CMA Part 1 Answers to Questions November credit sales were $240,000. Of this, 95% will be collected, or $228,000. Of this 40% will be collected In December, or $91,200. 26 c - The budgeted cash receipts in January will include the cash collections on December and January credit sales as well as the cash sales from January. January cash sales were $60,000. Collections on December sales will be $136,800 ($360,000 x .95 x .4), and collections on January credit sales will be $102,600 ($180,000 x .95 x .6). In total, $299,400 will be collected in January. 27 c - This question is asking only about how much money (if any) Raymar will need to borrow in April. Since they also need to have a $100,000 balance at the end of April, the amount that they will need to borrow is the amount by which disbursements exceed collections in April. So, we need to make 2 calculations, what they received and what they paid. We will look first at what they received. In April, they will collect 50% of the April sales ($50,000) and 50% of the March sales ($40,000). This is $45,000 and represents the amount collected in April. In April, they will also need to pay 75% of April payables ($40,000) and 25% of March payables ($30,000). This is in total $37,500. However, they also have $100,000 of total payroll and other disbursements. This brings their total payments in April to $137,500. This is $92,500 more than their receipts. However, as they are able to borrow only in increments of $10,000, they will need to borrow $100,000 in order to maintain a minimum balance of $100,000 at the end of April. 28 d - In this question we will need to determine not only how much money will need to be borrowed in May (if any), but also how much interest will need to be paid in Mayas well. We will start by looking at the amount that needs to be borrowed. This is done in much the same manner as the previous question, calculating the amount of cash paid and received in May. The collections are 50% of April sales ($50,000) and 50% of May sales ($100,000). This is $75,000 received. The disbursements are 75% of May payables ($40,000) and 25% of April payables ($40,000). This is $40,000, to which we need to add the $60,000 of payroll and other disbursements. This is a total of $100,000 in disbursements. This gives a $25,000 shortfall in May that will need to be made up by borrowing. This would appear to require $30,000 in borrowings. However, at the end of April the cash balance was not $100,000, but $107,500 as a result of the need to borrow in even $10,000 amounts. Therefore, they do not need to borrow the full $25,000, but only $17,500. This requires a loan of $20,000. Now we need to look at the interest. Given that they borrowed $100,000 in April, they will need to pay 1% of this in May, or $1,000. Note: This question will not appear like this on the Exam because in order to get the May question correct, as it is asked, you must have also gotten the April question correct. On the Exam they would give you information about April for the May question. 29 d - By definition the coefficient of correlation measures the strength of the relationship between two variables. 30 b - The relationship between these two variables is a perfectly direct relationship - as x increases by 1, Y decreases by 2. Since the variables move in the opposite direction it is a perfectly negative relationship, represented by -1. 31 b - Under exponential smoothing, the most recent results are given more weight than results further in the past. Since the last nine months have seen a significant change, it is important to give more weight to recent results. 32 c - The regression coefficient must lie between -1 and +1. The closer the absolutetalue of the coefficient to 1 the stronger the relationship is. Among the alternatives, -0.89 has the highest absolute value that is not greater than +1 or less than -1. 33 d - According to the regression analysis formula (y = a + bx), inserting in the formula the values given: y = 684.65 + (7.2884 x 420); y = 684.65 + 3061.128; y = 3745.78 34 a - By definition. R change in the dependent variable that can be explained by changes in the independent variable. 35 d - Using cumulative average time learning, when the total quantity of units produced doubles, the cumulative average time per unit required for all the units produced is X% of the cumulative average time per unit required for the original number of units. This question gives labor costs instead of labor time, but since the question also asks for total labor cost, we can use the costs the same way we would use time. We are told that the average labor cost for the first batch is $120 per unit and the cumulative average labor cost after the second batch (the first doubling) is $72 per unit. From this, we can calculate that the learning curve is 60% (72 .;. 120 = .6). If the average cost per unit for the first two batches is $72, then the average cost per unit for all four batches (after the fourth batch - the second doubling) is $72 x .6, or $43.20. Since each batch contains 100 units, 4 batches contain a total of 400 units. If the average cost per unit is $43.20, the total cost for 400 units (4 batches) is $43.20 x 400, or $17,280. 36 a - We have to include the first 50 units manufactured in this analysis, since they contributed to the learning curve. So we will analyze the cost for the first 200 units and then subtract from that the cost for the 2 , or the coefficient of determination, represents the percentage of the total amount of
Posted on: Tue, 18 Mar 2014 11:08:04 +0000
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