ADVANCED ANALYSIS Assume the following values for Figures 4.4a and 4.4b: Q1 = 20 bags. Q2 = 15 bags. Q3 = 27 bags. The market eq

Answer:

A.

a. Dr Cash $2,300,000

Cr Notes payable $2,300,000

b. Dr Equipment $98,000

Cr Cash $98,000

c.Dr Inventory $35,000

Cr Accounts payable $35,000

D. Dr Repair expense $62,000

Cr Cash $62,000

e. Dr Cash $390,000

Cr Unearned revenue $390,000

f. Dr Accounts receivable $700

Cr Sales revenue $700

Dr Cost of of goods sold $400

Cr Inventory $400

g. Dr Cash $320,000

Cr Sales revenue $320,000

h. Dr Cash $3,500

Cr Unearned revenue-deposit $3,500

i. Dr Accounts payable $17,500

Cr Cash $17,500

j. Dr Cash $400

Cr Accounts receivable $400

k. Dr Wages expense $245,000

Cr Cash $245,000

B. $1,300

Explanation:

A. Preparation of Journal entries

a. Dr Cash $2,300,000

Cr Notes payable $2,300,000

[To acknowledge cash borrowed from the bank]

b. Dr Equipment $98,000

Cr Cash $98,000

[To record acquisition of a snowplow]

c.Dr Inventory $35,000

Cr Accounts payable $35,000

[To log purchase of inventory on credit]

D. Dr Repair expense $62,000

Cr Cash $62,000

[For payment of repair expenses]

e. Dr Cash $390,000

Cr Unearned revenue $390,000

[For sale of seasonal passes]

f. Dr Accounts receivable $700

Cr Sales revenue $700

[To record sales on credit]

Dr Cost of goods sold $400

Cr Inventory $400

[To record associated costs]

g. Dr Cash $320,000

Cr Sales revenue $320,000

[To document sales ]

h. Dr Cash $3,500

Cr Unearned revenue-deposit $3,500

[To log customer deposits]

i. Dr Accounts payable $17,500

[35,000 x 1/2]

Cr Cash $17,500

[For recording cash payments toward accounts payable]

j. Dr Cash $400

Cr Accounts receivable $400

[To log customer payments]

k. Dr Wages expense $245,000

Cr Cash $245,000

[To acknowledge wage payments]

B. To determine the ending balance in the Accounts Receivable account as of the end of December

Beginning Accounts Receivable 1,000

Add: Sales on account 700

Less: Cash received on account -400

Ending balance in Accounts Receivable $1,300

Consequently, the final balance in the Accounts Receivable by the end of December will amount to $1,300

Answer:

• As explained below, with the individual’s score in the 0.03125 fraction of top candidates, they can anticipate securing a position.

Explanation:

Utilizing Chebyshev’s Theorem is key.

This theorem is valid for any dataset, irrespective of its shape.

Chebyshev's Theorem states that at least 1−1/k² of the data falls within k standard deviations from the mean.

For this data set, the specifics are:

• mean: 60
• standard deviation: 6
• score: 84

The number of standard deviations that 84 is from the mean can be calculated as:

• k = (score - mean) / standard deviation
• k = (84 - 60) / 6 = 24 / 6 = 4

Hence, the individual’s score is 4 standard deviations above the mean.

How significant is this?

According to Chebyshev’s Theorem, at least 1−1/k² of the data is within k standard deviations from the mean. Setting k = 4 gives us:

• 1 - 1/4² = 1 - 1/16 = 0.9375

• This implies that half of 1 - 0.9375 exceed k = 4: 0.03125

• Consequently, 1 - 0.03125 is below k = 4: 0.96875

With 70 job openings and 1,000 applicants, the ratio is 70/1,000 = 0.07, indicating the company seeks the top 0.07 of applicants.

Given the individual scores in the top 0.03125 of applicants, they can expect to obtain a job.

Answer:

1.                                            Variable           Fixed

Cost of goods sold          70,000,000     30,000,000

Selling Expenses             12,000,000        4,000,000

Administrative Exp.           6,000,000         6,000,000

Total                                  88,000,000     40,000,000

Note:

Cost of goods sold: 70% variable and 30% fixed on 10,000,000 respectively

Selling expenses: 75% variable and 25% fixed on $16,000,000 respectively

Administrative expenses: 50% variable and 50% fixed on $12,000,000 respectively

2. Unit Variable cost = Total variable cost / Units produced

Total Variable cost          88,000,000

Units produced                  1,000,000

Unit variable cost                  88      

Unit Contribution margin = Selling Price - Variable cost per unit

Selling Price                    $188

- Variable cost per unit       $88

Unit Contribution margin   $100

3. Break even Point (Units) = Fixed cost / Contribution margin per unit

Fixed cost                                    40,000,000

Contribution margin per Unit           100    

4. Break even point (units) = Fixed cost / Contribution margin per unit

Fixed cost                                           40,000,000

Increased Fixed cost                           5,000,000

Total New fixed cost                          45,000,000

Contribution margin per unit                   100      

Break even point (units)                      450,000

5. Determined sales units = (New fixed cost + Desired Income) / Contribution margin

New Fixed Cost                45,000,000

Desired Income                60,000,000

                                         105,000,000

Contribution margin                100        

per unit

Determined sales units      1,050,000

6. Maximum Income from operation = Total New sales - Total New variable cost - Total Fixed cost

Sales                               188,000,000

Increased sales               11,280,000

Total New sales              199,289,000

Variable cost                    88,000,000

New Variable cost     5,280,000

Total New Variable cost   93,280,000

Total New Fixed cost       45,000,000

Maximum Income from   61,000,000

operation

Number of units = Increase in sales / Price per unit

New variable cost = Number of units * Unit variable cost

Increased sales                    11,280,000

Price per unit                            188    

Number of units                      60,000

Unit variable cost x                  88.00

New Variable cost                 5,280,000

7. Net income = Sales - Variable cost - New fixed cost

Sales                           188,000,000

Less: Variable cost      88,000,000

Less: New fixed cost   45,000,000

Net Income                  55,000,000

8. Option b. Supporting the proposal due to its potential to boost operational income.

Response:

Clarification:

Last year's customer orders totaled 15000

Predicted orders for next year with a 15% rise = 15000 x 1.15 = 17250

Each customer order takes 1.5 hours to fulfill

Total time needed to satisfy customer orders = 17250 x 1.5 = 25875

Knowing that the standard work year comprises 2000 hours

Hence, the effective work year with a 2% capacity cushion

= Standard work year x ( 1 – Capacity cushion %/100)

= 2000 x 0.98  = 1960 hours

Workers required by manager

= Total time needed for orders / effective work year

= 25875 / 1960  = 13.20, rounded to 13

Thus, the manager will require 13 workers next year