Required information
Use the following information for the Exercises below.
[The following information applies to the questions
displayed below.]
Megamart, a retailer of consumer goods, provides the following
information on two of its departments (each considered an
investment center).
| Investment Center | Sales | Income | Average Invested Assets |
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| Electronics | $ | 40,250,000 | $ | 3,059,000 | $ | 16,100,000 | |||
| Sporting goods | 21,780,000 | 2,178,000 | 12,100,000 | ||||||
Exercise 22-10 Computing return on investment and residual income; investing decision LO A1
1. Compute return on investment for each
department. Using return on investment, which department is most
efficient at using assets to generate returns for the
company?
2. Assume a target income level of 10% of average
invested assets. Compute residual income for each department. Which
department generated the most residual income for the
company?
3. Assume the Electronics department is presented
with a new investment opportunity that will yield a 14% return on
investment. Should the new investment opportunity be accepted?
In: Finance
Discuss the effect of monetary policy on investment spending.
In: Economics
An increase in government spending initially and primarily shifts
aggregate demand right
aggregate demand left
aggregate supply right
neither aggregate demand nor aggregate supply
In: Economics
An increase in government spending initially and primarily shifts
a. aggregate demand to the right.
b. aggregate demand to the left.
c. aggregate supply to the right.
d. neither aggregate demand nor aggregate supply in either direction.
In: Economics
An increase in government spending shifts aggregate demand
a. to the right. The larger the multiplier is, the less it shifts
b. to the left. The larger the multiplier is, the farther it shifts.
c. to the left. The larger the multiplier is, the less it shifts.
d. to the right. The larger the multiplier is, the farther it shifts.
In: Economics
how consumer spending impacts economic growth
In: Economics
Periodic Inventory System
If this business uses First in First out inventory system instead of Last in Last out then what will the net income be for the month described below? Will it be Higher, lower, the same or unknown? Explain your reasoning.
Cost of Goods Available for Sale:
| Date | # of units | $ per unit | |
| 1/1 | Beginning Inventory | 25 | $50 |
| 1/4 | Purchase of units | 15 | $45 |
| 1/20 | Purchase of units | 20 | $42 |
| 1/30 | Purchase of units | 10 | $37 |
Retail Sale of Goods:
| Date | # of units | $ per unit | |
| 1/18 | Sold units | 20 | $62 |
| 1/28 | Sold units | 25 | $62 |
In: Accounting
For this discussion activity, you will get insight into the federal budgeting process and how key allocation decisions are made. As part of that effort you will work through the National Budget Simulation in an effort to achieve a budget deficit of $1400B dollars.
Scenario: The President of the United States has been elected on the promise of fiscal responsibility as a key mandate of the electorate. By law he cannot reduce the net interest paid on the debt. The President's budget is projected to leave the country with a $1400B deficit.
The United States is subject to global security concerns tied to recent terrorist attacks both domestically and internationally. At the same time, a lingering recession and financial markets rescue package reduces the government's tax revenues and forces the government to increase its spending on unemployment benefits, welfare, housing assistance, food stamps, and other need-based programs. Because of the increased spending and reduced revenues, the nation falls into a projected deficit of nearly $X in 2020 (This is the first piece of the information you need to find).
The President is committed to keeping his campaign promises to avoid future crisis over the US's financial standing. He must raise taxes, cut spending, or a combination of both to stay within his new guideline of a deficit below $1400B. The President turns to you, his trusted economic advisor, for help. (Note: While some events in this scenario reflect actual events, others are hypothetical for the purposes of this exercise. Budget figures in the simulation are actual White House figures of 2012, including spending and revenues of 2012.)
Given the information you watch and read in the preceding Week 7 activities, use that background to answer the above questions for discussion. Since the simulation is using 2012 numbers, start off with actual numbers just to inject a sense of reality into this discussion. Research this information from a reliable source and begin your analysis with what you found. Finally, analyze the effect your choices will have on the economy.In: Economics
Problem 9-18 (Algo) Activity and Spending Variances [LO9-1, LO9-2, LO9-3]
You have just been hired by FAB Corporation, the manufacturer of a revolutionary new garage door opening device. The president has asked that you review the company’s costing system and “do what you can to help us get better control of our manufacturing overhead costs.” You find that the company has never used a flexible budget, and you suggest that preparing such a budget would be an excellent first step in overhead planning and control.
After much effort and analysis, you determined the following cost formulas and gathered the following actual cost data for March:
| Cost Formula | Actual Cost in March | ||
| Utilities | $16,300 + $0.11 per machine-hour | $ | 20,740 |
| Maintenance | $38,400 + $1.20 per machine-hour | $ | 61,000 |
| Supplies | $0.40 per machine-hour | $ | 9,400 |
| Indirect labor | $94,100 + $1.70 per machine-hour | $ | 135,800 |
| Depreciation | $68,300 | $ | 70,000 |
During March, the company worked 22,000 machine-hours and produced 16,000 units. The company had originally planned to work 24,000 machine-hours during March.
Required:
1. Calculate the activity variances for March.
Calculate the activity variances for March. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)
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2. Calculate the spending variances for March.
Calculate the spending variances for March. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)
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In: Accounting
E6-17 (LO 5) Siren Company builds custom fishing lures for sporting goods stores. In its first year of operations, 2020, the company incurred the following costs.
| Variable Costs per Unit | |
| Direct materials | $7.50 |
| Direct labor | $3.45 |
| Variable manufacturing overhead | $5.80 |
| Variable selling and administrative expenses | $3.90 |
| Fixed Costs per Year | |
| Fixed manufacturing overhead | $225,000 |
| Fixed selling and administrative expenses | $210,100 |
Siren Company sells the fishing lures for $25. During 2020, the company sold 80,000 lures and produced 90,000 lures.
Instructions:
a. Assuming the company uses variable costing, calculate Siren's manufacturing cost per unit for 2020.
b. Prepare a variable costing income statement for 2020.
c. Assuming the company uses absorption costing, calculate Siren's manufacturing cost per unit for 2020.
d. Prepare an absorption costing income statement for 2020.
In: Accounting