Expert Answers

Yumin Metals Inc. has three grades of metal product, Type A1, Type B3, and Type E6. Financial data for the three grades are as follows:

Yumin Metals’ operations require all three grades to be melted in a furnace before being formed. The furnace runs 24 hours a day, 7 days a week, and is a production bottleneck. The furnace hours required per unit of each product are as follows:
Type A1: .... 8 hours
Type B3: ..... 10 hours
Type E6: ..... 6 hours

The Marketing Department is considering a new marketing and sales campaign. Which product should be emphasized in the marketing and sales campaign in order to maximizeprofitability?

Yumee Products Inc. is divided into five departments, Mixing, Blending, Finishing, Factory Office, and Building Maintenance. The first three departments are engaged in production work. Factory Office and Building Maintenance are service departments. During the month of June, the following factory over- head was incurred for the departments:

The bases for distributing service department expenses to the other departments follow:
Building Maintenance­On the basis of floor space occupied by the other departments as follows: Mixing, 10,000 sq ft; Blending, 4,500 sq ft; Finishing, 10,500 sq ft; and Factory Office, 7,000 sq ft.
Factory Office­On the basis of number of employees as follows: Mixing, 30; Blending, 20; and Finishing, 50.

Required:
Prepare a schedule showing the distribution of the service departments' expenses using the direct distributionmethod.

Yuan Xi has just opened a company that imports fine ceramic gifts from China and sells them over the Internet. In planning his business, Xi did the following:
1. Listed his expected expenses and revenues for the first year of operations
2. Determined that he would keep his expenses low and generate enough revenues during the first four months of operations so that he would have a positive cash flow by the fifth month
3. Decided that he wanted the company to provide him with income for a good life-style and funds for retirement
4. Developed a complete list of goals, objectives, procedures, and policies relating to how he would find, buy, store, sell, and ship goods and collect payment
5. Decided to focus his business on providing customers with the finest Chinese ceramics at a favorable price
6. Decided to expand his website to include ceramics from other Far Eastern countries over the next five years
7. Decided to solely rely on the Internet to market the products
Match each of Xi’s actions to the components of the planning framework: goal, mission, strategic objectives, tactical objectives, operating objectives, business plan, and budget.

You wrote a piece of software that does a better job of allowing computers to network than any other program designed for this purpose. A large networking company wants to incorporate your software into their systems and is offering to pay you $549,000 today, plus $549,000 at the end of each of the following six years for permission to do this. If the appropriate interest rate is 8 percent, what is the present value of the cash flow stream that the company is offering you? (Round answer to the nearest whole dollar, e.g. 5,275.)

You work for the Plains State Bank as an analyst specializing in the financial statements of small businesses seeking loans from the bank. Digit Retail Enterprises Inc. provides you with its balance sheet for December 31, 2012 and 2013 (Exhibit 6.21), and its income statement for 2013 (Exhibit 6.22). Digit Retail Enterprises,

Exhibit 6.21.

Exhibit 6.22
Sales Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $270,000
Gain on Sale of Property, Plant, and Equipment . . . . . . . . . . . . . . . 3,200
Interest Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 200
Total Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . $273,400
Less Expenses:
Cost of Goods Sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . $145,000
Salaries Expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68,000
Rent Expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,000
Insurance Expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,000
Depreciation Expense. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,000
Other Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,800
Total Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $263,800
Net Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 9,600
Inc., acquired no new property, plant, and equipment during the year.
a. Calculate the amount of cash received from customers during 2013.
b. Calculate the acquisition cost of merchandise purchased during 2013.
c. Calculate the amount of cash paid to suppliers of merchandise during 2013.
d. Calculate the amount of cash paid to salaried employees during 2013.
e. Calculate the amount of cash paid to insurance companies during 2013.
f. Calculate the amount of cash paid to landlords for space rented during 2013.
g. Calculate the amount of dividends paid during 2013.
h. Calculate the amount of cash received when property, plant, and equipment were sold during2013.

You work for Nokia in its global cell phone group. You have been made project manager for the design of a new cell phone. Your supervisors have already scoped the project so you have a list showing the work breakdown structure, and this includes major project activities. You must plan the project schedule and calculate project du-ration. Your boss wants the schedule on his desk tomorrow morning!

1. Draw a project network that includes all the activities.

2. Calculate the start and finish times for each activity and determine the minimum number of weeks for completing the project. Find the activities that are on the critical path for completing the project in the shortest time.

3. Identify slack in the activities not on the project critical path.

4. Your boss would like you to study the impact of making two changes to how the project is organized. The first change involves using dedicated teams that would work strictly in parallel on the activities in each subproject. For example, in subproject P (product specifications) the team would work on P1, P2, P3, and P4 all in parallel. In other words, there would be no precedence relationships within a subproject—all tasks within a subproject would be worked on at the same time and each would take the same amount of time as originally specified. With this new design, all the subprojects would be done sequentially with P done first, then S, D, I, and finally V. What would be the expected impact on how long it would take to complete the project if this change were made?

5. The second change your boss would like you to con-sider would be to select the suppliers during subproject P and have them work directly with the dedicated teams as described in problem 4. This would involve adding an additional activity to subproject P called supplier selection and contract negotiation (P5) with duration of 12 weeks. This new activity would be done in parallel with P1, P2, P3, and P4. Subprojects S and V would be eliminated from the project. What would be the expected impact on how long it would take to complete the project if this additional change were made?

6. Evaluate the impact of making these changes using criteria other than just the time to complete the project. Do you think it would be in Nokia’s best interest to try to make these changes in how it runs this and future cell phone design projects?

You work for a small foreign-language-services company. You have been asked to present a market assessment of the largest translation companies for competitor evaluation. Your report must include the following attributes for the global industry: company, size, locations, and ownership status.
What do your findings suggest about possible worldwide opportunities?

You work for an auditing firm that is performing a local government audit. The government has received federal grant funding, and the audit manager on the engagement has asked you to perform the necessary research and review the following costs charged to the federal grant to determine whether or not they are allowable:
(1) Travel to a conference overseas, the primary purpose of which is the dissemination of technical information;
(2) Employee recreational activities and counseling services;
(3) Charges for investment counsel incurred to enhance income from investments;
(4) Lobbying activities undertaken to obtain a grant;
(5) Depreciation; and
(6) Insurance.

Required
a. What document will you research to determine the allow ability of the costs?
b. Write a short memo to document your opinion about whether these costs would be allowable indirect costs to be recovered in part by federal grants. If certain limitations or specifications must be met for allow ability, note them in your memo.

You work at a large MNE that operates in every one of the top 100 metropolitan areas worldwide. One of the most pressing concerns in your firm at the moment is to control costs. Therefore, you have been asked to develop a forecast for the coming year that identifies the markets in which the firm can expect an increase in the cost of living and, as a result, general salary expenditures. After the report needed for your evaluation is secured, classify the cities that have experienced cost increases into their respective countries. Which countries have more than one city that meets the criteria for your forecast? What are the salary-increase traits associated with each city identified?

You want to price posters at the Poster Showcase profitably and run an experiment to estimate the demand elasticity. You raise the price of kitten posters 10% but keep your dog poster prices unchanged. After a month, kitten poster unit sales fall by 12%, but dog posters rise by 8%.Why might the elasticity estimate from this experiment be biased?