A plot of pressure P versus absolute temperature T for a process that takes a sample of an ideal gas from point A to point B. What happens to the volume of the gas during this process?

Lehighton Chalk Company manufactures sidewalk chalk, which it sells online by the box at $50 per unit. Lehighton uses an actual costing system, which means that the actual costs of direct material, direct labor, and manufacturing overhead are entered into work-in-process inventory. The actual application rate for manufacturing overhead is computed each year; actual manufacturing overhead is divided by actual production (in units) to compute the application rate. Information for Lehighton’s first two years of operation is as follows:

$$\begin{array}{lrr} & \textbf{Year 1} & \textbf{Year 2}\\ \\ \text{Sales (in units)} & 2,500& 2,500\\ \text{Production (in units)} &3,000 & 2,000\\ \text{Production costs:}\\ \text{$\quad$Variable manufacturing cost} & \$ 21,000 & \$ 14,000\\ \text{$\quad$Fixed manufacturing overhead} & 42,000 & 42,000\\ \text{Selling and administrative costs:}\\ \text{$\quad$Variable} & 25,000 & 25,000\\ \text{$\quad$Fixed} & 20,000 & 20,000\\ \end{array}$$

Selected information from Lehighton’s year-end balance sheets for its first two years of operation is as follows:

$$\begin{array}{c} \textbf{LEHIGHTON CHALK COMPANY}\\ \textbf{Selected Balance Sheet Information}\\ \end{array}$$

$$\begin{array}{lrr} \textbf{Based on absorption costing} & \textbf{End of Year 1} & \textbf{End of Year 2}\\ \text{Finished-goods inventory } & \$10,500 & \$ 0\\ \text{Retained earnings } &16,500& 24,600\\ \\ \textbf{Based on variable costing} &\textbf{End of Year 1} &\textbf{End of Year 2}\\ \text{Finished-goods inventory} & \$ 3,500 & \$ 0\\ \text{Retained earnings } &9,500 & 24,600\\ \end{array}$$

Required:

1. Why is the year 1 ending balance in finished-goods inventory higher if absorption costing is used than if variable costing is used?

2. Why is the year 2 ending balance in finished-goods inventory the same under absorption and variable costing?

3. Notice that the ending balance of finished-goods inventory under absorption costing is greater than or equal to the ending finished-goods inventory balance under variable costing for both years 1 and 2. Will this relationship always hold true at any balance sheet date? Explain.

4. Compute the amount by which the year-end balance in finished-goods inventory declined during year 2 (i.e., between December 31 of year 1 and December 31 of year 2):

• Using the data from the balance sheet prepared under absorption costing.

• Using the data from the balance sheet prepared under variable costing.

5. Refer to your calculations from requirement 4. Compute the difference in the amount by which the year-end balances in finished-goods inventory declined under absorption versus variable costing. Then compare the amount of this difference with the difference in the company’s reported operating income for year 2 under absorption versus variable costing.

6. Notice that the retained earnings balance at the end of both years 1 and 2 on the balance sheet prepared under absorption costing is greater than or equal to the corresponding retained earnings balance on the statement prepared under variable costing. Will this relationship hold true at any balance sheet date? Explain.

The process in which an atom becomes an ion is called ?

Mary and Kay, Inc., a distributor of cosmetics throughout Florida, is in the process of assembling a cash budget for the first quarter of 20x1. The following information has been extracted from the company’s accounting records:

• All sales are on account. Sixty percent of customer accounts are collected in the month of sale; 35 percent are collected in the following month. Uncollectibles amounting to 5 percent of sales are anticipated, and management believes that only 20 percent of the accounts outstanding on December 31, 20x0, will be recovered and that the recovery will be in January 20x1.

• Seventy percent of the merchandise purchases are paid for in the month of purchase; the remaining 30 percent are paid for in the month after acquisition.

• The December 31, 20x0, balance sheet disclosed the following selected figures: cash, $20,000; accounts receivable,$55,000; and accounts payable, $22,000.

• Mary and Kay, Inc., maintains a$20,000 minimum cash balance at all times. Financing is available (and retired) in $1,000 multiples at an 8 percent interest rate, with borrowings taking place at the beginning of the month and repayments occurring at the end of the month. Interest is paid at the time of repaying principal and computed on the portion of principal repaid at that time.

• Additional data:

$$\begin{array}{lrrr} & \textbf{January} & \textbf{February} & \textbf{March}\\ \\ \text{Sales revenue } & \$150,000 &\$180,000 & \$185,000\\ \text{Merchandise purchases} &90,000 & 100,000& 140,000\\ \text{Cash operating costs } &31,000 &24,000& 45,000\\ \text{Proceeds from sale of equipment } & —& — &5,000\\ \end{array}$$

Required:

1. Prepare a schedule that discloses the firm’s total cash collections for January through March.

2. Prepare a schedule that discloses the firm’s total cash disbursements for January through March.

3. Prepare a schedule that summarizes the firm’s financing cash flows for January through March. The schedule should present the following information in the order cited: Beginning cash balance, total receipts (from requirement 1), total payments (from requirement 2), the cash excess (deficiency) before financing, borrowing needed to maintain minimum balance, loan principal repaid, loan interest paid, and ending cash balance.

Martha’s Vineyard Marine Supply is a wholesaler for a large variety of boating and fishing equipment. The company’s controller, Mathew Knight, has recently completed a cost study of the firm’s material-handling department in which he used work measurement to quantify the department’s activity. The control factor unit used in the work-measurement study was hundreds of pounds of equipment unloaded or loaded at the company’s loading dock. Knight compiled the following data.

$$\begin{array}{lcr} & \textbf{Units of Activity}\\ & \textbf{(hundreds of pounds of} & \textbf{Material-Handling}\\ \textbf{Month} & \textbf{equipment loaded or unloaded)} & \textbf{Department Costs}\\ \\ \text{January } & 1,400 & \$11,350\\ \text{February} &1,200 & 11,350\\ \text{March } & 1,100 &11,050\\ \text{April } & 2,600 &12,120\\ \text{May } & 1,800 & 11,400\\ \text{June } & 2,000&12,000\\ \text{July } & 2,400 &12,550\\ \text{August } & 2,200 &11,100\\ \text{September } & 1,000 &10,200\\ \text{October } & 1,300&11,250\\ \text{November } & 1,600&11,300\\ \text{December} &1,800&11,700\\ \end{array}$$

Required:

1. Build a spreadsheet: Construct an Excel spreadsheet and use the Excel commands to perform a least-squares regression. Estimate the variable- and fixed-cost components in the company’s material-handling department costs.

2. Write the least-squares regression equation for the department’s costs.

3. Predict the firm’s material-handling department’s costs for a month when 2,300 units of activity are recorded.

4. Why do the three cost predictions computed in this and the preceding problem differ? Which method do you recommend? Why?

5. Build a spreadsheet: Use your Excel spreadsheet from requirement 1 to compute the $R^2$ value for the regression. Interpret the $R^2$ value.

The controller of Chittenango Chain Company believes that the identification of the variable and fixed components of the firm’s costs will enable the firm to make better planning and control decisions. Among the costs the controller is concerned about is the behavior of indirect-materials cost. She believes there is a correlation between machine hours and the amount of indirect materials used.

A member of the controller’s staff has suggested that least-squares regression be used to determine the cost behavior of indirect materials. The regression equation shown below was developed from 40 pairs of observations.

$\quad$ S = $200 +$4H

$\quad$ where S = Total monthly cost of indirect materials

$\quad\quad\quad$ H = Machine hours per month

Required:

1. Explain the meaning of “200” and “4” in the regression equation S = $200 +$4H.

2. Calculate the estimated cost of indirect materials if 900 machine hours are to be used during a month.

3. To determine the validity of the cost estimate computed in requirement 2, what question would you ask the controller about the data used for the regression?

4. The high and low activity levels during the past four years, as measured by machine hours, occurred during April and August, respectively. Data concerning machine hours and indirect material usage follow.

$$\begin{array}{lrr} & \textbf{April} & \textbf{August}\\ \\ \text{Machine hours} & 1,100 & 800\\ \text{Indirect supplies:}\\ \text{$\quad$Beginning inventory} &\$1,200 & \$\hspace{10pt} 950\\ \text{$\quad$Ending inventory } & 1,550 & 2,900\\ \text{$\quad$Purchases} & 6,000 & 6,100\\ \end{array}$$

Determine the cost of indirect materials used during April and August.

5. Use the high-low method to estimate the behavior of the company’s indirect-material cost. Express the cost behavior pattern in equation form.

6. Which cost estimate would you recommend to the controller, the regression estimate or the high low estimate? Why?

Lehighton Chalk Company manufactures sidewalk chalk, which it sells online by the box at $50 per unit. Lehighton uses an actual costing system, which means that the actual costs of direct material, direct labor, and manufacturing overhead are entered into work-in-process inventory. The actual application rate for manufacturing overhead is computed each year; actual manufacturing overhead is divided by actual production (in units) to compute the application rate. Information for Lehighton’s first two years of operation is as follows:

$$\begin{array}{lrr} & \textbf{Year 1} & \textbf{Year 2}\\ \\ \text{Sales (in units)} & 2,500& 2,500\\ \text{Production (in units)} &3,000 & 2,000\\ \text{Production costs:}\\ \text{$\quad$Variable manufacturing cost} & \$ 21,000 & \$ 14,000\\ \text{$\quad$Fixed manufacturing overhead} & 42,000 & 42,000\\ \text{Selling and administrative costs:}\\ \text{$\quad$Variable} & 25,000 & 25,000\\ \text{$\quad$Fixed} & 20,000 & 20,000\\ \end{array}$$

Required:

1. Reconcile Lehighton’s operating income reported under absorption and variable costing, during each year, by comparing the following two amounts on each income statement:

• Cost of goods sold

• Fixed cost (expensed as a period expense)

2. What was Lehighton’s total operating income across both years under absorption costing and under variable costing?

3. What was the total sales revenue across both years under absorption costing and under variable costing?

4. What was the total of all costs expensed on the operating income statements across both years under absorption costing and under variable costing?

Lehighton Chalk Company manufactures sidewalk chalk, which it sells online by the box at $50 per unit. Lehighton uses an actual costing system, which means that the actual costs of direct material, direct labor, and manufacturing overhead are entered into work-in-process inventory. The actual application rate for manufacturing overhead is computed each year; actual manufacturing overhead is divided by actual production (in units) to compute the application rate. Information for Lehighton’s first two years of operation is as follows:

$$\begin{array}{lrr} & \textbf{Year 1} & \textbf{Year 2}\\ \\ \text{Sales (in units)} & 2,500& 2,500\\ \text{Production (in units)} &3,000 & 2,000\\ \text{Production costs:}\\ \text{$\quad$Variable manufacturing cost} & \$ 21,000 & \$ 14,000\\ \text{$\quad$Fixed manufacturing overhead} & 42,000 & 42,000\\ \text{Selling and administrative costs:}\\ \text{$\quad$Variable} & 25,000 & 25,000\\ \text{$\quad$Fixed} & 20,000 & 20,000\\ \end{array}$$

Required:

Lehighton Chalk Company had no beginning or ending work-in-process inventories for either year.

1. Prepare operating income statements for both years based on absorption costing.

2. Prepare operating income statements for both years based on variable costing.

3. Prepare a numerical reconciliation of the difference in income reported under the two costing methods used in requirements 1 and 2.

Consider the following project balances for a typical investment project with a service life of five years:

(a) Fill in the blanks by constructing the original cash flows of the project and determining the terminal balance. (b) Determine the interest rate used in the project-balance calculation, and compute the present worth of this project at the computed interest rate.

A client is scheduled for a spiral computed tomography to scan with contrast to evaluate for pulmonary embolism, which information in the client's history requires follow-up by the nurse?

Scores on the ACT test have a distribution that is approximately normal with a mean of 21.1 and a standard deviation of 5.1. A sample of $80 \mathrm{ACT}$ scores are randomly selected and the sample mean is computed.

What is the mean of all such sample means?

Scores on the ACT test have a distribution that is approximately normal with a mean of 21.1 and a standard deviation of 5.1. A sample of $80 \mathrm{ACT}$ scores are randomly selected and the sample mean is computed.

What is the standard deviation of all such sample means?

Richter scale earthquake magnitudes are listed in Data Set 16 of Appendix B.

For the Richter scale, assume that the magnitude of the energy from an earthquake is first measured, then the logarithm (base 10) of the value is computed. Based on this description of the Richter scale and the result from part ( 2 ), what is the distribution of the original measurements before their logarithms are compared?

Is there a difference in the variation of the yield of five-year CDs at different times? The file CD-FiveYear contains the yields for a five-year certificate of deposit (CD) for 25 banks in the United States, as of March 29, 2010 and August 23, 2010. At the 0.05 level of significance, is there evidence of a difference in the variance of the yield of five-year CDs on March 29, 2010 and August 23, 2010? Assume that the population yields are normally distributed.