A managerial decision problem. A direct-mail company assembles and stores paper products (envelopes, letters, brochures, order cards, etc.) for its customers. The company estimates the total number of pieces received in a shipment by calculating the weight per piece and then weighing the entire shipment. The company is unsure whether the sample of pieces used to estimate the mean weight per piece should be drawn from a single carton or whether it is worth the extra time required to pull a few pieces from several cartons. To aid management in making a decision, eight brochures were removed from each of the five cartons of a typical shipment and weighed. The weights (in pounds) are shown in the table.

Carton 1	Carton 2	Carton 3	Carton 4	Carton 5
.01851	.01872	.01869	.01899	.01882
.01829	.01861	.01853	.01917	.01895
.01844	.01876	.01876	.01852	.01884
.01859	.01886	.01880	.01904	.01835
.01854	.01896	.01880	.01923	.01889
.01853	.01879	.01882	.01905	.01876
.01844	.01879	.01862	.01924	.01891
.01833	.01879	.01860	.01893	.01879

a. Identify the response, factor(s), treatments, and experimental units.

Assume that you are the managerial accountant at Infostore, a manufacturer of hard drives, CDs, and DVDs. Its reporting year-end is December 31. The chief financial officer is concerned about having enough cash to pay the expected income tax bill because of poor cash flow management. On November 15, the purchasing department purchased excess inventory of CD raw materials in anticipation of rapid growth of this product beginning in January. To decrease the company’s tax liability, the chief financial officer tells you to record the purchase of this inventory as part of supplies and expense it in the current year; this would decrease the company’s tax liability by increasing expenses.

Required

1. In which account should the purchase of CD raw materials be recorded?
2. How should you respond to this request by the chief financial officer?

A bank manager of City Savings Bank Inc. uses the managerial accounting system to track the costs of operating the various departments within the bank. The departments include Cash Management, Trust, Commercial Loans, Mortgage Loans, Operations, Credit Card, and Branch Services. The static budget and actual results for the Operations Department are as follows:

a. What information is provided by the budget? Specifically, what questions can the bank manager ask of the Operations Department manager?

Internal auditing of invoices. A firm's president, vice presidents, department managers, and others use financial data generated by the firm's accounting system to help them make decisions regarding such things as pricing, budgeting, and plant expansion. To provide reasonable certainty that the system provides reliable data, internal auditors periodically perform various checks of the system (Horngren, Foster, and Datar, Cost Accounting: A Managerial Emphasis, 2005). Suppose an internal auditor is interested in determining the proportion of sales invoices in a population of 5,000 sales invoices for which the "total sales" figure is in error. She plans to estimate the true proportion of invoices in error based on a random sample of size 100. Assume that the population of invoices is numbered from 1 to 5,000 and that every invoice ending with a 0 is in error (i.e., 10% are in error). Use a random number generator to draw a random sample of 100 invoices from the population of 5,000 invoices. For example, random number 456 stands for invoice number 456. List the invoice numbers in your sample and indicate which of your sampled invoices are in error (i.e., those ending in a 0).

Following are 3 individual events affecting the managerial accounting systems for different companies. Match the management concept(s) that the company is likely to adopt for the event identified. There is some overlap in the meaning of customer orientation and total quality management and, therefore, some responses can include more than one concept.

Management Concept
a. Total quality management (TQM)
b. Just-in-time ( JIT) system
c. Continuous improvement (CI)
d. Customer orientation (CO)

Event
_____1. The company starts measuring inventory turnover and discontinues elaborate inventory records. Its new focus is to pull inventory through the system.
_____2. The company starts reporting measures on customer complaints and product returns from customers.
_____3. The company starts reporting measures such as the percent of defective products and the number of units scrapped.

Peer mentoring occurs when a more experienced employee provides one-on-one support and knowledge sharing with a less experienced Employee. The Journal of Managerial Issues (Spring 2008) published a study of the impact of peer mentor training at a large software company. Participants were 222 employees who volunteered to attend a 1-day peer mentor training session. One variable of interest was the employee's level of competence in peer mentoring (measured on a 7-point scale). The competence level of each trainee was measured at three different times in the study: 1 week before training, 2 days after training, and 2 months after training. One experiment aimed to compare the mean competence levels of the three time periods.

e. Multiple means comparisons for the three time periods (using an experiment-wise error rate of .10) are summarized below. Thoroughly analyze the results.

An internal control system consists of all policies and procedures used to protect assets, ensure reliable accounting, promote efficient operations, and urge adherence to company policies. Evaluate each of the following statements and indicate which are true and which are false regarding the objectives of an internal control system.

$$\begin{matrix} \text{\_\_\_\_\_\_\_1. Separation of recordkeeping for assets from the custody over assets is intended to reduce theft and fraud.}\\ \text{\_\_\_\_\_\_\_ 2. The primary objective of internal control procedures is to safeguard the business against theft from government agencies}\\ \text{\_\_\_\_\_\_\_ 3. The main objective of internal control procedures is best accomplished by designing an operational system with managerial policies that protect the assets from waste, fraud, and theft.}\\ \text{\_\_\_\_\_\_\_ 4. Separating the responsibility for a transaction between two or more individuals or departments will not help prevent someone from creating a fictitious invoice and paying the money to herself or himself.}\\ \end{matrix}$$

In his work Input-Output Economics, Leontief provides an example of a simplified economy with just three sectors: agriculture, manufacturing, and households (i.e., the sector of the economy that produces labor). It has the following input-output matrix:

$$\begin{matrix} \\ \text{Agriculture}\\ \text{Manufacturing}\\ \text{Households}\\ \end{matrix} \left[\begin{array}{ccc} \text { Agriculture } & \text { Manufacturing } & \text { Households } \\ 0.25 & 0.40 & 0.133 \\ 0.14 & 0.12 & 0.100 \\ 0.80 & 3.60 & 0.133 \end{array}\right]$$

He also gives the demand matrix

$$D=\left[\begin{array}{l} 35 \\ 38 \\ 40 \end{array}\right].$$

Find the amount of each commodity that should be produced.

A bank manager of City Savings Bank Inc. uses the managerial accounting system to track the costs of operating the various departments within the bank. The departments include Cash Management, Trust, Commercial Loans, Mortgage Loans, Operations, Credit Card, and Branch Services. The static budget and actual results for the Operations Department are as follows:

b. What information does the static budget fail to provide? Specifically, could the budget information be presented differently to provide even more insight for the bank manager?

Taylor Marina has 300 available slips that rent for $800 per season. Payments must be made in full by the start of the boating season, April 1, 2021. The boating season ends October 31, and the marina has a December 31 year-end. Slips for future seasons may be reserved if paid for by December 31, 2021. Under a new policy, if payment for 2022 season slips is made by December 31, 2021, a 5% discount is allowed. If payment for 2023 season slips is made by December 31, 2021, renters get a 20% discount (this promotion hopefully will provide cash flow for major dock repairs).

On December 31, 2020, all 300 slips for the 2021 season were rented at full price. On December 31, 2021, 200 slips were reserved and paid for the 2022 boating season, and 60 slips were reserved and paid for the 2023 boating season.

Instructions

a. Prepare the appropriate journal entries for December 31, 2020, and December 31, 2021.

b. Assume the marina operator is unsophisticated in business. Explain the managerial significance of the above accounting to this person.

Assume that you are the managerial accountant at Infostore, a manufacturer of hard drives, CDs, and DVDs. Its reporting year-end is December 31. The chief financial officer is concerned about having enough cash to pay the expected income tax bill because of poor cash flow management. On November 15, the purchasing department purchased excess inventory of CD raw materials in anticipation of rapid growth of this product beginning in January. To decrease the company’s tax liability, the chief financial officer tells you to record the purchase of this inventory as part of supplies and expense it in the current year; this would decrease the company’s tax liability by increasing expenses. 1. In which account should the purchase of CD raw materials be recorded? 2. How should you respond to this request by the chief financial officer?

Final exam scores for a sample of 20 students in a managerial accounting class are shown. (a) At $\alpha=.05$, is there a difference in the population median scores on the two exams? Make an Excel worksheet for your Wilcoxon signed-rank test calculations and check your work by using MegaStat or a similar computer package. (b) Perform a two-tailed parametric $t$ test for paired two-sample means by using Excel or MegaStat. Do you get the same decision?

$$\begin{array}{ccccccccc} \text { Student } & \text { Exam 1 } & \text { Exam 2 } & \text { Student } & \text { Exam 1 } & \text { Exam 2 } & \text { Student } & \text { Exam 1 } & \text { Exam 2 } \\ \hline 1 & 70 & 81 & 8 & 71 & 69 & 15 & 59 & 68 \\ 2 & 74 & 89 & 9 & 52 & 53 & 16 & 54 & 47 \\ 3 & 65 & 59 & 10 & 79 & 84 & 17 & 75 & 84 \\ 4 & 60 & 68 & 11 & 84 & 96 & 18 & 92 & 100 \\ 5 & 63 & 75 & 12 & 95 & 96 & 19 & 70 & 81 \\ 6 & 58 & 77 & 13 & 83 & 99 & 20 & 54 & 58 \\ 7 & 72 & 82 & 14 & 81 & 76 & & & \end{array}$$

Taylor Marina has 300 available slips that rent for $800 per season. Payments must be made in full by the start of the boating season, April 1, 2018. The boating season ends October 31, and the marina has a December 31 year-end. Slips for future seasons may be reserved if paid for by December 31, 2018. Under a new policy, if payment for 2019 season slips is made by December 31, 2018, a 5% discount is allowed. If payment for 2020 season slips is made by December 31, 2018, renters get a 20% discount (this promotion hopefully will provide cash flow for major dock repairs).

On December 31, 2017, all 300 slips for the 2018 season were rented at full price. On December 31, 2018, 200 slips were reserved and paid for the 2019 boating season, and 60 slips were reserved and paid for the 2020 boating season.

Instructions

• a. Prepare the appropriate journal entries for December 31, 2017, and December 31, 2018.
• b. Assume the marina operator is unsophisticated in business. Explain the managerial significance of the above accounting to this person.

An observational study of 19 managers from a medium-sized manufacturing plant investigated which activities successful managers perform (Journal of Applied Behavioral Science, August 1985). To measure success, the researchers devised an index based on the manager's length of time in the organization and his or her level within the firm; the higher the index, the more successful the manager. The table on the following page presents data that can determine whether managerial success is related to the extensiveness of a manager's network-building interactions with people outside the manager's work unit. Such interactions include phone and face-to-face meetings with customers and suppliers, attending outside meetings, and doing public relations work.

e. Execute a formal statistical hypothesis test to answer the question in part d. Use $\alpha=.05$.