The Production Department of Hruska Corporation has submitted the following forecast of units to be produced by quarter for the upcoming fiscal year: 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Units to be produced 11,300 10,300 12,300 13,300 Each unit requires 0.25 direct labor-hours and direct laborers are paid $13.00 per hour. In addition, the variable manufacturing overhead rate is $1.60 per direct labor-hour. The fixed manufacturing overhead is $93,000 per quarter. The only noncash element of manufacturing overhead is depreciation, which is $33,000 per quarter.

Required: 1. Calculate the company’s total estimated direct labor cost for each quarter of the upcoming fiscal year and for the year as a whole. 2&3. Calculate the company’s total estimated manufacturing overhead cost and the cash disbursements for manufacturing overhead for each quarter of the upcoming fiscal year and for the year as a whole.

The Production Department of Hruska Corporation has submitted the following forecast of units to be produced by quarter for the upcoming fiscal year:

Each unit requires 0.25 direct labor-hours and direct laborers are paid $14.00 per hour.

In addition, the variable manufacturing overhead rate is $1.60 per direct labor-hour. The fixed manufacturing overhead is $95,000 per quarter. The only noncash element of manufacturing overhead is depreciation, which is $35,000 per quarter.

Required:

1. Calculate the company’s total estimated direct labor cost for each quarter of the upcoming fiscal year and for the year as a whole.

2&3. Calculate the company’s total estimated manufacturing overhead cost and the cash disbursements for manufacturing overhead for each quarter of the upcoming fiscal year and for the year as a whole.

The Production Department of Hruska Corporation has submitted the following forecast of units to be produced by quarter for the upcoming fiscal year:

Each unit requires 0.25 direct labor-hours and direct laborers are paid $13.00 per hour.

In addition, the variable manufacturing overhead rate is $1.90 per direct labor-hour. The fixed manufacturing overhead is $88,000 per quarter. The only noncash element of manufacturing overhead is depreciation, which is $28,000 per quarter.

Required:

1. Calculate the company’s total estimated direct labor cost for each quarter of the upcoming fiscal year and for the year as a whole.

2&3. Calculate the company’s total estimated manufacturing overhead cost and the cash disbursements for manufacturing overhead for each quarter of the upcoming fiscal year and for the year as a whole.

1. If actual GDP is below potential GDP, then the unemployment rate is _____________ the natural rate.  A) below     B) above     C) right at     D) cannot be determined without inflation rate

2. Fiscal policy affects the economy through: A) Taxes     B) Government Spending     C) Interest Rates     D) Taxes and Government Spending

3. The Federal Reserve Bank’s decisions on monetary policy are made by the:

1. Board of Governors  B) FOMC     C) Reserve Banks     D) Federal Reserve Bank of New York

4. One of the FED’s responses to the COVID crisis has been to:

1. Lower the federal funds rate to zero     B) sell US Treasuries     C) Authorize over $3t in additional federal government spending     D) All of the above are correct

5. If C=450+0.9Y, then the marginal propensity to consume is:

1. 0.1     B) 0.9     C) 10     D) Unknown, because we do not know GDP

6. The most important function of money is that it serves as a:

1. Store of value     B) standard of value     C) Medium of Exchange     D) Measure of Inflation

7. If there is more spending in the Income-Expenditures Model, the 45-degree line will:

       A) shift up     B) shift down     C) never shift     D) be parallel to the spending line

8. The following is true: A) NX = X + M     B) Y = SP     C) C + I = G + NX     D) GDP = Y

9. The natural rate of unemployment is when it is just:

1. 0     B) low     C) cyclical unemployment     D) frictional and structural unemployment

10. Keynes publishes ________________ in _________________.

1. The Wealth of Nations, 1776     B) Billy, My Goat and My Friend, 1875     C) Poverty and Inequality, 1907     D) The General Theory of Employment, Interest, and Money, 1936

11. The goals of the FED are:

1. Strong stock market and unemployment at the natural rate     B) zero inflation and 4% GDP growth     C) Sustainable economic growth and price and financial stability     D) inflation greater than 3% and unemployment at the natural rate

12. There are __________Reserve Banks in the Federal Reserve System.

1. 7          B) 10          C) 12          D) 14

13. Fiscal policy has _____________ inside lags.  A) long     B) short     C) no     D) 30 day

14. The Chair of the FED today is: A) Hans Cole    B) Janet Yellen    C) Jerome Powell      D) JR Ewing

15. The following is false: A) M2 is larger than M1   B)  Currency is not the only financial asset considered money  C) The FED does not create money   D) All of these are true

16. Investment spending depends mainly on: A) interest rates and return on invested funds

2. Income and Savings     C) foreign exchange rates and tastes and preferences     D) imports and unemployment

17. Keynes believed that: A) Wages could be sticky    B) Economies gets stuck in undesirable equilibria     C) Government can make up for a shortfall in consumer and investment spending

3. All the above

18. Expansionary Fiscal policy means: A) Increasing government spending and raising taxes     B) lowering taxes and lowering government spending     C) lowering interest rates   D) none of the above are correct

19. The US will remain in recession until: A) spending substantially increases B) savings substantially increases  C) the stock market gains more than 10% in value  D) we balance our budget deficit

20. The Sasquatch, Bigfoot, and the Yeron are all possibly descendants of:

               A)  Gigantopithecus     B)  Plesiosaur     C) Pterodactyl     D) Gigliosaurus

Suppose MPC is 0.3, use the spending multiplier to fill in the values for an autonomous government spending of $700.

What are some of the problems with the spending multiplier?

(10 Points)

[You must review the literature about the multiplier]

White Corporation’s budget calls for the following sales for next year:

Each unit of the product requires 3 pounds of direct materials. The company’s policy is to begin each quarter with an inventory of product equal to 5% of that quarter’s estimated sales requirements and an inventory of direct materials equal to 20% of that quarter’s estimated direct materials requirements for production.

Required:

1. Determine the production budget for the second quarter.

2. Determine the materials purchases budget for the second quarter.

White Corporation’s budget calls for the following sales for next year: Quarter 1 95,000 units Quarter 3 67,000 units Quarter 2 81,000 units Quarter 4 98,000 units Each unit of the product requires 5 pounds of direct materials. The company’s policy is to begin each quarter with an inventory of product equal to 5% of that quarter’s estimated sales requirements and an inventory of direct materials equal to 20% of that quarter’s estimated direct materials requirements for production. Required: 1. Determine the production budget for the second quarter. 2. Determine the materials purchases budget for the second quarter.

Gladstone Company tracks the number of units purchased and sold throughout each accounting period but applies its inventory costing method at the end of each period, as if it uses a periodic inventory system. Assume its accounting records provided the following information at the end of the annual accounting period, December 31.

Assuming that for Specific identification method (item 1d) the March 14 sale was selected two-fifths from the beginning inventory and three-fifths from the purchase of January 30. Assume that the sale of August 31 was selected from the remainder of the beginning inventory, with the balance from the purchase of May 1.

Required:

1. Compute the amount of goods available for sale, ending inventory, and cost of goods sold at December 31 under each of the following inventory costing methods: (Round intermediate calculations to 2 decimal places and final answers to the nearest whole dollar amount.)

1. 2-a. Of the four methods, which will result in the highest gross profit?

• Last-in, first-out

• Weighted average cost

• First-in, first-out

• Specific identification

1. 2-b. Of the four methods, which will result in the lowest income taxes?

• Last-in, first-out

• Weighted average cost

• First-in, first-out

• Specific identification

Abbott Inc.  

The Production Department of Hruska Corporation has submitted the following forecast of units to be produced by quarter for the upcoming fiscal year:

Each unit requires 0.30 direct labor-hours and direct laborers are paid $12.50 per hour.

In addition, the variable manufacturing overhead rate is $2.05 per direct labor-hour. The fixed manufacturing overhead is $90,000 per quarter. The only noncash element of manufacturing overhead is depreciation, which is $30,000 per quarter.

Required:

1. Calculate the company’s total estimated direct labor cost for each quarter of the the upcoming fiscal year and for the year as a whole. Assume that the direct labor workforce is adjusted each quarter to match the number of hours required to produce the estimated number of units produced.

2&3. Calculate the company’s total estimated manufacturing overhead cost and the cash disbursements for manufacturing overhead for each quarter of the the upcoming fiscal year and for the year as a whole.