accounting problems with all solutions
Question # 00010987
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Updated on: 03/26/2014 01:57 PM Due on: 04/12/2014
Problem 1
Suppose a manufacturing company makes a certain item. The time to produce each item is
normally distributed around a mean of 27 minutes with a standard deviation of 2.5 minutes.
Thus, the population of production times is normal in shape. Find the mean and standard
deviation of the sample.
Problem 2
The average prices for a product in 12 stores in a city are shown below.
$2.99, $2.85, $3.25, $3.55, $3.00, $2.99, $2.76, $3.50, $3.20, $2.85, $3.75, $3.85
Test the hypothesis that the average price is higher than $2.87. Use level of significance ? =
0.05.
Problem 3
A store wishes to predict net profit as a function of sales for the next year. The following table
gives the years 1998 to 2005.
Year
1998
1999
2000
2001
2002
2003
2004
2005
Sales
(thousands of
dollars)
51
55
65
82
75
71
82
81
Net Profit
5
10.2
9.6
-3
2.8
3.2
-2.3
-2.6
(a) Graph the points from 1998 through 2005 on a scatter diagram using Sales as the
independent variable and Net Profit as the dependent variable.
(b) Draw the regression line on the graph you constructed in Part (a).
(c) What is the value of the coefficient of determination for this regression model? Comment on
the strength of the regression line for this model.
(d) What is the predicted net profit for 2006 if sales are expected to be 125?
Problem 4
Last week’s sales of iMac computers at an Apple Store in Oklahoma City, OK, are shown in the
following table:
Day
1
2
3
4
5
6
7
Sales (Dollars)
180
150
210
225
195
190
230
(a) Use the 3-day moving average method for forecasting days 4–7.
(b) Use the 3-day weighted moving average method for forecasting days 4–7. Use Weight 1 day
ago = 2, Weight 2 days ago = 4, and Weight 3 days ago = 3.
(c) Compare the techniques using the mean absolute deviation (MAD).
Problem 5
The following table shows six years of average annual cost-of-living index data:
Year
2008
2009
2010
2011
2012
2013
Annual Cost of Living
Index
105.8
111.4
121.9
134.3
128.6
125.2
(a) Forecast the average annual food price index for all years from 2008 to 2013. Use a 3-year
weighted moving average with weights of 0.5, 0.3, and 0.2. Use the largest weight with the
most recent data.
(b) Forecast the average annual food price index using exponential smoothing with ? = 0.7 for
all years from 2008 to 2014. Use the rate for 2008 as the starting forecast for 2008.
(c) Which of the methods in parts (a) and (b) produces better forecasts for the 3 years from 2011
to 2013? Answer on the basis of mean square error (MAD).
Problem 6
A company manufactures two products, Product A and Product B. The wholesale price and
manufacturing cost of each product are shown below.
Item
A
B
Price
$30
$45
Cost
$10
$15
Assembly Times (hr)
2
4
The company will produce a minimum of 5,000 of each item. Given the number of hours, the
company can sell no more than 8,000 of Item A and 10,000 of Item B. Suppose the company has
50,000 hours of assembly time available. How many of each item should it produce in order to
maximize profits while meeting all necessary constraints? Give the LP model and use the
graphical method to find the optimal solution.
Problem 7
A commercial real estate company is evaluating a proposed warehouse. The proposed site is near
a rail terminal, but the state government may extend the highway to the area. In addition, the
federal government is considering rebuilding the local port facilities. Below is the payoff table in
monthly profit depending upon what government actions are taken. Based on the following
criteria, what are the correct choices for terminal rental?
(a) Optimistic or maximax criterion
(b) Pessimistic or maximin criterion
(c) Equally likely or principle of insufficient reason criterion
Warehous
e size (ft2)
15000
30000
60000
100000
Rail
terminal
only
10
15
20
15
Development projects
Port
Highway
rehabilitatio
expansion
n
25
35
25
40
30
45
20
40
All
40
50
75
90
-
Rating:
/5
Solution: accounting problems with all solutions