Question 1 (4 points) Arident Inc. reports the following information for the first quarter of the current year: Property taxes, plant $12,000 Work-in-process, Jan 1 80,000 Direct labor 510,000 Work-in-process, Mar 31 92,000 Sales salaries 80,000 Leasing costs, plant 20,000 Advertising costs 50,000 Materials purchased 460,000 Materials inventory, Jan 1 40,000 Finished goods, Jan 1 110,000 Materials inventory, Mar 31 26,000 Finished goods, Mar 31 140,000 Machine helpers wages 6,000 Sales 3,000,000 Depreciation, plant 70,000 Depreciation, Office 50,000 Sales Commissions 120,000 Presidents salary 200,000 Insurance, factory equipment 8,000 Office supplies 10,000 Office administration costs 180,000 Units completed 15,000 Determine the following for Arident Inc.: (1/2 point each) 1. Cost of DM used 2. Total Manufacturing Cost 3. Cost of Goods Manufactured 4. Cost of Goods Sold 5. Gross Margin 6. Operating Expenses 7. Net Income (Loss) (assuming a 40% tax bracket) 8. Unit Cost Question 2 (4 points) Larry Marks, the plant manager at Super Retailers is attempting to identify the variables that effect weekly sales of a relatively new detergent at his store. Correctly identifying the variables is important to ensure that money is spent in the right channels to boost sales and also for managing costs within the store. After considerable effort and elimination of a number of variables, Larry has identified the dollar amount spent on advertising and the square feet of shelf space allocated to this new product as two potential variables that effect future sales of this detergent. After identifying these variables, Larry has collected data (as shown in the table below) for the past 20 weeks. Larry is not sure about how to proceed from this point. He wants to know if these variables are good estimators of future sales. He has now approached you, the controller, with the following questions. Week Sales ($) Advertising ($) Shelf Space (ft2 ) 1 2,090 210 78 2 1,850 205 50 3 2,450 355 81 4 1,575 208 30 5 3,750 610 87 6 2,015 397 50 7 4,110 820 89 8 1,870 400 30 9 4,877 997 75 10 2,490 385 42 11 5,005 996 75 12 2,500 625 50 13 3,605 885 62 14 3,480 1012 50 15 5,500 1135 75 16 2,995 1,135 54 17 2,390 837 30 18 4,890 1860 72 19 2785 990 30 20 4989 2205 49 1. Based on the above data and using regression analysis, determine and state the cost estimation model to predict sales. Attach a copy of the regression output. (1 point) 2. State the R 2 and the t-stat's. Describe what these numbers mean. (2 points) 3. Use the model to forecast sales if Larry expects to spend $840 on advertising and allocate 65 square feet of shelf space to this new product in the 21st week. (1 point) Question 3 (2 points) Presented below are the factory overhead costs for Wagner Co. for the last six months of the year. Wagner Co. uses the high-low method. Month Overhead Cost Units July $24,450 8,200 August $49,800 15,800 September $32,400 10,600 October $44,200 15,000 November $19,800 5,800 December $36,680 13,200 1. State the estimated overhead cost model for Wagner Co. (1 point) 2. Use the above model to determine the estimated overhead cost at an operating level of 10,000 units. (1 point)