Week 1 Discussion


Introduce Yourself

Please introduce yourself to your classmates and professor and discuss your experience and understanding of Finance and Accounting.

Consider the following:

Personal and professional background

What is your level of financial proficiency?

How do you use financial information in your position?

Do you have any finance fears?

What financial skills would you like to further develop?

Do you currently partner with finance colleagues? If so, what “value add” do these partners provide?

This week only, post your initial response by Friday, midnight of your time zone, and reply to at least 2 of your classmates’ initial posts by Sunday, midnight of your time zone.??



Week 2 Discussion

Balance Sheet Analysis

The discussion questions for Weeks 2 – 4 are designed to help teach you to derive meaning from financial statements. Each week you will select a line item and use Variance Trend Analysis to make some initial assessments about how the company is performing.  Collectively, as a class we will seek to find the “story behind the numbers.”

Let’s start applying what you have learned to a real-life Balance Sheet.

Locate and post a screen shot of a Balance Sheet from the investor relations section of the website from the latest fiscal year for one of the following companies:



Pick a Balance Sheet line item from the following list:

Accounts Receivable


Property, Plant, and Equipment (PP&E)

Accounts Payable

Long-Term Debt

Total Equity

Retained Earnings

What does Read More 

this line item measure and why is it important item for Management to understand this number?

From the Balance Sheet, identify the Current Year and the Previous Year closing amounts for your line item. Share these with the class using a data table similar to the below:

Jack’s Toy Shop
(In thousands)
2018 2017
Inventory $336.2 $304.5


Answer the following questions:

Has the amount for the line item increased or decreased, and by how much (dollar and/or percentage)?

Is this a “good” thing or a “bad” thing for this company?

What might this mean for the organization?

What might management do to improve this line item?



Week 3 Discussion

Income Statement Analysis

This week’s DQ focuses on the Income Statement. It builds on the insights we gained in Week 2, but goes a little deeper in our use of financial statement analysis skills.

Locate and post a screen shot of an actual Income Statement from the latest fiscal year for one of the following companies:

Sears (Note: use this link Sears Holding Corp 10-K )


Pick an Income Statement Line Item or Ratio from the list below:

Line Item Ratio

  • Revenue (aka Sales, Turnover)
  • Cost of Goods Sold/Cost of Sales
  • Salary Expense
  • Selling, General and Administrative Expense
  • Gross Profit
  • Operating Profit
  • Net Profit

  • Gross Margin (%)
  • Net Margin (%)
  • Salary Expense as % of Sales
  • Return on Sales
  • Return on Equity
  • Return on Assets
  • Earnings Per Share (EPS)


What does this line item or ratio measure and why is it important item for Management to understand this number?

Identify the past 4 years of amounts for your line item or ratio (Note: this will require you to track down additional historical Income Statements to get the older data). Share this data with the class using a data table or chart.

Answer the following questions:

What is the trend for this line item or ratio?

Has the line item or ratio amount increased or decreased?

Is this a “good” thing or a “bad” thing? For this company?

What might management do to improve this line item or ratio?

Post your initial response by Wednesday, midnight of your time zone, and reply to at least 2 of your classmates’ initial posts by Sunday, midnight of your time zone.?



Week 4 Discussion

Cash Flow Statement Analyis

This week we turn to the last of the major financial statements – the Cash Flow Statement.

Locate and post a screen shot of an actual Cash Flow Statement from the latest fiscal year for one of the following companies:



Your own Company (or any company you choose)

Pick a Cash Flow Statement line item or ratio from the following list:

Line Item Ratio

  • Net Change in Cash
  • Cash Flow from Operations
  • Cash Flow from Investing
  • Cash Flow from Financing
  • Capital Expenditures
  • Dividends Paid
  • Proceeds from Long Term Debt

  • Cash Flow Return on Assets
  • Dividend Payout Ratio
  • Cap Ex to Depreciation Ratio
  • Free Cash Flow

What does this line item or ratio measure and why is it important for Management to understand this number

From the Cash Flow Statement, identify the past 4 years of amounts for your line item or ratio. Share this data with the class using a data table or chart.

Answer the following questions:

What is the trend for this line item or ratio?

Has the line item or ratio amount increased or decreased?

Is this a “good” or a “bad” thing for this company?

What might management do to improve this line item or ratio?



Week 5 Discussion

Earnings Call Review

Listen to (or read the transcript of) your organization’s or any publicly traded company’s most recent quarterly earnings call and respond to the following questions:

TIP: To find an earnings call or transcript, go to the “Investor Relations” section of the company’s website. There you will find links to financial reports and recordings of recent calls.

Identify the company you selected.

Have you ever listened to an earnings call?

What topics were included? Which were most helpful or insightful? Were there topics you wished were included or expanded upon?

Was there a discussion of profit or EPS by Company Management? Explain what this implies, what is the driving force, and what actions you would recommend?

Were the analysts’ questions aggressive and challenging or supportive and respectful? How well did management respond to the questions?

What additional insights were you able to gain in regards to the company’s financial health, forward guidance, and strategic financial decisions?

Was there any information or perspective shared that a competitor could benefit from?

If you were an employee of this company, how could you leverage this resource to benefit you or your company?

Post your initial response by Wednesday, midnight of your time zone, and reply to at least 2 of your classmates’ initial posts by Sunday, midnight of your time zone.?






Week 6 Discussion


Option 1

Your team has been assigned to design and launch of a new product or service. This could be an external product for sale or an internal service to support other departments. As you prepare for your first team meeting, you know that identifying and classifying costs will be an essential part of the project.

Briefly explain what the new offering is (Note: this can be hypothetical or based on your current role at your company; you should not share any proprietary information)

Identify and describe one fixed cost and one variable cost in your department, and explain whether they are controllable or non-controllable.

Identify whether these costs are traceable to direct materials, direct labor, or overhead.

– OR –

Option 2

Consider your current organization, describe how costing is used or could be used to better understand the financial breakdown of products and/or services delivered. Would this information support you in your current role and/or aspired-to role? Have you seen instances where costing is not used effectively or could be better leveraged?

Post your initial response by Wednesday, midnight of your time zone, and reply to at least 2 of your classmates’ initial posts by Sunday, midnight of your time zone.?



Week 7 Discussion

Costing Systems and Analysis

Option 1

Discuss the usage and creation of standard costs by an operation. How are these costs developed? How can they be used in the creation of a forecast? How can these be used in an individual or organizational measurement system?

– OR –

Option 2

Discuss a current business activity that you or your department does that could be improved by leveraging Variance Analysis. Discuss the perspective you could gain, and what a “favorable price” and a “favorable quantity” variance mean in this application.


Post your initial response by Wednesday, midnight of your time zone, and reply to at least 2 of your classmates’ initial posts by Sunday, midnight of your time zone.?



Week 8 Discussion

Cost Benefit Analyisis

Option 1

As we discovered this week from our readings and video’s, not all cost-benefit decisions can be made from strictly financial data.  Thinking about a project you have worked on or proposed, or a project which you feel is critical in your company or community, give an example of a non-financial metric which should be considered and why you think that non-financial metric should result in the approval of the project.

– OR –

Option 2

Your New Product Development initiative is at the stage where a Cost-Benefit Analysis is needed to prepare for the final presentation to management.  There are multiples metrics you could use to quantify the benefit of your proposal (incremental sales, nominal payback, discounted payback, NPV and IRR).  Choose the one that you feel is most crucial and would best help Management see the value in your proposal. Explain what the metric shows and then discuss how you would go about gathering the data and calculating this for your new initiative (and, if you have already done this in real life, share what you did and what response you got from Management).

Post your initial response by Wednesday, midnight of your time zone, and reply to at least 2 of your classmates’ initial posts by Sunday, midnight of your time zone.?



Week 9 Discussion

Forecasting and CBA

Option 1

As we are discovering, Cost Benefit Analysis is based on assumptions about financial forecasts of future cash flows and expenses. Since the future is unknown, getting consensus on inputs can often be the most challenging part of running a Cost Benefit Analysis.

In Assignment 2, we find five colleagues who each have very different views of the future. Referencing our readings this week and drawing on your own personal experiences, answer the following questions:

Why do skilled professionals working in the same business often have significantly different forecasts and views of the future?  Share an example from your own work experience where your colleagues had very different forecasts for the same item.

How can we make better use of data (past performance, industry outlook, etc.) to improve our forecasts and resolve disagreements?

Would “sensitivity analysis” have helped Management understand the potential variations driven by changes in assumptions?

After the forecast is complete, describe the communication process you would use to convey results and successes to stakeholders, lenders, and employees.

– OR

Option 2

As you’re learning in Assignment 2, a key technique in managerial accounting/finance is the use of “Cost Benefit Analysis” to help management make better business decisions.

Define this approach in your own words and discuss 2 applications of this concept in your current work environment (examples might include make vs. buy, plant location, new product or packaging, downsizing, acquisition/divestiture, etc.).

Discuss a variable or assumption within the project where the data was difficult to obtain — and what you did to develop a reasonable assumption for the project economics.

Additionally, share or create one example where using financial data and cost benefit analysis that did, or could have, led to a better decision.

Post your initial response by Wednesday, midnight of your time zone, and reply to at least 2 of your classmates’ initial posts by Sunday, midnight of your time zone.?



Week 10 Discussion


Describe your company’s annual budget process.

What is your involvement in the process?

What works well? What doesn’t work?

If you were CEO/CFO, what changes would you make and why?

How would you communicate to employees the value that the process brings to the business?






Assignment 1


A critical financial accounting skill is the ability to read, analyze, and make actionable decisions from any financial statement. Business leaders gain valuable information from the annual reports of direct competitors, companies that operate in similar fields, and companies in which they are considering an investment or partnership.


You are the CFO of a family owned, regional carpet/flooring retailer looking to partner with a manufacturer and focus on selling their products exclusively. Your CEO has narrowed the field down to two manufacturers, and is requesting your analysis and guidance. She has asked you to do a financial review of recent results from Mohawk Industries (MHK) and The Dixie Group (DXYN). You have decided to organize your work into TWO components:

Part A: Financial Analysis Snapshot of key data from the annual reports

Part B: Executive Memo and brief Video Presentation of your analysis

Part A: Financial Analysis Snapshot

• All work is to be completed and submitted in the attached Excel template.

• Go to the Investor Relations section of each company’s website and download their annual reports.

You may need to download more than one report to get all required historical data.

• Use the Annual Reports/10K to populate the Excel template.

o Some entries simply require finding the respective line item amounts, while others will require calculations (these are indicated in in template).

o Note that some historical data and ratios have already been provided in the template.

Part B: Executive Memo and Video Presentation

Present a synopsis of your analysis in an executive memo you would feel comfortable turning in to your CEO or to Jack. You may organize the memo as you see fit, but it must follow the principles of good business communication. To support your executive memo, record a brief video presentation highlighting the key points of your findings.

For your executive memo, answer the following questions:

1. Profitability/Net Income Margins

• What are the after-tax net income margins (i.e., net profit margins) for both companies?

• How do they compare?

• Who achieves the higher net income margin? Why?

Tip: Analyze the major cost structure line items in the income statement (COGS, SG&A, interest, other, and taxes) as percentages of net sales, so you can identify reasons for better net income margins. Identify and comment on the differences. You may not know why a particular cost item like COGS is higher or lower, and that’s okay. Your CEO only wants to know which cost-structure items are higher or lower for each company.

2. Inventory Management

• Who does a better job managing their inventory (Inventory Days on Hand ratio)?

• What are their respective 3-year trends for Inventory DOH?

• What options could the company consider to improve inventory management?

3. Cash Is King

• How much net cash from operations did each company generate last year?

• Which company has done a better job generating cash from operations?

• In layman’s terms, how is each company spending their cash with respect to reinvestments in the business, changes in debt, and returning money to shareholders?

4. Liquidity

• How do the companies compare in terms of the current ratio, and what are their respective 3- year trends?

• Do their current ratios indicate that either of these companies could go bankrupt soon?


For your video presentation, complete the following tasks:

1. Create a PowerPoint deck in support of your financial presentation

• Highlight your key findings from your Executive Memo and Financial Analysis Snapshot.

Focus on the most important insights that would be helpful for the leadership team.

• Your PowerPoint should be complementary to your Executive Memo and your Financial

Analysis Snapshot.

i. Assume your CEO will have access to the documents, so just hit the high points.

ii. Keep your slides legible. Avoid small fonts, too much text, or distracting graphics.

iii. Keep it brief, using a maximum of 5 slides.

2. Record your financial presentation using ZOOM

• Record both the PowerPoint deck and your webcam feed simultaneously.

• Practice your presentation. You may record as many times as you wish prior to submitting.

• Maintain eye contact, speak conversationally and professionally, use an engaging tone, and

dress appropriately.

• Your video must be no longer than 5 minutes.

Submission Requirements

• Your executive memo should be no more than 2 pages, single-spaced, using 10- or 12-point font.

You may also include an appendix with additional references, graphs, charts, and tables for additional support if needed.

• Your video recording should not exceed 5 minutes in length.

• Your PowerPoint deck must not exceed 5 slides (not including cover page or references, if desired).

• Video instructions and samples can be viewed at:



Assignment 2

Cost-Benefit Analysis


In this assignment, you will take on the role of a senior member of the finance team assigned to lead the investment committee of a medium-sized telecommunications equipment manufacturer. Your team isevaluating a “make-versus-buy” decision that has the potential to improve the company’s competitiveness,but which requires a significant capital investment in new equipment. The assignment is organized into twoparts:

Part A: Data calculations based on the information in the scenarios

Part B: Recommendations based on the calculations

Opportunity Details

The new equipment would allow your company to manufacture a critical component in-house instead of buying it from a supplier. This capability would help you stabilize your supply chain (which has suffered from some irregularities and quality issues in the past). It could also have a positive impact on profitability through the absorption of fixed costs since this new machine will have plenty of excess capacity. There may even be a possibility that the company could leverage this capability to create a new external revenue stream by providing services to other companies.

The company has been growing steadily over the past 5 years, and the financials and future prospects look good. Your CEO has asked you to run the numbers. After doing some digging into the business, you have gathered information on the following:

Assignment 2

Input from Stakeholders

As part of your research, you have sought input from a number of stakeholders. Each has raised importantpoints to consider in your analysis and recommendation. Some of the points and assumptions are purely financial. Others touch on additional concerns and opportunities.

1. Andrew, your colleague from Accounting, recommends using the base assumptions above: 5-year project life, flat annual savings, and 10% discount rate. Andrew does not feel the equipment will have any terminal value due to advancements in technology.

2. Stanley from Sales is convinced that this capability would create a new revenue stream that could significantly offset operating expenses. He recommends savings that grow each year: 5-year project life, 10% discount rate, and a 10% annual savings growth in years 2 through 5. In other words, instead of assuming savings stay flat, assume that they will grow by 10%% in year 2, and then grow another 10% over year 2 in year 3, and so on. Stanley feels that the stated terminal value is reasonable and used it in his calculations.

3. Eva from Engineering believes we use a higher Discount Rate because of the risk of this type of project. As such, she is recommending a 5-year project life and flat annual savings. Eva suggests that even though the equipment is brand new, the updated production process could have a negative impact on other parts of the overall manufacturing costs. She argues that, while it is difficult to quantify the potential negative impacts, to account for the risk, a 12% discount rate should be used.Being an engineer, Eva feels that the stated terminal value is low based on her experience, and is recommending a $75,000 terminal value,

4. Paul, the Product Manager, is convinced the new capability will allow better control of quality and on-time delivery, and that it will last longer than 5 years. He recommends using a 7 Year Equipment Life (which means a 7-year project and that savings will continue for 7 years), flat annual savings, and 10% discount rate. In other words, assume that the machine will last 2 more years and deliver 2 more years of savings. Paul also feels the equipment will have an estimated terminal value of $25,000 at the end of its 7- year useful life as it will be utilized longer thus having less value at the end of the project and savings.

5. Olivia, the head of Operations, is concerned that instead of stabilizing the supply chain, it will just add another process to be managed, and will distract from the core competencies the company currently has. She feels the company should focus on improving communication and supply chain management with its current vendor, and she feels confident he can negotiate a discount of 4% off of the annual outsourcing cost of $1,200,000 if she lets it be known they are considering taking over this step of the process. As there is little risk associated with Olivia’s proposal due to no upfront capital requirements,a lower risk-free discount rate of 7% would be appropriate. Oliva feels that any price reductions from the current vendor will last for five years. (NOTE: because there is no “investment”, the Payback and IRR metrics are not meaningful. Simply provide the NPV of the Savings cash flows).

JWI 530: Financial Management I

Assignment 2

PART A: Data Calculations

Using the data presented above (and ignoring the extraneous information), for this profit and supply chain improvement project, calculate each of the following (where applicable):

• Nominal Payback

• Discounted Payback

• Net Present Value

• Internal Rate of Return

Scenario Nominal




Net Present


Internal Rate

of Return

#1: Andrew

#2: Stanley

#3: Eva

#4: Paul

#5: Olivia N/A N/A N/A

Submission Requirements

Present your calculations and results either in an Excel Spreadsheet or in Word (using tables and headers to organize the information in a way that is clear and easy to read). Be sure to show your detailed calculations.

If you get something wrong, you may still be able to get partial credit.

Part B: Recommendations

After completing the calculations for all scenarios, create a brief memo to the CEO outlining your committee’s recommendations. You may organize the memo as you see fit, but it must include the following:

• A clear opening statement of your recommendation for or against the project.

• A brief synopsis of the processes and factors that led to your recommendations.

o What information did you gather, and how did you get it?

o From whom did you seek input, and why?

• A summary of the strategic benefits and risks in pursuing (or not pursuing) this project, including:

o Highlights of the main data points that support your position

o Acknowledgement of the data points that oppose your argument

o Identification of open/unresolved items

• An identification of the scenario that, from a purely financial perspective, represents the most accurate estimate of the anticipated results and your rationale as to why.

• An identification of non-financial elements that need to be considered for the recommended scenario.

• Any assumptions in project economics can have a significant impact on the result. Identify 3 financial elements/assumptions in your analysis that would make this project financially unattractive. Be as transparent and candid with your BOD as possible. What would have to be true for this to be a bad investment?

• A summary restating your recommendation and key action items.

Submission Requirements

• Your memo should be no more than 2 pages, single-spaced, using 10- or 12-point font.

• Focus on the rationale for your recommendations. Include key numbers to support your recommendations but do no re-present all your calculations.



Week 1 Knowledge Check

Question 1Historical cost is an accounting principle that says what a company owns is originally recorded at which of the following


A. Appraised value

B. Purchase cost

C. Insured value

D. Market value

Question 2Generally accepted accounting principles include


A. Revenue recognition

B. Matching revenues and expenses

C. Historical cost

D. Full disclosure

E. All of the above

Question 3Which of the following statements are


A. Revenues are top line

B. Profits are bottom line

C. Both A and B

D. Costs are the same as expenses

Question 4The finance department has responsibility for which of the following


A. Treasury function

B. Insurance and risk management

C. Mergers and acquisitions

D. All of the above




Week 2 Knowledge Check

Question 1Match each term with the definition.






Question 2Financial Statements like the Balance Sheet are required to have standard titles and formats.

Match the phrases – in the sequence – with the 3 lines on a Balance Sheet for “Company ABC”:


Line 1:

Line 2:

Line 3:

Question 3Top Rated Cars is a worldwide manufacturer of cars and trucks. They maintain a reserve on the balance sheet for future warranty claims. The balance in this account at December 31, 2015, 2016, 2017, and 2018 (in millions) was: $315.0, $329.0, $354.7 and $361.9 respectively. In addition, revenues for the same periods were (in millions): $10,000.8, $10,122.0, $10,098.6 and $9,999.6. From this data, one could surmise that the quality of their cars and trucks is improving.

Question 4Weather Bank Corporation shows the following selected items on its current balance sheet: (1) Total current assets of $123,487; (2) Total Current Liabilities of $98,459; (3) Total assets of $500,084 and (4) Total stockholders’ equity of $239,765. Remember A=L+E. What are the Total Liabilities?

Question 5Weather Bank Corporation shows the following selected items on its current balance sheet: (1) Total current assets of $123,487; (2) Total current liabilities of $98,459; (3) Total assets of $500,084; and (4) Total stockholders’ equity of $239,765. Remember, A = L + E. Based upon this information, the current ratio is:



Week 3 Knowledge Check

Question 1          What are the different names for the income statement? Select all that apply:

A. Profit and Loss Statement

B. Gross Profit and Loss Statement

C. Net Margin Statement

D. Statement of income and expenses

Question 2          Which item is not depreciable?

A. Land

B. Furniture

C. Vehicles

D. Manufacturing Machinery

Question 3Expenses are recorded when…

A. A purchase order is issued

B. A supplier agrees to goods and services ordered

C. At the end of the month

D. When the supplier acts on the promise to deliver

Question 4          Which financial report most used by nonfinancial managers.

A. Balance Sheet

B. Cash Flow Statement

C. Income Statement

D. Statement of Retained Earnings



Week 4 Knowledge Check

Question 1The Cash Flow Cycle includes which of the following activities:


A. Setup

B. Production

C. Sales

D. All of the above

Question 2Capital Expenditures is the amount spent for contract labor used in the business, and reported under Cash for Investing.




Question 3Most small businesses, and all large ones, favor accrual basis books over cash basis books for all of the following reasons EXCEPT:


A. They’re concerned about the profit margin on products they sell.

B. They want to know when they’re making money and when they’re not.

C. Accrual basis accounting always shows a higher profit than cash basis of accounting.

D. They’re required by lenders, investors or government authorities to report their activities using accrual basis accounting

Question 4Free Cash Flow is defined as:


A. A measure of ongoing cash flow from normal business activities (including CapEx)

B. A list of dividend payments made to shareholders.

C. Any cash flow given as bonus compensation to executives.

D. Cash flows raised from debt and equity offerings.



Week 5 Knowledge Check

Question 1According to the GAO Internal Controls article, the key elements of Internal Controls that should be a part of Enterprise Risk Management (ERM) includes which of the following components?


A. Monitoring Activities

B. Control Activities

C. Risk Assessment

D. All Answers are

E. Control Environment

F. Information and Communication

Question 2You are a Division Manager and the administrative assistant, who is preparing an expense report for Frank, one of your direct reports, approaches you because she discovers that Frank used the company credit card to purchase jewelry for his wife. What is the best course of action to be taken by the Division Manager?


A. Just ignore it since he exceeded his sales goal by more than a million dollars for the last 3 years straight.

B. Call Internal Controls and Human Resources to start the termination process.

C. Schedule a meeting with Frank to review this personal purchase that was made on his company credit, advise him that he will need to pay for it immediately, and reinforce the credit card policy as it relates to making personal purchases.

D. Schedule a meeting with Frank to let him know that you caught him red-handed however next time, you will overlook it, as long as he also purchases jewelry for you as well.

Question 3Larry is an employee of Cracker Jack Electronics, and he needs his business travel expenses reimbursed, but must have approval for payment. He completes an expense report and attaches all of his receipts and submits it. Suzanna is Larry’s supervisor, and the assistant controller for Cracker Jack Electronics, and she is responsible for verifying Larry’s expense report and signing off on it for approval for reimbursement. This arrangement is called:


A. Separation of Functions

B. Labor-saving Productivity

C. Segregation of Duties

D. Both Separation of Functions and Segregation of Duties

E. Collusion

Question 4Which of the following is true as it relates to internal controls?


A. It is a set of rules or procedures that a company puts in place for conducting its business

B. It ensures that there is a system of checks and balances in place

C. It is aimed at protecting the integrity of financial information and safeguarding company assets

D. Prevents waste and misuse of assets and resources

E. Ensure bills are paid timely and that accounting transactions are recorded ly

F. All of the Above



Week 6 Knowledge Check

Question 1Financial accounting is primarily externally directed, meaning financial accounting’s main function is informing external stakeholders such as lenders, shareholders and governmental agencies. Managerial accounting, on the other hand, is primarily internally directed, meaning managerial accounting is directed towards helping leadership and management operate the business on a day-to-day basis. Which of the following is NOT true?


A. Variable or direct costing is allowed for financial reporting purposes under both GAAP and IFRS.

B. Managerial accounting is essential to determining product and service pricing.

C. Inventory is an asset to both financial and managerial accountants.

D. Standard costs are not very important to most financial accountants.

Question 2Match each term to its definition.

Question             Match   Selected Match

Job costing

Process costing

Bill of materials

Standard costing

All Answer Choices

A. A management tool that estimates the overall cost of production, assuming normal operations.

B. Collecting costs for a manufacturing process that’s geared to producing products in individual lots and assigning cost to those jobs.

C. Collecting all costs incurred in a continuous process, then averaging the costs over all units produced.

D. A list of all the parts and components that go into manufacturing a product, including any raw material.

Question 3Match each cost to its cost driver.

Question             Match   Selected Match

Cost of wood for wood-burning pizza oven

Cost of machine lubricants

Cost of round steel bars

Cost of jet fuel for an airliner

All Answer Choices

A. Baking pizzas

B. Flying the airliner

C. Producing Screws

D. Running machine

Question 4The ABC Company, maker of birdhouses is looking at different ways of allocating shared costs (overhead). The Cost Accountant has been provided the following data for the past month:

Birdhouse Models           Quantity Produced          Total Machine Hours     Total Labor Hours

Basic     100         10           25

Standard             100         20            40

Deluxe 25           40           60

The Spend pools are provided as:

Material: $3000

Direct Labor: $5000

Overhead: $2000

If Overhead is allocated based on the activity of Quantity Produced, how much of the $2,000 cost will be allocated to the Deluxe Birdhouse?

A. $222

B. $888

C. $960

D. $1,142



Week 7 Knowledge Check

Question 1Variance analysis is a very important tool for financial analyses. As soon as the variance is computed, the exact reasons are for the variance are clear.




Question 2Wilson is a cost analyst, and he has just received a standard cost report for October 2018. Wilson notes that the report shows a negative variance for materials – the annotation is 2,388 pounds used, 2,154 pounds standard. This illustrates what is called an unfavorable rate variance.




Question 3Standards are the cost system that estimates costs incurred and time used and compares to actual costs.




Question 4The Institute of Management Accountants (IMA) has promulgated an ethics code for management accountants called The Statement of Ethical Practice, which has four standards of ethical conduct. Which of the following is NOT one of those standards?


A. Competence

B. Credibility

C. Continuing Education

D. Integrity

E. Confidentiality





Week 8 Knowledge Check

Question 1The present value is the sum of money received in the future.




Question 2The PV factor for a cash flow in 3 years using an 8% discount rate is:


A. .7894

B. .6405

C. 1.08

D. .7938

Question 3The weighted cost of capital does not include which of the following?


A. Capital employed by the business

B. Capital obtained from trade credit

C. Risk Premium

D. Percent of Stock Buy Backs

Question 4Hamilton Corporation has decided to seek outside financing. The CFO is attempting to compute Hamilton’s weighted average cost of capital. You have been provided the following information.

Capital Structure              Weight Cost

Debt     30.00% 11.60%

Preferred           15.00% 12.10%

Common Equity               55.00% 16.70%

The weighted average cost of capital for Hamilton is:


A. 14.5%

B. 11.3%

C. 22.0%

D. 10.1%



Week 9 Knowledge Check

Question 1A Financing Plan is a special version of a Strategic Plan written to attract top talent to a company.




Question 2Creating the forward-looking view of financial performance is a surprisingly effective way to transform the financial future of your company. It will:


A. Help you drive growth, profitability and cash flow higher.

B. Create confidence and clarity about where your business is going financially.

C. Provide the roadmap for turning your vision and strategy for your business into a crystal-clear view of what success should look like financially.

D. All of the above.

Question 3Assume that you make an investment of $100,000 in 2015 that has a value of $122,504 3 years later in 2018. What is the compound annual growth rate (CAGR) of your investment?


A. 22.5%

B. 7%

C. 5.6%

D. 1.8%

Question 4A business uses week-by-week sales data to predict sales for the coming week using moving averages. This is an example of:


A. Moving average times series forecasting method

B. Experiential smoothing

C. Delphi method

D. Market research



Week 10 Knowledge Check

Question 1Rachel is the Division Controller for an Environmental Consulting firm that performs environmental services for a number of government agencies. All regional groups roll up their budget to her and she is responsible for finalizing it, disbursing to everyone for review, and providing an analysis of variances once the actual results are available. Last month, while reviewing the actual results, she noticed that the revenue planned for the engineering group was $350K less than what they had planned for. As a result, it caused the entire Division to significantly miss their net income profit goal for the month as well. Linda has to prepare her analysis of results for their next executive management meeting and wants to ensure that she adequately explains why they did not meet the planned profit goals. What should she do:

Question 2Which of the following are goals of the Budgeting Process:

Question 3Differences that exist between the planned budget and actual results are referred to as what?

Question 4Budgets are estimates and educated guesses about the future.

Question 5Archer Electronics is preparing its annual budget, and your department is working on the cash flow budget. Here is selected information you have:

Description          June     July       August

Sales     $348,000             $438,000             $450,000

The company makes 10% of its sales for cash and 90% on credit. Of the credit sales, 20% are collected in the month after the sale and 80% are collected two months after. The cash receipts for August are:

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