See Table down below showing financial statement data and st

accounting

The postclosing trial balance of the general fund of Serene Hospital, a not-for-profit entity, on December 31, 20X1, was as follows:

\begin{array}{lrr} & \textbf{ Debit } & \textbf{Credit} \\ \\ \text{Cash} & \$\hspace{10pt}125,000 \\ \text{Accounts Receivable} & 400,000 \\ \text{Allowance for Uncollectibles} && \$\hspace{15pt}50,000 \\ \text{Due from Specific - Purpose Fund} & 40,000 \\ \text{Inventories} & 95,000 \\ \text{Prepaid Expenses} & 20,000 \\ \text{Investments} & 900,000 \\ \text{Property, Plant \& Equipment} & 6,100,000 \\ \text{Accumulated Depreciation} & & 1,500,000 \\ \text{Accounts Payable} & & 150,000 \\ \text{Accrued Expenses} & & 55,000 \\ \text{Deferred Revenue - Reimbursement} & & 75,000 \\ \text{Bonds Payable} & & 3,000,000 \\ \text{Fund Balance - Without Donor Restrictions} && 2,850,000 \\ \hline \text{Total} & \underline{\underline{\$7,680,000}} & \underline{\underline{\$7,680,000}}\\ \end{array}

During 20X2 the following transactions occurred:

1. Provided the value of patient services, $6,160,000.

2. Approved contractual adjustments of$330,000 from patients' bills.

3. Had operating expenses totaling $5,600,000 as follows:

\begin{array}{lr} \text{Nursing services} & \$1,800,000 \\ \text{Other professional services} & 1,200,000\\ \text{Fiscal services} & 250,000 \\ \text{General services} & 1,550,000\\ \text{Bad debts} & 120,000 \\ \text{Administration} & 280,000 \\ \text{Depreciation} & 400,000 \\ \end{array}

Accounts credited for operating expenses other than depreciation:

\begin{array}{lr} \text{Cash} & \$4,580,000 \\ \text{Allowance for Uncollectibles} & 120,000 \\ \text{Accounts Payable} & 170,000 \\ \text{Accrued Expenses} & 35,000 \\ \text{Inventories} & 195,000 \\ \text{Prepaid Expenses} & 30,000 \\ \text{Donated Services} & 70,000 \\ \end{array}

4. Received $75,000 cash from specific-purpose fund for partial reimbursement of$100,000 for operating expenditures made in accordance with a restricted gift. The receivable increased by the remaining $25,000 to an ending balance of$65,000.

5. Had payments for inventories and prepaid expenses of $176,000 and$24,000, respectively.

6. Received $85,000 income from endowment fund investments.

7. Sold for$17,000 an X-ray machine that had cost $30,000 and had accumulated depreciation of$20,000.

8. Collected $5,800,000 in receivables and wrote off$132,000.

9. Acquired investments amounting to $60,000.

10. Had$72,000 income from board-designated investments.

11. Paid the beginning balance in Accounts Payable and Accrued Expenses.

12. Had a $20,000 increase in Deferred Revenue-Reimbursement.

13. Received$140,000 from the plant replacement and expansion fund for acquiring fixed assets.

14. Had $63,000 in net receipts from the cafeteria and gift shop.

Required

Prepare a statement of cash flows for 20X2.

accounting

Petah, Ltd., of Tel Aviv, Israel, has budgeted costs in its various departments as follows for the coming year:

(in shekel)

\begin{array}{lrr} \text{Factory Administration}&&540,000\\ \text{Custodial Services}&&137,520\\ \text{Personnel}&&57,680\\ \text{Maintenance }&&90,400\\ \text{Stamping—overhead}&&752,600\\ \text{Assembly—overhead}&\hspace{40pt}&\underline{\hspace{15pt}351,800}\\ \text{Total overhead cost}&&\underline{\underline{\hspace{5pt}1,930,000}}\\\\ \end{array}

The company allocates service department costs to other departments, in the order listed below.

	Number of Employees	Total LaborHours	Square Meters of Space Occupied	Direct Labor Hours	Machine Hours
Factory Administration	22	---	5,000	---	---
Custodial Services	8	6,000	2,000	---	---
Personnel	10	10,000	3,000	---	---
Maintenance	50	44,000	10,000	---	---
Stamping—overhead	80	60,000	70,000	40,000	140,000
Assembly—overhead	120	180,000	20,000	160,000	20,000
	290	300,000	110,000	200,000	160,000

Stamping and Assembly are operating departments; the other departments are service departments. Factory Administration is allocated on the basis of labor-hours; Custodial Services on the basis of square meters occupied; Personnel on the basis of number of employees; and Maintenance on the basis of machine-hours.

Required:

Allocate service department costs to consuming departments by the step-down method. Then compute predetermined overhead rates in the operating departments, using a machine-hours basis in Stamping and a direct labor-hours basis in Assembly.
Repeat (1) above, this time using the direct method. Again, compute predetermined overhead rates in Stamping and Assembly.
Assume that the company doesn’t bother with allocating service department costs but simply computes a single plantwide overhead rate based on total overhead costs (both service department and operating department costs) divided by total direct labor-hours. Compute the plantwide overhead rate.
Suppose a job requires machine and labor time as follows:

	Machine-Hours	Direct Labor-Hours
Stamping Department	190	25
Assembly Department	10	75
Total hours	200	100

Using the overhead rates computed in (1), (2), and (3) above, compute the amount of overhead cost that would be assigned to the job if the overhead rates were developed using the step-down method, the direct method, and the plantwide method. (Round allocations to the nearest whole shekel.)

accounting

Courtside Concepts Co. began business on January 2, 2011. Salaries were paid to employees on the last day of each month, and social security tax, Medicare tax, and federal income tax were withheld in the required amounts. An employee who is hired in the middle of the month receives half the monthly salary for that month. All required payroll tax reports were filed, and the correct amount of payroll taxes was remitted by the company for the calendar year. Early in 2012, before the Wage and Tax Statements (Form W-2) could be prepared for distribution to employees and for filing with the Social Security Administration, the employees’ earnings records were inadvertently destroyed.

None of the employees resigned or were discharged during the year, and there were no changes in salary rates. The social security tax was withheld at the rate of 6.0% and Medicare tax at the rate of 1.5% on salary. Data on dates of employment, salary rates, and employees’ income taxes withheld, which are summarized as follows, were obtained from personnel records and payroll records:

\begin{array}{lccc} \text { Employee } & \begin{array}{c} \text { Date First } \\ \text { Employed } \end{array} & \begin{array}{c} \text { Monthly } \\ \text { Salary } \end{array} & \begin{array}{c} \text { Monthly } \\ \text { Income Tax } \\ \text { Withheld } \end{array} \\ \hline \text { Garnett } & \text { Jan. } 2 & \$ 4,400 & \$ 706 \\ \text { Kidd } & \text { Oct. } 1 & 7,200 & 1,442 \\ \text { J. O'Neal } & \text { Apr. } 16 & 3,600 & 506 \\ \text { Bryant } & \text { Nov. } 1 & 3,000 & 356 \\ \text { S. O'Neal } & \text { Jan. } 16 & 12,800 & 3,012 \\ \text { Marbury } & \text { Dec. } 1 & 5,000 & 856 \\ \text { Duncan } & \text { Feb. 1 } & 11,200 & 2,564 \end{array}

Instructions

Calculate the amounts to be reported on each employee’s Wage and Tax Statement (Form W-2) for 2011
Calculate the following employer payroll taxes for the year: (a) social security; (b) Medicare; (c) state unemployment compensation at 4.6% on the first $10,000 of each employee’s earnings; (d) federal unemployment compensation at 0.8% on the first$10,000 of each employee’s earnings; (e) total.

business

See Table down below showing financial statement data and stock price data for Mydeco Corp.

a. What were Mydeco's gross margins each year?

b. Comparing Mydeco's gross margin, EBIT margin, and net profit margin in $2012$ to $2016$ , which margins improved?

2012–2016 Financial Statement Data and Stock Price Data for Mydeco Corp

Mydeco Corp. 2012–2016 $\hspace{30mm}$ (All data as of fiscal year end; in $million)$

\begin{array}{lccccc} \text{Income statement} & 2012 & 2013 & 2014 & 2015 & 2016 \\ \text{Revenue} & 401.9 & 361.6 & 429.6 & 513.6 & 602.6 \\ \underline{\text{Cost of Goods Sold}} & (192.1) & (175.4) & (207.1) & (248.3) & (295.8)\\ \text{Gross Profit} & 209.8 & 186.2 & 222.5 & 265.3 & 306.8\\ \text{Sales and Marketing} & (65.0) & (64.4) & (84.3) & (104.9) & (121.1)\\ \text{Administration} & (61.8) & (57.1) & (59.0) & (66.9) & (79.8)\\ \underline{\text{Depreciation $\And$ Amortization}} & (27.5) & (26.3) & (32.5) & (38.3) & (40.1)\\ \text{EBIT} & 55.5 & 38.4 & 46.7 & 55.2 & 65.8\\ \underline{\text{Interest Income (Expense)}} & (32.4) & (31.8) & (32.0) & (37.0) & (40.9)\\ \text{Pretax Income} & 23.1 & 6.6 & 14.7 & 18.2 & 24.9\\ \underline{\text{Income Tax}} & (8.1) & (2.3) & (5.1) & (6.4) & (8.7)\\ \text{Net Income} & 15.0 & 4.3 & 9.6 & 11.8 & 16.2\\ \text{Shares outstanding (millions)} & 56.8 & 56.8 & 56.8 & 56.8 & 56.8\\ \text{Earnings per share} & \$0.26 & \$0.08 & \$0.17 & \$0.21 & \$0.29\\ \text{Balance Sheet} & 2012 & 2013 & 2014 & 2015 & 2016\\ \text{Assets}\\ \text{Cash} & 49.4 & 68.0 & 91.7 & 80.4 & 83.6\\ \text{Accounts Receivable} & 87.6 & 70.6 & 69.3 & 77.4 & 84.2\\ \text{Inventory} & 33.5 & 32.2 & 27.3 & 30.2 & 35.8\\ \text{Total Current Assets} & 170.5 & 170.8 & 188.3 & 188.0 & 203.6\\ \text{Net Property, Plant $\And$ Equip.} & 244.3 & 243.3 & 306.1 & 349.6 & 347.9\\ \text{Goodwill $\And$ Intangibles} & 365.5 & 365.5 & 365.5 & 365.5 & 365.5\\ \text{Total Assets} & 780.3 & 779.6 & 859.9 & 903.1 & 917.0\\ \text{Liabilities $\And$ Stockholders’ Equity}\\ \text{Accounts Payable} & 18.8 & 18.8 & 22.4 & 27.1 & 30.3\\ \text{Accrued Compensation} & 7.6 & 6.3 & 7.5 & 7.7 & 9.4\\ \text{Total Current Liabilities} & 26.4 & 25.1 & 29.9 & 34.8 & 39.7\\ \text{Long-term Debt} & 498.9 & 498.9 & 572.2 & 597.5 & 597.5\\ \text{Total Liabilities} & 525.3 & 524 & 602.1 & 632.3 & 637.2\\ \text{Stockholders’ Equity} & 255.0 & 255.6 & 257.8 & 270.8 & 279.8\\ \text{Total Liabilities $\And$ Stockholders’ Equity} & 780.3 & 779.6 & 859.9 & 903.1 & 917.0\\ \text{Statement of Cash Flows} & 2012 & 2013 & 2014 & 2015 & 2016\\ \text{Net Income} & 15.0 & 4.3 & 9.6 & 11.8 & 16.2\\ \text{Depreciation $\And$ Amortization} & 27.5 & 26.3 & 32.5 & 38.3 & 40.1\\ \text{Chg. in Accounts Receivable} & 3.9 & 17.0 & 1.3 & (8.1) & (6.8)\\ \text{Chg. in Inventory} & (2.9) & 1.3 & 4.9 & (2.9) & (5.6)\\ \underline{\text{Chg. in Payables $\And$ Accrued Comp.}} & 1.7 & (1.3) & 4.8 & 4.9 & 4.9\\ \text{Cash from Operations} & 45.2 & 47.6 & 53.1 & 44.0 & 48.8\\ \underline{\text{Capital Expenditures}} & (26.6) & (23.8) & (97.5) & (75.4) & (40.0)\\ \text{Cash from Investing Activities} & (26.6) & (23.8) & (97.5) & (75.4) & (40.0)\\ \text{Dividends Paid} & (5.2) & (5.2) & (5.2) & (5.2) & (5.6)\\ \text{Sale (or purchase) of stock} & — & — & — & — & —\\ \underline{\text{Debt Issuance (Pay Down)}} & — & — & 73.3 & 25.3 & —\\ \text{Cash from Financing Activities} & (5.2) & (5.2) & 68.1 & 20.1 & (5.6)\\ \text{Change in Cash} & 13.4 & 18.6 & 23.7 & (11.3) & 3.2\\ \text{Mydeco Stock Price} & \$7.02 & \$3.55 & \$5.86 & \$8.33 & \$11.57\\ \end{array}

$

statistics

One of the most famous presidential elections (from a statistician's point of view) is the 1936 contest between incumbent Franklin D. Roosevelt (FDR) and Republican challenger Alf Landon. The notoriety of the election comes from the fact that polling done by Literary Digest suggested that Landon would win by a 3 to 2 margin. However, Roosevelt actually crushed Landon in the general election. After the election, author and editor David Lawrence studied the vote. Lawrence asked the following question: "To what extent was the campaign a reflection of a new trend in American politics, a trend in which the federal government's paternalistic interest in the citizen brought an amazing reward to the party in power?"As part of FDR's New Deal policies to help get the United States out of the Great Depression, the federal government created the Agricultural Adjustment Administration (AAA). The AAA tried to force higher prices for commodities by paying farmers not to farm and not to bring cattle to market. To determine whether farm subsidies may have played a role in the election results, Lawrence looked at election results in 2052 counties. He segmented the counties based on AAA funding between 1934 and 1935 as follows: High-funded AAA counties received $500,000 or more in AAA money. Medium-funded AAA counties received between$100,000 and $500,000 in AAA money. Low-funded AAA counties received some AAA money, but less than$100,000. Counties with no AAA-fund did not receive any funds. Treat the following data as a random sample of voters within each county type. The results are based on the election results in the various counties.

\begin{matrix} \text{ } & \text{High-Funded} & \text{Medium-Funded} & \text{Low-Funded} & \text{No Funding}\\ \text{Roosevelt} & \text{745} & \text{641} & \text{513} & \text{411}\\ \text{London} & \text{498} & \text{484} & \text{437} & \text{465}\\ \end{matrix}

(a) Do the data suggest that the level of funding received by counties through the AAA is associated with the candidate? Use the $\alpha$=0.05 level of significance. (b) Construct a conditional distribution of candidate by level of AAA funding and draw a bar graph.

business

Percents of on-time arrivals for flights in 2006 and 2007 were collected for 11 randomly selected airports. Data for these airports follow (Research and Innovative Technology Administration website, August 29, 2008). Use $\alpha$ = .05 to test the hypothesis that there is no difference between the median percent of on-time arrivals for the two years. What is your conclusion?

	Percent On Time
Airport	2006	2007
Boston Logan	71.78	69.69
Chicago O’Hare	68.23	65.88
Chicago Midway	77.98	78.40
Denver	78.71	75.78
Fort Lauderdale	77.59	73.45
Houston	77.67	78.68
Los Angeles	76.67	76.38
Miami	76.29	70.98
New York (JFK)	69.39	62.84
Orlando	79.91	76.49
Washington (Dulles)	75.55	72.42

business

The National Oceanic and Atmospheric Administration reports the following record high temperatures (degrees Fahrenheit) in 50 U.S. cities. These data are also provided in the file XR02056.

,City Temperature Mobile, AL 105 Juneau, AK 90 Phoenix, AZ 122 Little Rock, AR $\quad 112$ Los Angeles, CA $\quad 110$ Denver, CO 105 Hartford, CT 102 Wilmington, DE 102 Miami, FL 98 Atlanta, GA $\quad 105$ Honolulu, HI 95 Boise, 10 111 Chicago, IL 104 Indianapolis, IN $\quad 104$ Des Moines, IA 108 Wichita, KS 113 Louisville, KY 106 New Orleans, LA 102 Portland, ME 103 Baltimore, MD 105 Boston, MA 102 (continued)

City Temperature Detroit, MI 104 Duluth, MN 97 Jackson, MS 107 St. Louis, MO $\quad 107$ Great Falls, MT $\quad 106$ Omaha, NE $\quad 114$ Reno, NV 108 Concord, $\mathrm{NH}$ Atlantic City, NJ 106 Albuquerque, NM $\quad 107$ Buffalo, NY 99 Charlotte, NC $\quad 104$ Bismarck, ND $\quad 111$ Cleveland, $\mathrm{OH}$ Oklahoma City, OK $\quad 110$ Portland, OR $\quad 107$ Pittsburgh, PA 103 Providence, RI $\quad 104$ Columbia, SC 107 Sioux Falls, SD $\quad 110$ Nashille, TN $\quad 107$ Houston, TX 109 Salt Lake City, UT $\quad 107$ Burlington, VT 101 Norfolk, VA 104 Seattle, WA 100 Charleston, WV 104 Milwaukee, WI 103

\begin{array}{ll}\text { Cheyenne, WY } & 100\end{array}

c. Determine the interval width and the class mark for each of the classes in your frequency distribution.

accounting

The Lexington Company produces gas grills. This year’s expected production is 20,000 units. Currently, Lexington makes the side burners for its grills. Each grill includes two side burners. Lexington’s management accountant reports the following costs for making the 40,000 burners:

\begin{array}{lrr} &\textbf { Cost per Unit }&\textbf { Costs for 40,000 Units }\\ \hline \text { Direct materials } & \$ 8.00 & \$ 320,000 \\ \text { Direct manufacturing labor } & 4.00 & 160,000 \\ \text { Variable manufacturing overhead } & 2.00 & 80,000 \\ \text { Inspection, setup, materials handling } & & 8,000 \\ \text { Machine rent } & & 12,000 \\ \text { Allocated fixed costs of plant administration, taxes, and insurance } & & \underline{~~~~80,000} \\ \text { Total costs } & & \underline{\underline{\$ 660,000}} \end{array}

Lexington has received an offer from an outside vendor to supply any number of burners Lexington requires at $14.80 per burner. The following additional information is available:

a. Inspection, setup, and materials-handling costs vary with the number of batches in which the burners are produced. Lexington produces burners in batch sizes of 1,000 units. Lexington will produce the 40,000 units in 40 batches.

b. Lexington rents the machine it uses to make the burners. If Lexington buys all of its burners from the outside vendor, it does not need to pay rent on this machine.

Assume that if Lexington purchases the burners from the outside vendor, the facility where the burners are currently made will remain idle. On the basis of financial considerations alone, should Lexington accept the outside vendor’s offer at the anticipated volume of 40,000 burners? Show your calculations.
For this question, assume that if the burners are purchased outside, the facilities where the burners are currently made will be used to upgrade the grills by adding a rotisserie attachment. (Note: Each grill contains two burners and one rotisserie attachment.) As a consequence, the selling price of grills will be raised by$48. The variable cost per unit of the upgrade would be $38, and additional tooling costs of$160,000 per year would be incurred. On the basis of financial considerations alone, should Lexington make or buy the burners, assuming that 20,000 grills are produced (and sold)? Show your calculations.
The sales manager at Lexington is concerned that the estimate of 20,000 grills may be high and believes that only 16,000 grills will be sold. Production will be cut back, freeing up work space. This space can be used to add the rotisserie attachments whether Lexington buys the burners or makes them in-house. At this lower output, Lexington will produce the burners in 32 batches of 1,000 units each. On the basis of financial considerations alone, should Lexington purchase the burners from the outside vendor? Show your calculations.

accounting

The Svenson Corporation manufactures cellular modems. It manufactures its own cellular modem circuit boards (CMCB), an important part of the cellular modem. It reports the following cost information about the costs of making CMCBs in 2014 and the expected costs in 2015:

\begin{array}{lcc} &\textbf{Current Costs}&\textbf{Expected }\\ &\textbf{in 2014} &\textbf{Costs in 2015}\\\hline \text{Variable manufacturing costs}\\ \quad\text{Direct material cost per CMCB} &\$~~~~~~180 &\$~~~~~~170\\ \quad\text{Direct manufacturing labor cost per CMCB} &~~~~~~~~~~50 &~~~~~~~~~~45\\ \quad\text{Variable manufacturing cost per batch for setups, materials }\\ \quad\text{handling, and quality control}& ~~~~1,600 &~~~~1,500\\ \text{Fixed manufacturing cost}\\ \quad\text{Fixed manufacturing overhead costs that can be avoided if CMCBs }\\ \quad\text{are not made} &320,000 &320,000\\ \quad\text{Fixed manufacturing overhead costs of plant depreciation,} \\ \quad\text{insurance, and administration that cannot be avoided even if }\\ \quad\text{CMCBs are not made}& 800,000 &800,000 \end{array}

Svenson manufactured 8,000 CMCBs in 2014 in 40 batches of 200 each. In 2015, Svenson anticipates needing 10,000 CMCBs. The CMCBs would be produced in 80 batches of 125 each.

The Minton Corporation has approached Svenson about supplying CMCBs to Svenson in 2015 at $300 per CMCB on whatever delivery schedule Svenson wants.

Calculate the total expected manufacturing cost per unit of making CMCBs in 2015.
Suppose the capacity currently used to make CMCBs will become idle if Svenson purchases CMCBs from Minton. On the basis of financial considerations alone, should Svenson make CMCBs or buy them from Minton? Show your calculations.
Now suppose that if Svenson purchases CMCBs from Minton, its best alternative use of the capacity currently used for CMCBs is to make and sell special circuit boards (CB3s) to the Essex Corporation. Svenson estimates the following incremental revenues and costs from CB3s:

Particulars	Amount
Total expected incremental future revenues	$2,000,000
Total expected incremental future costs	$2,150,000

On the basis of financial considerations alone, should Svenson make CMCBs or buy them from Minton? Show your calculations.

accounting

CTU Industries, Inc., began business on January $2$ , $2009$ . Salaries were paid to employees on the last day of each month, and social security tax, Medicare tax, and federal income tax were withheld in the required amounts. An employee who is hired in the middle of the month receives half the monthly salary for that month. All required payroll tax reports were filed, and the correct amount of payroll taxes was remitted by the company for the calendar year. Early in $2010$ , before the Wage and Tax Statements (Form W- $2$ ) could be prepared for distribution to employees and for filing with the Social Security Administration, the employees’ earnings records were inadvertently destroyed.
$\hspace{10pt}$ None of the employees resigned or were discharged during the year, and there were no changes in salary rates. The social security tax was withheld at the rate of $6.0\%$ on the first $\$100,000$ of salary and Medicare tax at the rate of $1.5\%$ on salary. Data on dates of employment, salary rates, and employees’ income taxes withheld, which are summarized as follows, were obtained from personnel records and payroll records:

\begin{array}{lccc} &&& \textbf{Monthly}\\ & \textbf{Date First} & \textbf{Monthly} & \textbf{Income Tax}\\ \textbf{Employee} & \textbf{Employed} & \textbf{Salary} & \textbf{Withheld}\\ \hline \text{Brown} & \text{Aug.}\hspace{9pt} 1 & \$3,600 & \$\hspace{13pt}552\\ \text{Carroll} & \text{Jan.}\hspace{9pt} 2 & \hspace{5pt} 9,500 & \hspace{5pt}2,113\\ \text{Grobe} & \text{May}\hspace{9pt} 1 & \hspace{5pt}6,500 & \hspace{5pt}1,277\\ \text{Meyer} & \text{July}\hspace{9pt} 1 & \hspace{5pt}4,200 & \hspace{15pt}702\\ \text{Saban} & \text{Jan.}\hspace{9pt} 2 & \hspace{5pt}5,100 & \hspace{15pt}927\\ \text{Tressel} & \text{Apr.}\ 16 & \hspace{5pt}3,200 & \hspace{15pt}452\\ \text{Weis} & \text{Oct.}\hspace{9pt} 1 & \hspace{5pt}3,000 & \hspace{15pt}402 \end{array}

$\textsf{\textcolor{#4257b2}{Instructions}}$
$1$ . Calculate the amounts to be reported on each employee’s Wage and Tax Statement (Form W- $2$ ) for $2009,$ arranging the data in the following form:

\begin{array}{ccccc} & \textbf{Gross} & \textbf{Federal Income} & \textbf{Social Security} & \textbf{Medicare Tax}\\ \textbf{Employee} & \textbf{Earnings} & \textbf{Tax Withheld} & \textbf{Tax Withheld} & \textbf{Withheld}\\ \hline \end{array}

$2$ . Calculate the following employer payroll taxes for the year: $\left(\text{a}\right)$ social security; $\left(\text{b}\right)$ Medicare; $\left(\text{c}\right)$ state unemployment compensation at $4.8\%$ on the first $\$10,000$ of each employee’s earnings; $\left(\text{d}\right)$ federal unemployment compensation at $0.8\%$ on the first $\$10,000$ of each employee’s earnings; $\left(\text{e}\right)$ total.

business

The National Occupant Protection Use Survey (NOPUS) was conducted to provide probability-based data on motorcycle helmet use in the United States. The survey was conducted by sending observers to randomly selected roadway sites where they collected data on motorcycle helmet use, including the number of motorcyclists wearing a Department of Transportation (DOT)-compliant helmet (National Highway Traffic SafetyAdministration website, January 7, 2010). Sample data consistent with the most recent NOPUS are shown below.

	Type of Helmet
Region	DOT-Compliant	Noncompliant
Northeast	96	62
Midwest	86	43
South	92	49
West	76	16
Total	350	170

a. Use the sample data to compute an estimate of the probability that a motorcyclist wears a DOT-compliant helmet.

b. The probability that a motorcyclist wore a DOT-compliant helmet five years ago was .48, and last year this probability was .63. Would the National Highway Traffic Safety Administration be pleased with the most recent survey results?

c. What is the probability of DOT-compliant helmet use by region of the country? What region has the highest probability of DOT-compliant helmet use?

business

See Table down below showing financial statement data and stock price data for Mydeco Corp.

Was Mydeco able to improve its ROIC in $2016$ relative to what it was in $2012$ ?

2012–2016 Financial Statement Data and Stock Price Data for Mydeco Corp

Mydeco Corp. 2012–2016 $\hspace{30mm}$ (All data as of fiscal year end; in $million)$

\begin{array}{lccccc} \text{Income statement} & 2012 & 2013 & 2014 & 2015 & 2016 \\ \text{Revenue} & 401.9 & 361.6 & 429.6 & 513.6 & 602.6 \\ \underline{\text{Cost of Goods Sold}} & (192.1) & (175.4) & (207.1) & (248.3) & (295.8)\\ \text{Gross Profit} & 209.8 & 186.2 & 222.5 & 265.3 & 306.8\\ \text{Sales and Marketing} & (65.0) & (64.4) & (84.3) & (104.9) & (121.1)\\ \text{Administration} & (61.8) & (57.1) & (59.0) & (66.9) & (79.8)\\ \underline{\text{Depreciation $\And$ Amortization}} & (27.5) & (26.3) & (32.5) & (38.3) & (40.1)\\ \text{EBIT} & 55.5 & 38.4 & 46.7 & 55.2 & 65.8\\ \underline{\text{Interest Income (Expense)}} & (32.4) & (31.8) & (32.0) & (37.0) & (40.9)\\ \text{Pretax Income} & 23.1 & 6.6 & 14.7 & 18.2 & 24.9\\ \underline{\text{Income Tax}} & (8.1) & (2.3) & (5.1) & (6.4) & (8.7)\\ \text{Net Income} & 15.0 & 4.3 & 9.6 & 11.8 & 16.2\\ \text{Shares outstanding (millions)} & 56.8 & 56.8 & 56.8 & 56.8 & 56.8\\ \text{Earnings per share} & \$0.26 & \$0.08 & \$0.17 & \$0.21 & \$0.29\\ \text{Balance Sheet} & 2012 & 2013 & 2014 & 2015 & 2016\\ \text{Assets}\\ \text{Cash} & 49.4 & 68.0 & 91.7 & 80.4 & 83.6\\ \text{Accounts Receivable} & 87.6 & 70.6 & 69.3 & 77.4 & 84.2\\ \text{Inventory} & 33.5 & 32.2 & 27.3 & 30.2 & 35.8\\ \text{Total Current Assets} & 170.5 & 170.8 & 188.3 & 188.0 & 203.6\\ \text{Net Property, Plant $\And$ Equip.} & 244.3 & 243.3 & 306.1 & 349.6 & 347.9\\ \text{Goodwill $\And$ Intangibles} & 365.5 & 365.5 & 365.5 & 365.5 & 365.5\\ \text{Total Assets} & 780.3 & 779.6 & 859.9 & 903.1 & 917.0\\ \text{Liabilities $\And$ Stockholders’ Equity}\\ \text{Accounts Payable} & 18.8 & 18.8 & 22.4 & 27.1 & 30.3\\ \text{Accrued Compensation} & 7.6 & 6.3 & 7.5 & 7.7 & 9.4\\ \text{Total Current Liabilities} & 26.4 & 25.1 & 29.9 & 34.8 & 39.7\\ \text{Long-term Debt} & 498.9 & 498.9 & 572.2 & 597.5 & 597.5\\ \text{Total Liabilities} & 525.3 & 524 & 602.1 & 632.3 & 637.2\\ \text{Stockholders’ Equity} & 255.0 & 255.6 & 257.8 & 270.8 & 279.8\\ \text{Total Liabilities $\And$ Stockholders’ Equity} & 780.3 & 779.6 & 859.9 & 903.1 & 917.0\\ \text{Statement of Cash Flows} & 2012 & 2013 & 2014 & 2015 & 2016\\ \text{Net Income} & 15.0 & 4.3 & 9.6 & 11.8 & 16.2\\ \text{Depreciation $\And$ Amortization} & 27.5 & 26.3 & 32.5 & 38.3 & 40.1\\ \text{Chg. in Accounts Receivable} & 3.9 & 17.0 & 1.3 & (8.1) & (6.8)\\ \text{Chg. in Inventory} & (2.9) & 1.3 & 4.9 & (2.9) & (5.6)\\ \underline{\text{Chg. in Payables $\And$ Accrued Comp.}} & 1.7 & (1.3) & 4.8 & 4.9 & 4.9\\ \text{Cash from Operations} & 45.2 & 47.6 & 53.1 & 44.0 & 48.8\\ \underline{\text{Capital Expenditures}} & (26.6) & (23.8) & (97.5) & (75.4) & (40.0)\\ \text{Cash from Investing Activities} & (26.6) & (23.8) & (97.5) & (75.4) & (40.0)\\ \text{Dividends Paid} & (5.2) & (5.2) & (5.2) & (5.2) & (5.6)\\ \text{Sale (or purchase) of stock} & — & — & — & — & —\\ \underline{\text{Debt Issuance (Pay Down)}} & — & — & 73.3 & 25.3 & —\\ \text{Cash from Financing Activities} & (5.2) & (5.2) & 68.1 & 20.1 & (5.6)\\ \text{Change in Cash} & 13.4 & 18.6 & 23.7 & (11.3) & 3.2\\ \text{Mydeco Stock Price} & \$7.02 & \$3.55 & \$5.86 & \$8.33 & \$11.57\\ \end{array}

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business

See Table down below showing financial statement data and stock price data for Mydeco Corp.

a. By how much did Mydeco increase its debt from $2012$ to $2016$ ?

b. What was Mydeco's EBITDA/Interest coverage ratio in $2012$ and $2016$ ? Did its coverage ratio ever fall below $2$ ?

c. Overall, did Mydeco's ability to meet its interest payments improve or decline oyer this period?

2012–2016 Financial Statement Data and Stock Price Data for Mydeco Corp

Mydeco Corp. 2012–2016 $\hspace{30mm}$ (All data as of fiscal year end; in $million)$

\begin{array}{lccccc} \text{Income statement} & 2012 & 2013 & 2014 & 2015 & 2016 \\ \text{Revenue} & 401.9 & 361.6 & 429.6 & 513.6 & 602.6 \\ \underline{\text{Cost of Goods Sold}} & (192.1) & (175.4) & (207.1) & (248.3) & (295.8)\\ \text{Gross Profit} & 209.8 & 186.2 & 222.5 & 265.3 & 306.8\\ \text{Sales and Marketing} & (65.0) & (64.4) & (84.3) & (104.9) & (121.1)\\ \text{Administration} & (61.8) & (57.1) & (59.0) & (66.9) & (79.8)\\ \underline{\text{Depreciation $\And$ Amortization}} & (27.5) & (26.3) & (32.5) & (38.3) & (40.1)\\ \text{EBIT} & 55.5 & 38.4 & 46.7 & 55.2 & 65.8\\ \underline{\text{Interest Income (Expense)}} & (32.4) & (31.8) & (32.0) & (37.0) & (40.9)\\ \text{Pretax Income} & 23.1 & 6.6 & 14.7 & 18.2 & 24.9\\ \underline{\text{Income Tax}} & (8.1) & (2.3) & (5.1) & (6.4) & (8.7)\\ \text{Net Income} & 15.0 & 4.3 & 9.6 & 11.8 & 16.2\\ \text{Shares outstanding (millions)} & 56.8 & 56.8 & 56.8 & 56.8 & 56.8\\ \text{Earnings per share} & \$0.26 & \$0.08 & \$0.17 & \$0.21 & \$0.29\\ \text{Balance Sheet} & 2012 & 2013 & 2014 & 2015 & 2016\\ \text{Assets}\\ \text{Cash} & 49.4 & 68.0 & 91.7 & 80.4 & 83.6\\ \text{Accounts Receivable} & 87.6 & 70.6 & 69.3 & 77.4 & 84.2\\ \text{Inventory} & 33.5 & 32.2 & 27.3 & 30.2 & 35.8\\ \text{Total Current Assets} & 170.5 & 170.8 & 188.3 & 188.0 & 203.6\\ \text{Net Property, Plant $\And$ Equip.} & 244.3 & 243.3 & 306.1 & 349.6 & 347.9\\ \text{Goodwill $\And$ Intangibles} & 365.5 & 365.5 & 365.5 & 365.5 & 365.5\\ \text{Total Assets} & 780.3 & 779.6 & 859.9 & 903.1 & 917.0\\ \text{Liabilities $\And$ Stockholders’ Equity}\\ \text{Accounts Payable} & 18.8 & 18.8 & 22.4 & 27.1 & 30.3\\ \text{Accrued Compensation} & 7.6 & 6.3 & 7.5 & 7.7 & 9.4\\ \text{Total Current Liabilities} & 26.4 & 25.1 & 29.9 & 34.8 & 39.7\\ \text{Long-term Debt} & 498.9 & 498.9 & 572.2 & 597.5 & 597.5\\ \text{Total Liabilities} & 525.3 & 524 & 602.1 & 632.3 & 637.2\\ \text{Stockholders’ Equity} & 255.0 & 255.6 & 257.8 & 270.8 & 279.8\\ \text{Total Liabilities $\And$ Stockholders’ Equity} & 780.3 & 779.6 & 859.9 & 903.1 & 917.0\\ \text{Statement of Cash Flows} & 2012 & 2013 & 2014 & 2015 & 2016\\ \text{Net Income} & 15.0 & 4.3 & 9.6 & 11.8 & 16.2\\ \text{Depreciation $\And$ Amortization} & 27.5 & 26.3 & 32.5 & 38.3 & 40.1\\ \text{Chg. in Accounts Receivable} & 3.9 & 17.0 & 1.3 & (8.1) & (6.8)\\ \text{Chg. in Inventory} & (2.9) & 1.3 & 4.9 & (2.9) & (5.6)\\ \underline{\text{Chg. in Payables $\And$ Accrued Comp.}} & 1.7 & (1.3) & 4.8 & 4.9 & 4.9\\ \text{Cash from Operations} & 45.2 & 47.6 & 53.1 & 44.0 & 48.8\\ \underline{\text{Capital Expenditures}} & (26.6) & (23.8) & (97.5) & (75.4) & (40.0)\\ \text{Cash from Investing Activities} & (26.6) & (23.8) & (97.5) & (75.4) & (40.0)\\ \text{Dividends Paid} & (5.2) & (5.2) & (5.2) & (5.2) & (5.6)\\ \text{Sale (or purchase) of stock} & — & — & — & — & —\\ \underline{\text{Debt Issuance (Pay Down)}} & — & — & 73.3 & 25.3 & —\\ \text{Cash from Financing Activities} & (5.2) & (5.2) & 68.1 & 20.1 & (5.6)\\ \text{Change in Cash} & 13.4 & 18.6 & 23.7 & (11.3) & 3.2\\ \text{Mydeco Stock Price} & \$7.02 & \$3.55 & \$5.86 & \$8.33 & \$11.57\\ \end{array}

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