MAT 540 ENTIRE COURSE (DQs, Assignment and Final Exam) – A+ Guaranteed

MAT 540 ENTIRE COURSE (DQs, Assignment and Final Exam)

Week 2a

“Decision Tree”  Please respond to the following:

  • Explain the parts of a decision tree.
  • What are some benefits of using decision trees?
  • In what ways can decision trees be used for business decisions? Name some real-world examples.

Week 2b

“The Science of Probability”  Please respond to the following:

  • How does the science of probability affect decisions? Why?

Week 3a

“Pseudorandom”

  • Why do we use pseudorandom numbers in simulations?
  • How do pseudorandom numbers affect the accuracy of a simulation?

Week 3b

“Statistical Analysis”

  • What is the role of statistical analysis in simulation?

Week 4a

“Forecasting”  Please respond to the following:

  • Choose one of the forecasting methods and explain the rationale behind using it in real-life.
  • Describe how a domestic fast food chain with plans for expanding into China would be able to use a forecasting model.

Week 4b

“Forecasting Models”

  • What is the difference between a causal model and a time- series model? Give an example of when each would be used.
  • What are some of the problems and drawbacks of the moving average forecasting model?
  • How do you determine how many observations to average in a moving average model?
  • How do you determine the weightings to use in a weighted moving average model?

Week 5 – Midterm Week

“Reflection to date”  Please respond to the following:

  • In a paragraph, reflect on what you’ve learned so far in this course.  Identify the most interesting, unexpected, or useful thing you’ve learned and explain why

Week 6a

“The Linear Programming Model”  Please respond to the following:

  • What are some business uses of a linear programming model? Provide an example.

Week 6b

“The LP Model”  Please respond to the following:

  • In the graphical method, how do you know when a problem is infeasible, unbounded, or when it has multiple optimal solutions?
  • What are the essential ingredients of an LP model? Why is it helpful to understand the characteristics of LP models?

Week 6c

“The LP Model”  Please respond to the following:

  • Distinguish between a minimization and maximization LP model. How do you know which of these to use for any given problem?

Week 7a

  • What does the shadow price reflect in a maximization problem? Please explain.
  • How do the graphical and computer-based methods of solving LP problems differ? In what ways are they the same? Under what circumstances would you prefer to use the graphical approach?

Week 7b

  • How does sensitivity analysis affect the decision making process? How could it be used by managers?

Week 8a

  • What is the relationship between decision variables and the objective function?
  • What is the difference between an objective function and a constraint?

Week 8b

  • Does the linear programming approach apply the same way in different applications?  Explain why or why not using examples.

Week 9a

  • Explain how the applications of Integer programming differ from those of linear programming.
  • Why is “rounding-down” an LP solution a suboptimal way to solve Integer programming problems?

Week 9b

  • Explain the characteristics of integer programming problems.
  • Give specific instances in which you would use an integer programming model rather than an LP model.  Provide real-world examples.

Week 10a

  • Can we apply transshipment models to inventory applications? Why or why not?
  • Is the transportation model an example of decision making under certainty or decision making under uncertainty? Why?

Week 10b

  • Explain the assignment model and how it facilitates in solving transportation problems.
  • What benefits would be gained from using this model?

Here’s the SOLUTION

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Natural Cosmetics Company applies overhead costs

Natural Cosmetics Company applies overhead costs on the basis of machine hours. The overhead rate is computed by analyzing data from the previous year to determine the percentage change in costs. Thus, this year’s overhead rate will be based on the percentage change multiplied by last year’s costs.

Last Year
Machine hours 55,360
Overhead costs
Indirect Labor $23,500.00
Employee Benefits $28,600.00
Manufacturing Supervision $18,500.00
Utilities $15,000.00
Factory Insurance $7,800.00
Janitorial Services $12,100.00
Depreciation-factory $21,300.00
Misc Overhead $6,000.00
$132,800.00

This year the cost of utilities is expected to increase by 40% over the previous year; the cost of indirect labor, employee benefits, and misc overhead is expected to increase by 30% over the previous year; the cost of insurance and depreciation is expected to increase by 20% over the previous year and the cost of supervision and janatorial services is expected to increase by 10% over the previous year. Machine hours are expected to total 68,786.

Required

1. Compute the projected costs and the overhead rate for this year, using the information about expected cost increases. (Carry your answer to three decimal places).

2. Jobs completed during this year and the machine hours used were as follows:
Job no. Machine hrs.
2214 12,300
2215 14,200
2216 9,800
2217 13,600
2218 11,300
2219 8,100
Determine the amount of overhead to be applied to each job and to total production during this year. (round answers to whole dollars)

3. Actual overhead costs for this year were $165,845. Was overhead under-applied or over-applied? By how much? Should the Cost of Goods Sold account be increased or decreased to reflect actual overhead costs?

Here’s the SOLUTION

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On the first day of the fiscal year, Jill Company issues $3,639,000

On the first day of the fiscal year, Jill Company issues $3,639,000, 11%, 10-year bonds for cash of $4,673,393 when the market rate of interest was 7%. The bonds pay interest semi-annually on June 30 and December 31. Determine (1) the premium on bonds payable at the date of issuance, (2) the semi-annual cash interest payment, (3) the semi-annual premium amortization using the straight line method, and (4) the semi-annual interest expense.

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Martin Buber Co. purchased land as a factory site for $622,400 (A+ Guaranteed)

Martin Buber Co. purchased land as a factory site for $622,400. The process of tearing down two old buildings on the site and constructing the factory required 6 months.

The company paid $65,352 to raze the old buildings and sold salvaged lumber and brick for $9,803. Legal fees of $2,879 were paid for title investigation and drawing the purchase contract. Martin Buber paid $3,423 to an engineering firm for a land survey, and $105,808 for drawing the factory plans. The land survey had to be made before definitive plans could be drawn. Title insurance on the property cost $2,334, and a liability insurance premium paid during construction was $1,400. The contractor’s charge for construction was $4,263,440. The company paid the contractor in two installments: $1,867,200 at the end of 3 months and $2,396,240 upon completion. Interest costs of $264,520 were incurred to finance the construction.

Determine the cost of the land and the cost of the building as they should be recorded on the books of Martin Buberk Co. Assume that the land survey was for the building.

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The Laurel Co. is owned and operated by Paul Laurel (A+ Guaranteed)

The Laurel Co. is owned and operated by Paul Laurel. The following is an excerpt from a conversation between Paul Laurel and Maria Fuller, the chief accountant for The Laurel Co.: Paul: Maria, I have a question about this recent balance sheet. Maria: Sure, what’s your question? Paul: Well, as you know, I’m applying for a bank loan to finance our new store in Clinton, and I noticed that the accounts payable are listed as $180,000. Maria: That’s right. Approximately $150,000 of that represents amounts due our suppliers, and the remainder is miscellaneous payables to creditors for utilities, office equipment, supplies, etc. Paul: That’s what I thought. But as you know, we normally receive a 2% discount from our suppliers for earlier payment, and we always try to take the discount. Maria: That’s right. I can’t remember the last time we missed a discount. Paul: Well, in that case, it seems to me the accounts payable should be listed minus the 2% discount. Let’s list the accounts payable due suppliers as $147,000 rather than $150,000. Every little bit helps. You never know. It might make the difference between getting the loan and not. How would you respond to Paul Laurel’s request?

Here’s the SOLUTION

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Samanca Cabinets makes custom wooden cabinets for high-end stereo systems from specialty woods

Samanca Cabinets makes custom wooden cabinets for high-end stereo systems from specialty woods. The company uses a job-order costing system. The capacity of the plant is determined by the capacity of its constraint, which is time on the automated bandsaw that makes finely beveled cuts in wood according to the preprogrammed specifications of each cabinet. The bandsaw can operate up to 150 hours per month. The estimated total manufacturing overhead at capacity is $11,000 per month. The company bases its predetermined overhead rate on capacity, so its predetermined overhead rate is $74 per hour of bandsaw use

The results of a recent month’s operations appear below:
  Sales $ 39,860
  Beginning inventories $ 0
  Ending inventories $ 0
  Direct materials $ 4,820
  Direct labor (all variable) $ 9,640
  Manufacturing overhead incurred $ 10,870
  Selling and administrative expense $ 9,350
  Actual hours of bandsaw use 124

Now I need to know what would be the dollar amount for the “Cost of Goods Sold”

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Medusa Products uses a job-order costing system

Medusa Products uses a job-order costing system. Overhead costs are applied to jobs on the basis of machine-hours. At the beginning of the year, management estimated that the company would work 85,000 machine-hours and incur $170,000 in manufacturing overhead costs for the year.

Required:

1) Compute the company’s predetermined overhead rate.

2) Assume that during the year the company actually worked only 80,000 machine-hours and incurred $168,000 of manufacturing overhead costs. Compute the amount of underapplied or overapplied overhead for the year.

Here’s the SOLUTION

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The following information is provided in the 2011 annual report to shareholders of paris-perfume.com

The following information is provided in the 2011 annual report to shareholders of paris-perfume.com:

December 31, 2011 December 31, 2010
Accounts receivable ??? $100 million
Inventory $70 million $30 million
Other assets ??? $170 million
Total assets ??? $300 million

Total liabilities ??? $100 million
Total stockholders’ equity ??? $200 million

For the year ended Dec. 31, 2011
Net sales ???
Cost of goods sold ???
Net income $40 million
Return on assets 10%
Receivables turnover 8.0
Inventory turnover 12.0
Asset turnover 2.5
Return on stockholders’ equity 20%
Profit margin on sales 4%

Required: Compute the missing amount in the paris-perfume.com financial statement information, indicated by ??? in the table above.

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Stock A has a beta of 1.56 and has the same reward-to-risk ratio as stock B

Stock A has a beta of 1.56 and has the same reward-to-risk ratio as stock B. Stock B has a beta of 0.86 and an expected return of 13.57 percent. What is the expected return (in percents) on stock A if the risk-free rate is 4.31 percent?

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Talbot Industries is considering launching a new product

Talbot Industries is considering launching a new product. The new manufacturing equipment will cost $17 million, and production and sales will require an initial $5 million investment in net operating working capital. The company’s tax rate is 40%.

a. What is the initial investment outlay?

b. The company spent and expensed $150,000 on research related to the new product last year. Would this change your answer? Explain.

c. Rather than build a new manufacturing facility, the company plans to install the equipment in a building it owns but is not now using. The building could be sold for $1.5 million after taxes and real estate commissions. How would this affect your answer?

Here’s the SOLUTION

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