tax rate is 40%. Management requires a minimum after-tax rate of return of 10% on all investments.

What is the net present value (NPV) of the investment? (The PV annuity factor for 5 years, 10% is 3.791.) Assume that the cash inflows occur at year-end. (Points : 2) 
($270,480).
$63,936.
$109,428.
$154,920.


28. Carmino Company is considering an investment in equipment that will generate an after-tax income of $6,000 for each year of its four-year life. The asset has no salvage value. The firm is in the 40% tax bracket. The net book value (NBV) of the investment at the beginning of each year will be as follows:

Year 1 = $30,000
Year 2 = 15,000
Year 3 = 7,500
Year 4 = 3,750

The amount of after-tax cash inflow from the asset in Year 3 is: (Points : 2) 
$6,600.
$7,500.
$8,100.
$9,000.
$9,750.


29. Traditional financial control systems have recently been criticized because: (Points : 2) 
They use flexible, not static, budgets.
They generally lead to goal-congruent behavior on the part of managers.
They focus more in improving basic business processes than short-term financial results.
They fail to incorporate nonfinancial performance indicators into the evaluation process.


30. Electronic Component Company (ECC) is a producer of high-end video and music equipment. ECC currently sells its top of the line "ECC" DVD player for a price of $250. It costs ECC $210 to make the player. ECC's main competitor is coming to market with a new DVD player that will sell for a price of $220. ECC feels that it must reduce its price to $220 in order to compete. The sales and marketing department of ECC believes the reduced price will cause sales to increase by 15%. ECC currently sells 200,000 DVD players per year.

Assuming sales and marketing are not correct in their estimation and the volume of sales is not changed and ECC meets the competitive price, what is the target cost if ECC wants to maintain its same income level? (Points : 2) 
$210.
$200.
$190.
$180.
31. The difference between the flexible-budget operating income and the actual operating income in a period is the: (Points : 2) 
Sales mix variance.
Sales volume variance.
Sales price variance.
Operating income flexible-budget variance.


32. Reduced time-to-market, reduced expected service cost, and ease-of-manufacture are critical success factors at which stage of the cost life cycle? (Points : 2) 
R&D.
Product planning and scheduling.
Product design.
Manufacturing.


33. The difference between the actual fixed overhead cost incurred during a period and the budgeted fixed overhead cost for the period is the: (Points : 2) 
Fixed overhead efficiency variance.
Fixed overhead production-volume variance.
Fixed overhead spending variance.
Fixed overhead rate variance.
Fixed overhead sales-volume variance.


34. Operational control has a management-by-exception approach in contrast to management control, which is more consistent with: (Points : 2) 
The management-by-incentives approach.
The management-by-objectives approach.
The "hands off" approach.
A non-quantitative set of measures.
A non-qualitative set of measures.


35. Information concerning Johnston Co.'s direct materials costs is as follows:

Standard $ per Lb. $ 6.45
Actual Lbs. Purchased 2,850
Actual Lbs. Used in production 2,750
Units of Material Produced 700
Materials Purchase Price Variance $ 855(F)
Budget Data for the Period:
Units to Manufacture 1,000
Units of DM 4,000 Lbs.

The actual purchase price per pound of direct materials is: (Points : 2) 
$6.12.
$6.15.
$6.50.
$6.75.
$7.13.


36. The need for coordination between the production and the selling function will impact the choice of: (Points : 2) 
Profit, cost or revenue center.
Manager for the firm.
Formal or informal control systems.
Profitability goal for the firm.
Control measures to prevent fraud.


37. Controllable margin is determined by subtracting short-term controllable fixed costs from the: (Points : 2) 
Long-term controllable fixed cost.
Contribution margin.
Variable costs.
Fixed costs.
Variable costs and fixed costs.


38. Of most relevance in deciding how or which costs should be assigned to an SBU is the degree of: (Points : 2) 
Avoidability.
Causality.
Controllability.
Reliability.


39. Of the three basic forms of management compensation (salary, bonus, benefits), the fastest growing part of total compensation is: (Points : 2) 
Salary.
Bonus.
Benefits.
Salary and bonus.


40. SBU is the acronym for: (Points : 2) 
Small Business Unit.
Sustainable Business Unit.
Standard Business Unit.
Strategic Business Unit.
41. The most important objective of a strategic performance measurement system is: (Points : 2) 
Budgeting.
Motivation.
Authority.
Variances.
Pricing.


42. The objectives of management compensation, when compared to the objectives used to develop performance measurement systems, are: (Points : 2) 
More numerous.
Less specific.
Consistent in their objectives.
Significantly broader in scope.
More specific.


43. Jackson Supply Company has a 2 to 1 current ratio. This ratio would increase to more than 2 to 1 if the company: (Points : 2) 
Purchased a marketable security for cash.
Wrote off an uncollectible receivable.
Sold merchandise on account that earned a normal gross margin.
Purchased inventory on account.
 44. 44. A company had income of $50,000 using variable costing for a given period. Beginning and ending inventories for that period were 80,000 units and 90,000 units, respectively. If the fixed overhead application rate were $10.00 per unit, what would operating income have been using full costing? (Points : 2) 
$(50,000).
$170,000.
$150,000.
$0.
Cannot be determined from the information given.

45. A method for determining a bonus based upon the performance of the unit is a(n): (Points : 2) 
Segment-based pool.
Unit-based pool.
Firm-based pool.
Activity-based pool.
Function-based pool.

46. Which one of the following has been the most common payment option for bonus compensation in recent years? (Points : 2) 
Vacation time.
Stock options.
Increased benefits.
Salary increase.

47. EVA is calculated as: (Points : 2) 
EVA Net Income - (Cost of Capital x EVA Invested Capital).
Total Net Income - (Cost of Capital x Invested Capital).
Gross Income - Cost of Capital.
Total Net Income - EVA Net Income.
Accounting earnings adjusted for EVA. 

48. The King Mattress Company had the following operating results for 2012-2013. In addition, the company paid dividends in both 2012 and 2013 of $60,000 per year and made capital expenditures in both years of $30,000 per year. The company's stock price in 2012 was $8 and $7 in 2013. The industry average earnings multiple for the mattress industry was 9 in 2013 and the free cash flow and sales multiples were 18 and 1.5, respectively. The company is publicly owned and has 1,200,000 shares of outstanding stock at the end of 2013.

Balance Sheet, December 31
2013 2012
Cash $ 340,000 $ 100,000
Accounts Receivable 350,000 400,000
Inventory 250,000 300,000
Total Current Assets $ 940,000 $ 800,000
Long Lived Assets 1,080,000 1,100,000
Total Assets $ 2,020,000 $ 1,900,000
Current Liabilities $ 200,000 $ 300,000
Long-Term Liabilities 600,000 500,000
Stockholder’s Equity 1,220,000 1,100,000
Total Liabilities & Equity $ 2,020,000 $ 1,900,000

Income Statement for the Year Ended December 31
Sales $ 4,750,000 $ 4,500,000
Cost of Sales 4,100,000 4,000,000 
Gross Margin $ 650,000 $ 500,000
Operating Expenses 350,000 400,000
Operating Income $ 300,000 $ 100,000
Taxes 120,000 40,000
Net Income $ 180,000 $ 60,000 


Cash Flow from Operations
Net Income $ 180,000 $ 60,000
Plus Depreciation Expense 50,000 50,000
+Decrease (-Inc) in A/T and Inventory 100,000 - 0 -
+Increase (-Dec) in Current Liabilities (100,000) - 0 –
Cash Flow from Operations $ 230,000 $ 110,000

The inventory turnover rat
The inventory turnover ratio for 2013 is (rounded): (Points : 2) 
11.2
12.7
13.7
14.9
49. The King Mattress Company had the following operating results for 2012-2013. In addition, the company paid dividends in both 2012 and 2013 of $60,000 per year and made capital expenditures in both years of $30,000 per year. The company's stock price in 2012 was $8 and $7 in 2013. The industry average earnings multiple for the mattress industry was 9 in 2013 and the free cash flow and sales multiples were 18 and 1.5, respectively. The company is publicly owned and has 1,200,000 shares of outstanding stock at the end of 2013.

Balance Sheet, December 31
2013 2012
Cash $ 340,000 $ 100,000
Accounts Receivable 350,000 400,000
Inventory 250,000 300,000
Total Current Assets $ 940,000 $ 800,000
Long Lived Assets 1,080,000 1,100,000
Total Assets $ 2,020,000 $ 1,900,000
Current Liabilities $ 200,000 $ 300,000
Long-Term Liabilities 600,000 500,000
Stockholder’s Equity 1,220,000 1,100,000
Total Liabilities & Equity $ 2,020,000 $ 1,900,000
Income Statement for the Year Ended December 31
Sales $ 4,750,000 $ 4,500,000
Cost of Sales 4,100,000 4,000,000 
Gross Margin $ 650,000 $ 500,000
Operating Expenses 350,000 400,000
Operating Income $ 300,000 $ 100,000
Taxes 120,000 40,000
Net Income $ 180,000 $ 60,000 
Cash Flow from Operations
Net Income $ 180,000 $ 60,000
Plus Depreciation Expense 50,000 50,000
+Decrease (-Inc) in A/T and Inventory 100,000 - 0 -
+Increase (-Dec) in Current Liabilities (100,000) - 0 –
Cash Flow from Operations $ 230,000 $ 110,000

The current ratio for 2013 is: (Points : 2) 
1.8
2.0
3.9
4.7


50. During October, Rover Industries produced 35,000 units of product with costs as follows:
DM = $ 84,000
DL = 43,000
Variable O/H = 13,000
Fixed O/H = 147,000
Total =$ 287,000
What is Rover's unit cost for October, calculated on the variable costing basis? (Points : 2) 
$3.25.
$3.75.
$4.00.
$4.50.
$5.00.

Kaplan GB519 Unit 6 Final A+ Answers: Click HERE





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