Jake's Roof Repair has provided the following data concerning its costs: Fixed Cost per Month $ 21,380 Wages and salaries Parts and supplies Equipment depreciation Truck operating expenses Rent Administrative expenses Cost per Repair-Hour 15.80 $ 7.30 $ 8.45 $ 1.60 $ $ $ $ 2,780 5,800 4,66e 3,850 $ 0.60 For example, wages and salaries should be $21,300 plus $15.00 per repair hour. The company expected to work 2.800 repair-hours May, but actually worked 2,700 repair-hours. The company expects its sales to be $46.00 per repair-hour Required: Compute the company's activity variances for May (Indicate the effect of each variance by selecting “F” for favorable. “U” for unfavorable, and “None” for no effect (i.e., zero variance). Input all amounts as positive values.) Jake's Roof Repair Activity Variances For the Month Ended May 31 Revenue Expenses Wages and salaries Parts and supoles Equipment depreciation Truck operating expenses For example, wages and solaries should be $21,300 plus $15.00 per repair hour. The company expected to May, but actually worked 2700 repair hours. The company expects its sales to be $4600 per repair-hour Required: Compute the company's activity variances for May (indicate the effect of each variance by selecting “F” fom unfavorable, and “None” for no effectie, zero variance). Input all amounts as positive values.) Jake's Roof Repair Activity Variances For the Month Ended May 31 Revenue Expenses Wages and sales Parts and suces Equipment depreciation Truck operating expenses Rent Admitentes Total expense Net operating income

Poor Richard's Pizza provides you with the following information for January and February:

– Cash collections on sales are $500,000 in January and $1,100,000 in February.

– Cash outlays for Operating Costs and Inventory are expected to be $900,000 for

January and $800,000 for February. All amounts are paid in the month incurred.

– The company expects to pay cash dividends o shareholders in February in the amount

of $200,000.

– The Company's January 1 cash balance is $100,000.

– The company has no loans outstanding at December 31.

– The company has $200,000 in outstanding receivables January 1. All amounts will

be collected in January.

– The company would like to have a minimum cash balance of $100,000 at the end of

each month. If their end of month balance drops below $100,000, they can borrow

money from the bank at a rate of 12% per annum (1% per month. Loan assumed

to be borrowed at the beginning of the month. Interest paid at the end of the month

the loan is repaid.

After preparing a Cash Receipts and Disbursements budget, what is the maximum LOAN REPAYMENT (PRINCIPAL + INTEREST) that Poor Richards can make in February.

Select one:

a. February Loan Repayment:
Principal: $200,000
Interest: $4,000

b. February Loan Repayment:
Principal: $100,000
Interest: $2,000

c. February Loan Repayment:
Principal: $200,000
Interest: $2,000

d. Poor Richard's is unable to make any loan repayments in February

e. None of the other answers are correct

15.3 Consider the project contained in Problem 14.7 in Chapter 14. a. Perform a sensitivity analysis to see how NPV is affected by changes in the number of procedures per day, average collection amount, and salvage value. b. Conduct a scenario analysis. Suppose that the hospital's staff concluded that the three most uncertain variables were number of procedures per day, average collection amount, and the equipment's salvage value. Furthermore, the following data were developed:

Week 7 Homework 22-23Multiple choice (5 pts each) (highlight or clearly mark your answer)1) Whicha.b.c.d.of the following is an example of the planning function of a budget?A budget demands integrated input from different business units and functions.Employees are motivated to achieve the goals set by the budget.Budget figures are used to evaluate the performance of managers.The budget outlines a specific course of action for the coming period.2) Opportunity cost(s):a. of a resource with excess capacity is zerob. should be maximized by organizationsc. are recorded as an expense in the accounting recordsd. are most important to financial accountants3) Gnome Company is trying to decide whether to continue to manufacture a particularcomponent or to buy the component from a supplier. Which of the following is relevant tothis decision?a. the potential uses of the facilities that are currently used to manufacture thecomponentb. the insurance on the manufacturing facility which will continue regardless of thedecisionc. allocated corporate fixed costs which would have to be allocated to other products ifthe component is no longer manufacturedd. the cost of the equipment that is currently being used to manufacture the component4) Whicha.b.c.d.of following statements is true of short-term decision making?Fixed costs and variable costs must be analyzed separately.All costs behave in the same way.Unit manufacturing costs are variable costs.All costs involved in a decision are considered relevant.5) A company is analyzing its month-end results by comparing it to both static and flexiblebudgets. During the previous month, the actual selling price was higher than the expectedprice as per the static budget. This difference results in a(n):a. favorable flexible budget variance for sales revenues.b. favorable sales volume variance for sales revenues.c. unfavorable flexible budget variance for sales revenues.d. unfavorable sales volume variance for sales revenues.6) When replacing an old asset with a new one, the original purchase price of the old assetrepresents:a. relevant cost.b. differential costs.c. opportunity cost.d. sunk cost.Problems (10 pts each) (please show your work for partial credit)1) Polynesia Company manufactures sonars for fishing boats. Model 70 sells for $300. Polynesiaproduces and sells 5,500 of them per year. Cost data are as follows:Variable manufacturingVariable marketingFixed manufacturingFixed marketing & admin$100$15$280,000$150,000perperperperunitunityearyearThe sales manager says he has an opportunity to pitch a special sale to a new Canadian fishingcompany that is outfitting new boats. He proposes a sale of 40 units at a special price of $150 perunit. He says it will not cannibalize the company’s regular sales and is a one-time transaction. It willrequire the normal amount of variable costs, both marketing and manufacturing, but will not impactfixed costs in any way. The president of the company has some reservations, but finally agrees tomake the deal if and only if it adds a minimum of $1,500 to operating income. Based on thepresident’s criteria, what will Polynesia decide to do? (show the calculation to support this decision)2) Doro Fill Company fabricates inexpensive automobiles for sale to 3rd world countries. Eachauto includes one wiring harness, which is currently made in-house. Details of the harnessfabrication are as follows:Volume800units per monthVariable cost per unit $7per unitFixed costs$15,000 per monthA factory in Indonesia has offered to supply Dora Fill with ready-made units for a price of $10each. Assume that Doro Fill’s fixed costs are unavoidable, but the company could use thevacated production facilities to earn an additional $5,000 of profit per month. Calculate thetotal relevant costs for both the in-house and outsourcing options.3) In your words, describe a Flexible Operating Budget and a Static Budget and the majordifferences between them.4) Kapital Inc. has prepared the operating budget for the first quarter of 2015. They forecastsales of $50,000 in January, $60,000 in February, and $70,000 in March. Variable and fixedexpenses are as follows:Variable: Power cost (40% of Sales)Miscellaneous expenses: (5% of Sales)Fixed: Salary expense: $8,000 per monthRent expense: $5,000 per monthDepreciation expense: $1,200 per monthPower cost/fixed portion: $800 per monthMiscellaneous expenses/fixed portion: $1,000 per monthCalculate total selling and administrative expenses for the month of January & February.5) McPherson Company is facing a $6 increase in the variable cost of producing one of itsproducts for the upcoming year. Because of this situation, the sales manager has made aproposal to increase the selling price of the product while increasing the advertising budgetat the same time. The price increase will lower sales volume, but the other changes mayhelp the company maintain its profit margins. McPherson has provided the followinginformation regarding the current year results and the proposal made by the sales manager:Unit salesSales price per unitVariable cost per unitFixed costCurrent Year27,000$48$30$76,000Proposal18,000$58$36$96,000Relative to the current year, the sales manager’s proposal will do what to Operating Income? (showcalculations to support this)6) Evans Company has estimated the following amounts for its next fiscal year:Total fixed expensesSale price per unitVariable expenses per unit$832,5004025If the company spends an additional $30,000 on advertising, sales volume would increase by 2,500units. What effect will this decision have on the operating income of Evans? (show calculations)7) Moylan Company has provided the following information:SalesVariable expensesFixed expenses$777,000504,000212,000What will be the change in variable expenses if the sales volume increases by 10%?