Question & Answer

ROI; residual income; breakeven point; contribution margin Mirror Industries laminating division, BrightShine, incurred the following costs and expenses in the last period.       During the period, BrightShine produced 300 000 units of industrial photo prints, which were sold for $2 each. Mirrors’s investment in BrightShine was $500 000 and $700 000 at the beginning and ending of the year, respectively. BrightShine’s weighted average cost of capital is 15 per cent.   Required (a)        Determine BrightShine’s return on investment for the year. (b)        Compute BrightShine’s residual income (loss) for the year. (c)        How many industrial photo print units did BrightShine have to sell during the year to break even? (d)        What was BrightShine’s contribution margin for the year?

There are 20 correct answers in the following multiple choice questions (some questions have multiple answers that are correct). To attain a perfect score on the quiz, all correct answers must be given. Each correct answer is worth 1 point. Each omitted answer or wrong answer reduces the score by 1 point, and each additional answer beyond the correct number of answers reduces the score by 1 point. Percentage score on the quiz is based on the total number of correct answers. 8.1 Of the three polymer types, which one is the most important commercially: (a) thermoplastics, (b) thermosets, or (c) elastomers? 8.2 Which one of the three polymer types is not normally considered to be a plastic: (a) thermoplastics, (b) thermosets, or (c) elastomers? 8.3 Which one of the three polymer types does not involve cross-linking: (a) thermoplastics, (b) thermosets, or (c) elastomers? 8.4 As the degree of crystallinity in a given polymer increases, the polymer becomes denser and stiffer, and its melting temperature decreases: (a) true or (b) false? 8.5 Which one of the following is the chemical formula for the repeating unit in polyethylene: (a) CH2, (b) C2H4, (c) C3H6, (d) C5H8, or (e) C8H8? 8.6 Degree of polymerization is which one of the following: (a) average number of mers in the molecule chain; (b) proportion of the monomer that has been polymerized; (c) sum of the molecule weights of the mers in the molecule; or (d) none of the above? 8.7 A branched molecular structure is stronger in the solid state and more viscous in the molten state than a linear structure for the same polymer: (a) true or (b) false? 8.8 A copolymer is a mixture of the macromolecules of two different homopolymers: (a) true or (b) false? 8.9 As the temperature of a polymer increases, its density (a) increases, (b) decreases, or (c) remains fairly constant? 8.10 Which of the following plastics has the highest market share: (a) phenolics, (b) polyethylene, (c) polypropylene, (d) polystyrene, or (e) polyvinylchloride? 8.11 Which of the following polymers are normally thermoplastic (four best answers): (a) acrylics, (b) cellulose acetate, (c) nylon, (d) phenolics, (e) polychloroprene, (f) polyesters, (g) polyethylene, (h) polyisoprene, and (i) polyurethane? 8.12 Polystyrene (without plasticizers) is amorphous, transparent, and brittle: (a) true or (b) false? 8.13 The fiber rayon used in textiles is based on which one of the following polymers: (a) cellulose, (b) nylon, (c) polyester, (d) polyethylene, or (e) polypropylene? 8.14 The basic difference between low-density polyethylene and high-density polyethylene is that the latter has a much higher degree of crystallinity: (a) true or (b) false? 8.15 Among the thermosetting polymers, the most widely used commercially is which one of the following: (a) epoxies, (b) phenolics, (c) silicones, or (d) urethanes? 8.16 The chemical formula for polyisoprene in natural rubber is which of the following: (a) CH2, (b) C2H4, (c) C3H6, (d) C5H8, or (e) C8H8? 8.17 The leading commercial synthetic rubber is which one of the following: (a) butyl rubber, (b) isoprene rubber, (c) polybutadiene, (d) polyurethane, (e) styrene-butadiene rubber, or (f) thermoplastic elastomers?

What are the principal material handling functions in manufacturing?

What are the two most common titanium compounds that are coated onto cutting tools by chemical vapor deposition?

Given a large volume of metallic powders, all of which are perfectly spherical and having the same exact diameter, what is the maximum possible packing factor that the powders can take?

1.      : Do you think Vinson’s desire for changes in culture are related to changes in the external environment? Explain.

Shania Twain Company was formed on December 1, 2013. The following information is available from Twain’s inventory records for Product BAP. Units Unit Cost January 1, 2014 (beginning inventory) 600 $ 8.00 Purchases: January 5, 2014 1,200 9.00 January 25, 2014 1,300 10.00 February 16, 2014 800 11.00 March 26, 2014 600 12.00 A physical inventory on March 31, 2014, shows 1,600 units on hand. Instructions Prepare schedules to compute the ending inventory at March 31, 2014, under each of the following inventory methods. (a) FIFO. (b) LIFO. (c) Weighted-average (round unit costs to two decimal places).

Why would a financial institution holding a stock consider buying a put option on that stock rather than simply selling it? (LO4)

ROI, EVA, residual income Senior management at Harriot Industries, an Italian-based fashion house and cosmetics company, have been engaged in a debate around the best key financial measure relevant to evaluate the performance of senior executives and divisional managers. Currently, the performance of senior managers and divisional managers is based on return on investment (ROI), which forms the basis of the bonus payments, provided ROI increases are achieved each year.   The main source of tension seems to be that some of the accounting staff are pushing for the use of economic value added (EVA) or, at the very least, residual income (RI) to be used at both the senior executive and divisional levels.   You have been asked to contribute some views. On a recent visit to the head office of Harriot Industries you were able to access details on a printout from a digital whiteboard that represented a discussion about performance measures and a potential investment project in the Logistics Division. Some of this material is provided below.                                                   Required Using the information provided in the table, demonstrate (perhaps including calculations) the key arguments that might be put forward to support the view that the sole use of return on investment (ROI) may be inappropriate, particularly at the divisional level.

The controller for Clint Eastwood Co. is attempting to determine the amount of cash to be reported on its December 31, 2014, balance sheet. The following information is provided. 1. Commercial savings account of $600,000 and a commercial checking account balance of $900,000 are held at First National Bank of Yojimbo. 2. Money market fund account held at Volonte Co. (a mutual fund organization) permits Eastwood to write checks on this balance, $5,000,000. 3. Travel advances of $180,000 for executive travel for the first quarter of next year (employee to reimburse through salary reduction). 4. A separate cash fund in the amount of $1,500,000 is restricted for the retirement of long-term debt. 5. Petty cash fund of $1,000. 6. An I.O.U. from Marianne Koch, a company customer, in the amount of $190,000. 7. A bank overdraft of $110,000 has occurred at one of the banks the company uses to deposit its cash receipts. At the present time, the company has no deposits at this bank. 8. The company has two certificates of deposit, each totaling $500,000. These CDs have a maturity of 120 days. 9. Eastwood has received a check that is dated January 12, 2015, in the amount of $125,000. 10. Eastwood has agreed to maintain a cash balance of $500,000 at all times at First National Bank of Yojimbo to ensure future credit availability. 11. Eastwood has purchased $2,100,000 of commercial paper of Sergio Leone Co. which is due in 60 days. 12. Currency and coin on hand amounted to $7,700. Instructions (a) Compute the amount of cash to be reported on Eastwood Co.’s balance sheet at December 31, 2014. (b) Indicate the proper reporting for items that are not reported as cash on the December 31, 2014, balance sheet.

Murphy Mining Company recently purchased a quartz mine that it intends to work for the next 10 years. According to state environmental laws, Murphy must restore the mine site to its original natural prairie state after it ceases mining operations at the site. To properly account for the mine, Murphy must estimate the fair value of this asset retirement obligation. This amount will be recorded as a liability and added to the value of the mine on Murphy’s books. (You will learn more about these asset retirement obligations in Chapters 10 and 13.) There is no active market for retirement obligations such as these, but Murphy has developed the following cash flow estimates based on its prior experience in mining-site restoration. It will take 3 years to restore the mine site when mining operations cease in 10 years. Each estimated cash outflow reflects an annual payment at the end of each year of the 3-year restoration period. Instructions (a) What is the estimated fair value of Murphy’s asset retirement obligation? Murphy determines that the appropriate discount rate for this estimation is 5%. Round calculations to the nearest dollar. (b) Is the estimate developed for part (a) a Level 1 or Level 3 fair value estimate? Explain. Restoration Estimated Probability Cash Outflow Assessment $15,000 10% 22,000 30% 25,000 50% 30,000 10%

There are 19 correct answers in the following multiple-choice questions (some questions have multiple answers that are correct). To attain a perfect score on the quiz, all correct answers must be given. Each correct answer is worth 1 point. Each omitted answer or wrong answer reduces the score by 1 point, and each additional answer beyond the correct number of answers reduces the score by 1 point. Percentage score on the quiz is based on the total number of correct answers. 9.1 Anisotropic means which one of the following: (a) composite materials with composition consisting of more than two materials, (b) properties are the same in every direction, (c) properties vary depending on the direction in which they are measured, or (d) strength and other properties are a function of curing temperature? 9.2 The reinforcing phase is the matrix within which the secondary phase is imbedded: (a) true or (b) false? 9.3 Which one of the following reinforcing geometries offers the greatest potential for strength and stiffness improvement in the resulting composite material: (a) fibers, (b) flakes, (c) particles, or (d) infiltrated phase? 9.4 Wood is which one of the following composite types: (a) CMC, (b) MMC, or (c) PMC? 9.5 Which of the following materials are used as fibers in fiber-reinforced plastics (four best answers): (a) aluminum oxide, (b) boron, (c) cast iron, (d) E-glass, (e) epoxy, (f) Kevlar 49, (g) polyester, and (h) silicon? 9.6 Which of the following metals are used as the matrix material in fiber-reinforced MMCs (two best answers): (a) aluminum, (b) copper, (c) iron, (d) magnesium, and (e) zinc? 9.7 Which of the following metals are used as the matrix metals in nearly all WC cemented carbides and TiC cermets (two correct answers): (a) aluminum, (b) chromium, (c) cobalt, (d) lead, (e) nickel, (f) tungsten, and (g) tungsten carbide? 9.8 Ceramic matrix composites are designed to overcome which of the following weaknesses of ceramics (two best answers): (a) compressive strength, (b) hardness, (c) hot hardness, (d) modulus of elasticity, (e) tensile strength, and (f) toughness? 9.9 Which one of the following polymer types are most commonly used in polymer matrix composites: (a) elastomers, (b) thermoplastics, or (c) thermosets? 9.10 Which of the following materials are not composites (two correct answers): (a) cemented carbide, (b) phenolic molding compound, (c) plywood, (d) Portland cement, (e) rubber in automobile tires, (f) wood, and (g) 1020 steel?

Under what circumstances does property received by a corporation in a §351 transaction not receive a carryover basis?  What is the reason for this rule?

The strength coefficient = 35,000 lb/in2 and strain-hardening exponent = 0.40 for a metal used in a forming operation in which the workpart is reduced in cross-sectional area by stretching. If the average flow stress on the part is 20,000 lb/in2 , determine the amount of reduction in cross-sectional area experienced by the part.

n a turning operation on stainless steel with hardness = 200 HB, the cutting speed = 200 m/min, feed = 0.25 mm/rev, and depth of cut = 7.5 mm. How much power will the lathe draw in performing this operation if its mechanical efficiency = 90%. Use Table 21.2 to obtain the appropriate specific energy value

Warren Co. purchased a put option on Echo common shares on January 7, 2014, for $360. The put option is for 400 shares, and the strike price is $85 (which equals the price of an Echo share on the purchase date). The option expires on July 31, 2014. The following data are available with respect to the put option. Date Market Price of Echo Shares Time Value of Put Option March 31, 2014 $80 per share $200 June 30, 2014 82 per share 90 July 6, 2014 77 per share 25 Instructions Prepare the journal entries for Warren Co. for the following dates. (a) January 7, 2014—Investment in put option on Echo shares. (b) March 31, 2014—Warren prepares financial statements. (c) June 30, 2014—Warren prepares financial statements. (d) July 6, 2014—Warren settles the put option on the Echo shares.

What is meant by the phrase “double taxation of corporate income”?

What are some of the simple measures used to assess the feasibility of a proposed cup-drawing operation?

1.       An organizational consultant said, “Some aspect of functional structure appears in every organization.” Do you agree? Explain.

Sustainability and job costing in a service sector Green and Greener Co., a law firm specialising in environmental litigation, had the following costs last year:       The following costs were included in overhead:         The entity recently improved its ability to document and trace costs to individual cases. Revised bookkeeping procedures now allow it to trace fringe benefit costs for direct professional labour, paralegal costs, telephone charges, computer time, and photocopying costs to each case individually. The managing partner needs to decide whether more costs than just direct professional labour should be traced directly to jobs to allow the entity to better justify billings to clients. During the last year, more costs were traced to client engagements. Two of the case records showed the following:         Three methods are being considered for allocating overhead this year: ·           Method 1: Allocate overhead based on direct professional labour cost. Calculate the allocation rate using last year’s direct professional labour costs of $15 million and overhead costs of $21 million. ·           Method 2: Allocate overhead based on direct professional labour cost. Calculate the allocation rate using last year’s direct professional labour costs of $15 million and overhead costs of $10 million ($21 million less $11 million in direct costs that are traced this year). ·           Method 3: Allocate the $10 million overhead based on total direct costs. Calculate the allocation rate using last year’s direct costs (professional labour of $15 million plus other direct costs of $11 million).   Required (a)     Calculate the overhead allocation rate for method 1. (b)     Calculate the overhead allocation rate for method 2. (c)     Calculate the overhead allocation rate for method 3. (d)     Using each of the three rates calculated in parts (a), (b) and (c), calculate the total costs of cases 875 and 876. (e)     Explain why the total costs allocated to cases 875 and 876 are not the same under the three methods. (f)      Explain why method 1 would be inappropriate. (g)     Would method 2 or method 3 be better? Explain. (h)     Explain how professional service firms, like law firms might engage in sustainability practices. (LO1 and 4)

There are 15 correct answers in the following multiple choice questions (some questions have multiple answers that are correct). To attain a perfect score on the quiz, all correct answers must be given. Each correct answer is worth 1 point. Each omitted answer or wrong answer reduces the score by 1 point, and each additional answer beyond the correct number of answers reduces the score by 1 point. Percentage score on the quiz is based on the total number of correct answers. 10.1 Sand casting is which of the following types: (a) expendable mold or (b) permanent mold? 10.2 The upper half of a sand-casting mold is called which of the following: (a) cope or (b) drag? 10.3 In casting, a flask is which one of the following: (a) beverage bottle for foundrymen, (b) box which holds the cope and drag, (c) container for holding liquid metal, or (d) metal which extrudes between the mold halves? 10.4 In foundry work, a runner is which one of the following: (a) channel in the mold leading from the downsprue to the main mold cavity, (b) foundryman who moves the molten metal to the mold, or (c) vertical channel into which molten metal is poured into the mold? 10.5 Turbulence during pouring of the molten metal is undesirable for which of the following reasons (two best answers): (a) it causes discoloration of the mold surfaces, (b) it dissolves the binder used to hold together the sand mold, (c) it increases erosion of the mold surfaces, (d) it increases the formation of metallic oxides that can become entrapped during solidification, (e) it increases the mold filling time, and (f) it increases total solidification time? 10.6 Total solidification time is defined as which one of the following: (a) time between pouring and complete solidification, (b) time between pouring and cooling to room temperature, (c) time between solidification and cooling to room temperature, or (d) time to give up the heat of fusion? 10.7 During solidification of an alloy when a mixture of solid and liquid metals is present, the solid-liquid mixture is referred to as which one of the following: (a) eutectic composition, (b) ingot segregation, (c) liquidus, (d) mushy zone, or (e) solidus?   10.8 Chvorinov's rule states that total solidification time is proportional to which one of the following quantities: (a) (A/V) n , (b) Hf, (c) Tm, (d) V, (e) V/A, or (f) (V/A) 2 ; where A = surface area of casting, Hf = heat of fusion, Tm = melting temperature, and V = volume of casting? 10.9 A riser in casting is described by which of the following (three correct answers): (a) an insert in the casting that inhibits buoyancy of the core, (b) gating system in which the sprue feeds directly into the cavity, (c) metal that is not part of the casting, (d) source of molten metal to feed the casting and compensate for shrinkage during solidification, and (e) waste metal that is usually recycled? 10.10 In a sand-casting mold, the V/A ratio of the riser should be (a) equal to, (b) greater than, or (c) smaller than the V/A ratio of the casting itself? 10.11 Which of the following riser types are completely enclosed within the sand mold and connected to the main cavity by a channel to feed the molten metal (two correct answers): (a) blind riser, (b) open riser, (c) side riser, and (d) top riser?

Explain the concept of cash flow underwriting. (LO4)

Describe the general differences between a call option and a futures contract. (LO1)

Don Juan, a single taxpayer, is the sole owner, of DJ’s Inc., an S corporation. In 2024, DJ’s Inc. incurred a massive $600,000 business loss, all of which is allocable to Don Juan as the sole shareholder. Assume that the $600,000 loss is not limited by the basis, at-risk, or passive loss rules and that Don Juan has no other business income or business losses. How much of the $600,000 loss will Don Juan be able to deduct this year? What happens to any loss not deducted this year?

Anne Cleves Company reported the following amounts in the stockholders’ equity section of its December 31, 2013, balance sheet. Preferred stock, 10%, $100 par (10,000 shares authorized, 2,000 shares issued) $200,000 Common stock, $5 par (100,000 shares authorized, 20,000 shares issued) 100,000 Additional paid-in capital 125,000 Retained earnings 450,000 Total $875,000 During 2014, Cleves took part in the following transactions concerning stockholders’ equity. 1. Paid the annual 2013 $10 per share dividend on preferred stock and a $2 per share dividend on common stock. These dividends had been declared on December 31, 2013. 2. Purchased 1,700 shares of its own outstanding common stock for $40 per share. Cleves uses the cost method. 3. Reissued 700 treasury shares for land valued at $30,000. 4. Issued 500 shares of preferred stock at $105 per share. 5. Declared a 10% stock dividend on the outstanding common stock when the stock is selling for $45 per share. 6. Issued the stock dividend. 7. Declared the annual 2014 $10 per share dividend on preferred stock and the $2 per share dividend on common stock. These dividends are payable in 2015. Instructions (a) Prepare journal entries to record the transactions described above. (b) Prepare the December 31, 2014, stockholders’ equity section. Assume 2014 net income was $330,000.