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Question: The management of Magnificent Modems Inc. (MMI)

The management of Magnificent Modems Inc. (MMI) is uncertain as to the volume of sales that will exist in Year 1. The president of the company asked the chief accountant to prepare flexible budget income statements assuming that sales activity amounts to 3,000 and 6,000 units. The static budget is shown in the following form. Required 1. Complete the following worksheet to prepare the appropriate flexible budgets. 2. Calculate and show the flexible budget variances for the static budget versus the flexible budget at 6,000 units. 3. Indicate whether each variance is favorable or unfavorable. Table Summary: Flexible Budget Income Statements show 5 columns. Column 1 has entries. Column 2 has values. Column 3 has static budget. Column 4 has flexible budget. Column 5 has flexible budget.
The management of Magnificent Modems Inc. (MMI) is uncertain as to the volume of sales that will exist in Year 1. The president of the company asked the chief accountant to prepare flexible budget income statements assuming that sales activity amounts to 3,000 and 6,000 units. The static budget is shown in the following form.
Required
1. Complete the following worksheet to prepare the appropriate flexible budgets.
2. Calculate and show the flexible budget variances for the static budget versus the flexible budget at 6,000 units.
3. Indicate whether each variance is favorable or unfavorable.
Table Summary: Flexible Budget Income Statements show 5 columns. Column 1 has entries. Column 2 has values. Column 3 has static budget. Column 4 has flexible budget. Column 5 has flexible budget.



> If Best Company sold land that cost $4,200 at a $500 gain, how much cash did it collect from the sale of land?

> Does depreciation expense affect net cash flow? Explain.

> Which of the following activities are financing activities? (a) Payment of accounts payable. (b) Payment of interest on bonds payable. (c) Sale of common stock. (d) Sale of preferred stock at a premium. (e) Payment of a cash dividend.

> Clover Company had a beginning balance in unearned revenue of $4,300 and an ending balance of $3,200. Net income amounted to $54,000. Based on this information alone, determine the amount of net cash flow from operating activities.

> Forsyth Company had a beginning balance in utilities payable of $3,300 and an ending balance of $5,200. Net income amounted to $87,000. Based on this information alone, determine the amount of net cash flow from operating activities.

> During Year 3, Anywhere Inc. (AI) incurred the following product costs. Raw materials $62,000 Labor 89,422 Overhead 58,000 Recall that the Year 2 ending balance in the Work in Process (WIP) account was $26,000. Accordingly, this is the beginning WIP bala

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> What are noncash investing and financing activities? Provide an example. How are such transactions shown on the statement of cash flows?

> What are the three categories of cash flows reported on the cash flow statement? Discuss each and give an example of an inflow and an outflow for each category.

> Can a company report negative net cash flows from operating activities for the year on the statement of cash flows but still have positive net income on the income statement? Explain.

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> What is the major advantage of using the indirect method to present the statement of cash flows?

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> What is the difference between preparing the statement of cash flows using the direct method and using the indirect method?

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> Magnificent Modems Inc. acquired a subsidiary named Anywhere Inc. (AI). AI manufactures a wireless modem that enables users to access the Internet through cell phones. The following Balance Sheet was drawn from the accounts of the subsidiary. The subsidi

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> What is the difference between return on investment and return on equity?

> Why are absolute amounts of limited use when comparing companies?

> What is the difference between the current ratio and the quick ratio? What does each measure?

> What is the significance of inventory turnover, and how is it calculated?

> What is apparent from a horizontal presentation of financial statement information? A vertical presentation?

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> What is information overload?

> What is the formula for calculating return on investment (ROI)?

> Why are ratios and trends used in financial analysis?

> How is indirect labor recorded in ledger accounts? How is this labor eventually assigned to the items produced in a job-order costing system?

> In a job-order costing system, what are the Work in Process Inventory subsidiary records called? What information is included in these subsidiary records?

> How do source documents help accountants operate a costing system?

> Which system, a job-order or a process costing system, requires more documentation?

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> Ludwig Company, which normally operates a process costing system to account for the cost of the computers that it produces, has received a special order from a corporate client to produce and sell 5,000 computers. Can Ludwig use a job-order costing syste

> How is the unit cost of a product determined in a process costing system?

> Why do both job-order and process costing require some form of cost averaging?

> To what types of products is a process costing system best suited? Provide examples.

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> In a process costing system, what does the term transferred-in costs mean? How is the amount of transferred-in costs determined?

> What is the purpose of each of the three primary steps in a process costing system? Describe each.

> What is the weighted average method of determining equivalent units? Why is it used? What are its weaknesses?

> Bindon Furniture Manufacturing has completed its monthly inventory count for dining room chairs and recorded the following information for ending inventory: 600 units 100 percent complete, 300 units 60 percent complete, and 100 units 20 percent complete.

> The president of Videl Corporation tells you that her company has a difficult time determining the cost per unit of product that it makes. It seems that some units are always partially complete. Counting these units as complete understates the cost per u

> Use the June 30, 2020 Form 10-K for Microsoft Corporation to complete the requirements below. To obtain the Form 10-K, you can use the EDGAR system (see Appendix A at the back of this text for instructions), or it can be found under “Investors” on the co

> The following information was taken from GoPro, Inc.'s SEC filings. Table Summary: A table shows 3 columns. Columns 1 has entries. Column 2 has the fiscal year ended. Column 2 is divided into December 31, 2019 and December 31, 2018 Required 1. Explain wh

> Although Zhang Juanjuan won the gold medal in 2008, she did not perform extraordinarily well in the seeding round. How consistent are archers? The seeding round for the women is reported in two halves (1st half and 2nd half in the data file). Are the sco

> In the final round of competition, archers shoot only 12 arrows. Is it likely that an Olympic archer may make no X shots at all? Explain your reasoning. For seeding purposes (that is, to set up the final elimination round matches), the total score on the

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> For each of the following descriptions, select the letter of the inference method you would use. (It is possible for a method to be used more than once or not at all.) 1. Student t for a mean 2. one-proportion z 3. χ2 goodness-of-fit 4. two-proportion z

> But maybe the BMIs of all the participants changed during the four-week period. We can calculate the change in BMI for each participant in the study, and then compare the mean change for the 41 maids in the informed group with the mean change for the 34

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> Consider the relationship between the life expectancy (in years) and the illiteracy rate (per hundred people) in the 50 U.S. states plus Washington, DC. A linear model is run and the output is presented here: Residual standard deviation: 1.097 on 48 degr

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> The following table summarizes 1529 films from 2014 and 2015 that have been classified into a genre and have a MPAA rating. (Data from Movies 06-15) 1. What percent of these films were rated R? 2. What percent of these films were R-rated comedies? 3. Wha

> During contract negotiations, a company seeks to change the number of sick days employees may take, saying that the annual average is 7 days of absence per employee. The union negotiators counter that the average employee misses only 3 days of work each

> A clerk entering salary data into a company spreadsheet accidentally put an extra “0” in the boss salary, listing it as $2,000,000 instead of $200,000. Explain how this error will affect these summary statistics for the company payroll: 1. Measures o

> Test scores from a calculus section of 40 students are shown in the histogram below. Describe the distribution of scores. Why might you be less sure of the description of the shape as compared to the histogram in Exercise 51?

> Test scores from a large calculus class of 400 are shown in the histogram below 1. Describe the distribution of scores. What might account for this shape? 2. Why might both the mean and median score be misleading as a summary of the center?

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> A survey of athletic trainers asked what modalities (treatment methods such as ice, whirlpool, ultrasound, or exercise) they commonly use to treat injuries. Respondents were each asked to list three modalities. The article included the following figure r

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> An investigator compiled information about recent nonmilitary plane crashes. The causes, to the extent that they could be determined, are summarized in the table. 1. Is it reasonable to conclude that the weather or mechanical failures caused only about 3

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> The Chance article about the Houston magnet schools program described in Exercise 37 also indicated that 517 applicants were black or Hispanic, 292 Asian, and 946 white. Summarize the relative frequency distribution of ethnicity with a sentence or two (i

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> The A Chance magazine article described in Chapter 2, Exercise 37 further examined the impact of an applicant ethnicity on the likelihood of admission to the Houston Independent School District magnet schools programs. Those data are summarized in the ta

> Here is a bar chart summarizing the movie genres from the 891 movies in Exercise 3. (Data extracted from Movies 06-15) 1. Were Thriller/Suspense or Adventure films more common? 2. Is it easier to answer the question from the bar chart or from the pie cha

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> Would you expect distributions of these variables to be uniform, unimodal, or bimodal? Symmetric or skewed? Explain why. 1. The number of speeding tickets each student in the senior class of a college has ever had 2. Players scores (number of strokes) at

> Find an article in a newspaper, a magazine, or the Internet that discusses a measure of spread. 1. Does the article discuss the W for the data? 2. What are the units of the variable? 3. Does the article use the range, IQR, or standard deviation? 4. Is th

> Find an article in a newspaper, a magazine, or the Internet that discusses an average. 1. Does the article discuss the W for the data? 2. What are the units of the variable? 3. Is the average used the median or the mean? How can you tell? 4. Is the choic

> Find a graph other than a histogram that shows the distribution of a quantitative variable in a newspaper, a magazine, or the Internet. 1. Does the article identify the W? 2. Discuss whether the display is appropriate for the data. 3. Discuss what the di

> Find a histogram that shows the distribution of a variable in a newspaper, a magazine, or the Internet. 1. Does the article identify the W? 2. Discuss whether the display is appropriate. 3. Discuss what the display reveals about the variable and its dist

> Find a table of categorical data from a newspaper, a magazine, or the Internet. 1. Is it clearly labeled? 2. Does it display percentages or counts? 3. Does the accompanying article tell the W of the variables? 4. Do you think the article correctly interp

> Find a frequency table of categorical data from a newspaper, a magazine, or the Internet. 1. Is it clearly labeled? 2. Does it display percentages or counts? 3. Does the accompanying article tell the W of the variable? 4. Do you think the article correct

> Find a pie chart of categorical data from a newspaper, a magazine, or the Internet. 1. Is the graph clearly labeled? 2. Does it violate the area principle? 3. Does the accompanying article tell the W of the variable? 4. Do you think the article correctly

> Look again at the table of political views for the Intro Stats students in Exercise 30. 1. Find the conditional distributions (percentages) of political views for the females. 2. Find the conditional distributions (percentages) of political views for the

> Find a bar chart of categorical data from a newspaper, a magazine, or the Internet. 1. Is the graph clearly labeled? 2. Does it violate the area principle? 3. Does the accompanying article tell the W of the variable? 4. Do you think the article correctly

> Here is a mosaic plot of the data on being successful from Exercise 10: 1. Are the differences in sample sizes in the four groups very large? Explain briefly. 2. Which factor seems more important in determining how someone responded: Age or Gender? Expla

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> Pew Research (www.pewsocialtrends.org/2013/03/14/modern-parenthood-roles-of-moms-and-dads converge-as-they-balance-work-and-family/) surveyed parents and asked how many hours they spent in various activities. They compared 2011 responses with those from

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