Lind, Marchal,& Wathen text Essay

Lind, Marchal,& Wathen text:

18. Refer to the Wage data, which reports information on annual wages for a sample of 100 workers. Also included are variables relating to industry, years of education, and gender for each worker.

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a. Which of the 12 variables are qualitative and which are quantitative?

b. Determine the level of measurement for each variable.

Variable
Qualitative/Quantitative
Level of Measurement
Annual wage in dollars
Quantitative
Ratio
Industry
Qualitative
Nominal
Occupation
Qualitative
Nominal
Years of education
Quantitative
Ratio
Southern resident
Qualitative
Nominal
Non-white
Qualitative
Nominal
Hispanic
Qualitative
Nominal
Female
Qualitative
Nominal
Years of work Experience
Quantitative
Ratio
Married
Qualitative
Nominal
Age in years
Quantitative
Ratio
Union member
Qualitative
Nominal

Horngren text

3-41 High-Low Method

Manchester Foundry produced 45,000 tons of steel in March at a cost of £1,150,000. In April, the foundry produced 35,000 tons at a cost of £950,000. Using only these two data points, determine the cost function for Manchester.

Variable cost per tons of steel =

= £20 per tons of steel

Fixed cost per month = total cost less variable cost

At 35,000 tons:  per tons of steel

At 45,000 tons:  per tons of steel

Therefore, the cost function foe Manchester is

Y (total cost) = £250,000 per month + (£20  number of tons of steel)

Marshall, McManus,& Viele text

The net sales and total assets of the Gateway, Inc show a consistent increasing trend from year 1995 to 1999 (figure 1). The net income of the Gateway, Inc show an increasing trend from year 1995 to 1999 (figure 2), however, the net income has sudden fall in year 1997. Overall, the trends expressed for net sales, total assets, and net income for Gateway, Inc is consistent with each other.

The long-term obligation, net current maturities shows a consistent decreasing trend from year 1995 to 1999 (figure 3). This can be justified as the net sales, total assets, and net income for Gateway, Inc has increasing trend.

The net income trend would be most meaningful to a potential investor in common stock of Gateway, Inc because it can be used to calculate return on investment that is the most important measures of profitability (figure 4). The long-term obligation, net current maturities trend would be least meaningful to a potential investor in common stock of Gateway, Inc.

The net sales, total assets, and net income for Gateway, Inc is given, which are sufficient for making an investment in Gateway, Inc. However, if we have access to working capital (owners’ equity) data than trend for return on investment (ROI), return on equity (ROE) and margin can be easily compared for Gateway, Inc for making an investment in Gateway, Inc.

Figure 1: Net sales and total assets (in millions), 1995-1999

Figure 2: Net Income (in ‘000), 1995-1999

Figure 3: Long-term obligation, net current maturities, 1995-1999

Figure 4: Return on investment (ROI) and net earnings (margin), 1995-1999