The Platter Valley factory of Bybee Industries manufactures field boots. The cost of each boot includes direct materials, direct labor, and manufacturing overhead. The firm traces all direct costs to products, and it assigns overhead based on direct labor hours. The company budgeted $15,000 variable overhead and 2,500 direct labor hours to manufacture 5,000 pairs of boots in March. The factory used 2,700 direct labor hours in March to manufacture 4,800 pairs of boots and spent $15,600 on variable overhead during the month. For March the Platter Valley factory of Bybee Industries budgeted $90,000 of fixed overhead. Its practical capacity is 2,500 direct labor hours per month (to manufacture 5,000 pairs of boots). The actual fixed overhead incurred for the month was $92,000.

a. Provide appropriate journal entries to record the variable overhead spending and efficiency variances.

b. The Platter Valley factory of Bybee Industries uses a three-variance analysis of the total factory overhead variance.

Required: 1. Compute the total overhead spending variance, the efficiency variance, and the fixed overhead production volume variance.

2.Determine the spending variances (both variable and fixed), the efficiency variance, and the fixed overhead production volume variance.

Suppose that GE is trying to prevent Maytag from entering the market for high efficiency clothes dryers. Even though high efficiency dryers are more costly to produce, they are also more profitable as they command sufficiently higher prices from consumers. The following payoffs table shows the annual profits for GE and Maytag for the advertising spending and entry decisions that they are facing.

Based on this information, can GE successfully prevent Maytag from entering this market by increasing its advertising levels? What is the equilibrium outcome in this game?

Suppose that an analyst at GE is convinced that just a little bit more advertising by GE, say another $2m, would be sufficient to deter enough customers from buying Maytag, thus, yield less than $0 profits for Maytag in the event it enters. Suppose that spending an extra $2m on advertising by GE will reduce its expected profits by $1.5 m, regardless of whether Maytag enters or stays out. Would this additional spending on advertising achieve the effect of deterring Maytag from entering? Should GE pursue this option?

Variance

Part A

The following standard costs per unit have been established by John, Inc.:

• Material (3 kilograms at $2 per kilogram)    $ 6.00
• Direct labor (2 hours at $12 per hour) $ 24.00

During the month, John produced 1,100 units, which was 100 more units than planned.

They used 3,400 kilograms and 2,050 hours to do so.

Total actual materials spending was $6,460, while total actual labor spending was $27,675.

Required

Choose EITHER materials OR labor, and compute the following variances:

• Spending
• Efficiency
• Activity

Be sure to denote which you chose (materials or labor) and label each variance as favorable or unfavorable.

Part B

Meghan Company sells two products – Deluxe and Ultra.

The following information was gathered about the two products:

Required

Calculate the three main revenue variances for the Meghan product.

Be sure to label the variances by name, as well as “favorable” or “unfavorable.”

If there is insufficient information to calculate any of the variances, please denote that clearly.

Each question has 6-7 parts, depending on the work. Please answer every part. Thank you.

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What is the formula for the Average Propensity to Consume (APC)?

Group of answer choices

consumption divided by income

the change in consumption divided by a change in income

income divided by consumption

the change in income to a change in consumption

None of the above

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How does the size of the Marginal Propensity to Consume (MPC) affect the size of the multiplier ?

Group of answer choices

There is NO RELATIONSHIP between the two.

MPC * the Multiplier = 1

The multiplier becomes SMALLER as MPC becomes larger.

MPC + the Multiplier = 1

The multiplier becomes LARGER as MPC becomes larger.

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How does the size of the Marginal Propensity to Save (MPS) affect the size of the multiplier ?

Group of answer choices

There is NO RELATIONSHIP between the two.

The multiplier becomes LARGER as MPS becomes larger.

The multiplier becomes SMALLER as MPS becomes larger.

MPS + the Multiplier = 1

MPS * the Multiplier = 1

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What is the formula for the multiplier associated with investment ?

Group of answer choices

1/(1+MPC)

1/ (1+MPS)

None of the above

1 / MPC

1 / MPS

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What is the relationship between the tax multiplier and the government spending multiplier?

Group of answer choices

There is NO relationship between the two multipliers.

In absolute terms, both are EQUAL.

In absolute terms, the government spending multiplier is LARGER.

In absolute terms, the tax multiplier is LARGER.

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According to Keynes, what determines the autonomous level (i.e. “fixed level”) of business Investment?

Group of answer choices

“shadow prices”

“animal spirits”

“wildcat strikes”

“monkey business”

“irrational exuberance”

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“Crowding out” refers to …

Group of answer choices

an increase in private investment driving out consumption.

an increase in consumption driving out private investment.

an increase in government spending driving out private investment.

an increase in private investment driving out government spending.

an increase in government spending driving out consumption.

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Suppose Investment increases by $200, if MPC = .6, what will be the change in equilibrium income?

Group of answer choices

+ $300

+$1,200

+ $500

+ $120

+ $200

-

Suppose Taxes increase by $300, if MPC = .75, what will be the change in equilibrium income?

Group of answer choices

+ $300

- $225

- $300

+ $225

- $900

5. Fiscal policy, the money market, and aggregate demand Consider a hypothetical economy in which households spend $0.50 of each additional dollar they earn and save the remaining $0.50. The following graph shows the economy's initial aggregate demand curve ( AD1 ). Suppose the government increases its purchases by $2.5 billion. Use the green line (triangle symbol) on the following graph to show the aggregate demand curve ( AD2 ) after the multiplier effect takes place. Hint: Be sure the new aggregate demand curve ( AD2 ) is parallel to AD1 . You can see the slope of AD1 by selecting it on the following graph. AD 2 AD 3 100 102 104 106 108 110 112 114 116 116 114 112 110 108 106 104 102 100 PRICE LEVEL OUTPUT (Billions of dollars) AD 1 The following graph shows the money market in equilibrium at an interest rate of 3% and a quantity of money equal to $15 billion. Show the impact of the increase in government purchases on the interest rate by shifting one or both of the curves on the following graph. Money Demand Money Supply 0 5 10 15 20 25 30 6 5 4 3 2 1 0 INTEREST RATE MONEY (Billions of dollars) Money Demand Money Supply Suppose that for each one-percentage-point increase in the interest rate, the level of investment spending declines by $0.5 billion. The change in the interest rate (according to the change you made to the money market in the previous scenario) therefore causes the level of investment spending to by . After the multiplier effect is accounted for, the change in investment spending will cause the quantity of output demanded to by at each price level. The impact of an increase in government purchases on the interest rate and the level of investment spending is known as the effect. Use the purple line (diamond symbol) on the graph at the beginning of this problem to show the aggregate demand curve ( AD3 ) after accounting for the impact of the increase in government purchases on the interest rate and the level of investment spending. Hint: Be sure your final aggregate demand curve ( AD3 ) is parallel to AD1 and AD2 . You can see the slopes of AD1 and AD2 by selecting them on the graph.

In a scene from a television show, a van rolls down an incline and off a vertical cliff, falling into a valley below. The van starts from rest and rolls down the incline, which makes an angle of 19.0° below the horizontal, with a constant acceleration of 3.06 m/s2. After rolling down the incline a distance of 55.0 m, it reaches the edge of the cliff, which is 40.0 m above ground level.

(a) How much time (in s) does it take the van to fall from the edge of the cliff to the landing point?

_______s

b) At the point where the van crashes into the ground, how far is it horizontally from the edge of the cliff (in m)?

____________m

3. Briefly discuss the performance of the following industries along the economic cycle: (a) Housing construction (b) Metal

4. Briefly describe the behavior of the following economic variables along the economic cycle: (a) New jobless claims (b) Consumer sentiment

5. Are the following economic variables rising or falling around the economic cycle turning points? (a) Inventory level (b) Short-term interest rate

6. Rank the performance of machine producers, beverage producers, and restaurants in each of the following situations:

(a) Production growth is accelerating and capacity utilization has risen to high level during early stage of economic expansion.

(b) The economy has just started a recession.

Assume an observer sent a beam of photons close to an event horizon, say at some distance x (a distance far enough to avoid the photons falling in.) This light would still be observable, albeit red shifted and with it's path curved appropriately. Now assume the black hole absorbs enough mass to expand it's event horizon beyond the distance x. This stream of photons would stop. Does the observer not have information about a process that occurred exactly at the event horizon, that is it's expansion? Isn't this a region that one should not be able to get any information about due to the fact that nothing could contact the event horizon and return to the observer?