Questions
Your local Congressman calls you up excitedly in the middle of the night. Somebody has told...

Your local Congressman calls you up excitedly in the middle of the night. Somebody has told him about a model that predicted that increases in government purchases would have a magnified “multiplier” impact on the economy. If the model is correct, then he would be able to spend money on his favorite projects for years to come. However, the Congressman is concerned because he has to operate under a Balanced Budget Amendment, which requires him to keep taxes equal to government purchases, i.e. he has to increase taxes whenever he increases government purchases in order to keep the budget balanced. A model of the economic situation that the Congressman is facing is given by

Y=C+I+G+NX

C=C(bar)+b(Y-T)

G=G(bar)

I=I(bar)

T=G

NX=NX(bar)

a) Solve this simple model and obtain an expression for the equilibrium value of Y in this economy.

b) Derive an equation for the spending multiplier associated with government purchases in this economy. How does it compare to the spending multiplier of 1/(1−b) we derived for a simple economy with an exogenous tax system? Provide some intuition for your answer.

c) Derive an equation for the spending multiplier associated with exogenous consumption (or investment or net exports) in this economy. How does it compare to the multiplier you derived in b)? Provide some intuition for your answer.

d) Based on your answers to b) and/or c) should the Congressman be discouraged? Explain (briefly).

In: Economics

… has the following standard cost sheet for its main product: Direct Materials 2 feet at...

… has the following standard cost sheet for its main product:

Direct Materials 2 feet at $5 per foot $10
Direct Labor 0.5 hours at $10 per hour $5
Variable overhead 0.5 hours at $2 per hour $1
Fixed overhead 0.5 hours at $4 per hour $2
Standard overhead 18

The fixed and variable overhead rates were based on expected activity of 3,200 hours.

During the year, the following actual results were recorded:

Actual results for year:
Production 6,000 units
Direct materials purchases    11,750 feet purchased - 11,000 feet used 61,100
direct labor                              2,900 hours 29,580
variable overhead 6,000
fixed overhead        10, 500

REQUIRED:

  1. Assuming that the company uses a 4-way overhead analysis, compute the following variances for Minnesota Manufacturing
  2. Variable overhead spending and efficiency variances
  3. Fixed overhead spending (budget) and volume variances
  4. Show the journal entries needed to record the application of overhead, actual overhead, overhead variances and disposition of overhead variances under standard costing
  5. Assuming that the company uses a 3-way overhead analysis, compute the spending, efficiency and volume variances.
  6. Assuming that the company uses a 2-way overhead analysis, compute the budget variance and volume variance.
  7. Compute the direct materials price and usage variances, and the direct labor rate and efficiency variances.
  8. Record all related journal entries for above.
  9. Compute all direct-cost variances and record journal entries for Standard Costing.

In: Accounting

Expansionary fiscal policy falls short of its goal. Some economists claim it is due to indirect...

Expansionary fiscal policy falls short of its goal. Some economists claim it is due to indirect crowding out. What evidence is consistent with this claim?

Select one:

a. A reduction in consumer spending

b. The interest rate increased

c. Saving increased

d. The price level increased

The tendency for expansionary fiscal policy to cause a reduction in planned investment spending by the private sector is called

Select one:

a. the indirect effect.

b. the interest rate effect.

c. the crowding-out effect.

d. the Laffer effect.

Multiplier effects take time to work through the economy, which is known as the

Select one:

a. action time lag.

b. effect time lag.

c. recognition time lag.

d. Ricardian-equivalence time lag.

An advantage of automatic stabilizers over discretionary fiscal policy is that

Select one:

a. automatic stabilizers are not subject to all the same time lags that discretionary fiscal policy is.

b. automatic stabilizers can be easily fine-tuned to move the economy to full employment.

c. only the Prime Minister is involved in implementing automatic stabilizers instead of both the Prime Minister and Parliament.

d. the Ricardian equivalence theorem applies more readily to automatic stabilizers than to discretionary fiscal policy.

Automatic stabilizers are

Select one:

a. provisions that cause changes in government spending and taxes that do not take the action of Parliament.

b. the policies set by certain committees in Parliament.

c. the tools used by the Prime Minister's Council of Economic Advisers.

d. provisions that cause the aggregate supply curve to be upward sloping.

In: Economics

Chapter 2 – Marketing Ethics Marketing to children has always been controversial. Indeed, in the 1970’s,...

Chapter 2 – Marketing Ethics Marketing to children has always been controversial. Indeed, in the 1970’s, the FTC considered prohibiting all advertising to children. The federal government once again is setting its sights on marketing aimed at children. With the US child obesity rate and predicated to exceed 20% in just a few years, regulators are pressuring marketers in general, and food marketers in particular, to curb their marketing practices to children. In 2008, the FTC delivered an analysis to Congress of 44 companies’ $1.6 billion food and beverage marketing activities targeting children. A provision in the 2009 omnibus spending bill signed into law by President Obama created the Interagency Working Group on Food Marketing to Children. This group will present recommendations to Congress in 2010 regarding marketing to children and aged 17 and younger. With children and teens spending billions of their own dollars and influencing much more of their parents spending, this is an important market segment to marketers.

1. Studies report that children view more than 20 food ads each day, of which over 90% promote high fat, high sugar products. The marketing concept focuses on satisfying consumer’ needs and wants, but are marketers crossing the line when they cater to younger consumers’ wants for products that may counter parental wishes or that may be unhealthy?

2. What actions are marketers taking to market their products to this market segment more ethically? Discuss industry initiatives that help marketers market to children more responsibly.

In: Economics

Blossom Company bottles and distributes B-Lite, a diet soft drink. The beverage is sold for 50...

Blossom Company bottles and distributes B-Lite, a diet soft drink. The beverage is sold for 50 cents per 16-ounce bottle to retailers, who charge customers 75 cents per bottle. For the year 2020, management estimates the following revenues and costs.

Sales $1,950,000 Selling expenses—variable $67,000
Direct materials 550,000 Selling expenses—fixed 61,000
Direct labor 350,000 Administrative expenses—variable 28,000
Manufacturing overhead—variable 370,000 Administrative expenses—fixed 59,250
Manufacturing overhead—fixed 260,000

Correct answer iconYour answer is correct.

Prepare a CVP income statement for 2020 based on management’s estimates.

BLOSSOM COMPANY
CVP Income Statement (Estimated)
For the Year Ending December 31, 2020
select an income statement item                                                                      Administrative ExpensesContribution MarginCost of Goods SoldFixed ExpensesNet Income/(Loss)SalesSelling ExpensesTotal Fixed ExpensesTotal Variable ExpensesVariable ExpensesGross Profit

$enter a dollar amount
select an opening name for section one                                                                      Administrative ExpensesContribution MarginCost of Goods SoldFixed ExpensesNet Income/(Loss)SalesSelling ExpensesTotal Fixed ExpensesTotal Variable ExpensesVariable ExpensesGross Profit
select an income statement item                                                                      Administrative ExpensesContribution MarginCost of Goods SoldFixed ExpensesNet Income/(Loss)SalesSelling ExpensesTotal Fixed ExpensesTotal Variable ExpensesVariable ExpensesGross Profit

$enter a dollar amount
select an income statement item                                                                      Administrative ExpensesContribution MarginCost of Goods SoldFixed ExpensesNet Income/(Loss)SalesSelling ExpensesTotal Fixed ExpensesTotal Variable ExpensesVariable ExpensesGross Profit

enter a dollar amount
select an income statement item                                                                      Administrative ExpensesContribution MarginCost of Goods SoldFixed ExpensesNet Income/(Loss)SalesSelling ExpensesTotal Fixed ExpensesTotal Variable ExpensesVariable ExpensesGross Profit

enter a dollar amount
select a closing name for section one                                                                      Administrative ExpensesContribution MarginCost of Goods SoldFixed ExpensesNet Income/(Loss)SalesSelling ExpensesTotal Fixed ExpensesTotal Variable ExpensesVariable ExpensesGross Profit

enter a total amount for section one
select a summarirzing line for the first part                                                                      Administrative ExpensesContribution MarginCost of Goods SoldFixed ExpensesNet Income/(Loss)SalesSelling ExpensesTotal Fixed ExpensesTotal Variable ExpensesVariable ExpensesGross Profit

enter a total amount for the first part
select an opening name for section two                                                                      Administrative ExpensesContribution MarginCost of Goods SoldFixed ExpensesNet Income/(Loss)SalesSelling ExpensesTotal Fixed ExpensesTotal Variable ExpensesVariable ExpensesGross Profit
select an income statement item                                                                      Administrative ExpensesContribution MarginCost of Goods SoldFixed ExpensesNet Income/(Loss)SalesSelling ExpensesTotal Fixed ExpensesTotal Variable ExpensesVariable ExpensesGross Profit

enter a dollar amount
select an income statement item                                                                      Administrative ExpensesContribution MarginCost of Goods SoldFixed ExpensesNet Income/(Loss)SalesSelling ExpensesTotal Fixed ExpensesTotal Variable ExpensesVariable ExpensesGross Profit

enter a dollar amount
select an income statement item                                                                      Administrative ExpensesContribution MarginCost of Goods SoldFixed ExpensesNet Income/(Loss)SalesSelling ExpensesTotal Fixed ExpensesTotal Variable ExpensesVariable ExpensesGross Profit

enter a dollar amount
select a closing name for section two                                                                      Administrative ExpensesContribution MarginCost of Goods SoldFixed ExpensesNet Income/(Loss)SalesSelling ExpensesTotal Fixed ExpensesTotal Variable ExpensesVariable ExpensesGross Profit

enter a total amount for section two
select a closing name for this statement                                                                      Administrative ExpensesContribution MarginCost of Goods SoldFixed ExpensesNet Income/(Loss)SalesSelling ExpensesTotal Fixed ExpensesTotal Variable ExpensesVariable ExpensesGross Profit

$enter a total net income or loss amount

eTextbook and Media

  

  

New attempt is in progress. Some of the new entries may impact the last attempt grading.Your answer is incorrect.

Calculate variable cost per bottle. (Round variable cost per bottle to 3 decimal places, e.g. 0.251.)

Variable cost per bottle

$enter Variable cost per bottle in dollars rounded to 3 decimal places

eTextbook and Media  

  

New attempt is in progress. Some of the new entries may impact the last attempt grading.Your answer is incorrect.

Compute the break-even point in (1) units and (2) dollars. (Round answers to 0 decimal places, e.g. 1,225.)

(1) Compute the break-even point

enter the break-even point in units

 units
(2) Compute the break-even point

$enter the break-even point in dollars

eTextbook and Media

  

  

New attempt is in progress. Some of the new entries may impact the last attempt grading.Your answer is incorrect.

Compute the contribution margin ratio and the margin of safety ratio. (Round variable cost per bottle to 3 decimal places, e.g. 0.25 and final answers to 0 decimal places, e.g. 25%.)

Contribution margin ratio

enter the contribution margin ratio in percentages rounded to 0 decimal places

 %
Margin of safety ratio

enter the Margin of safety ratio in percentages rounded to 0 decimal places

 %

  

  

New attempt is in progress. Some of the new entries may impact the last attempt grading.Your answer is incorrect.

Determine the sales dollars required to earn net income of $210,000. (Round answer to 0 decimal places, e.g. 1,225.)

Required sales dollars

$enter the Required sales dollars

In: Accounting

Jorge Company bottles and distributes B-Lite, a diet soft drink. The beverage is sold for 50...

Jorge Company bottles and distributes B-Lite, a diet soft drink. The beverage is sold for 50 cents per 16-ounce bottle to retailers, who charge customers 75 cents per bottle. For the year 2017, management estimates the following revenues and costs.

Sales $1,840,000 Selling expenses—variable $70,000
Direct materials 440,000 Selling expenses—fixed 55,000
Direct labor 300,000 Administrative expenses—variable 26,000
Manufacturing overhead—variable 360,000 Administrative expenses—fixed 46,000
Manufacturing overhead—fixed 511,500

Partially correct answer iconYour answer is partially correct.

Prepare a CVP income statement for 2017 based on management’s estimates.

JORGE COMPANY
CVP Income Statement (Estimated)
choose the accounting period                                                                      For the Year Ending December 31, 2017December 31, 2017For the Month Ended December 31, 2017
select an income statement item                                                                      Administrative ExpensesContribution MarginCost of Goods SoldFixed ExpensesNet Income/(Loss)SalesSelling ExpensesTotal Fixed ExpensesTotal Variable ExpensesVariable ExpensesGross Profit

$enter a dollar amount
select an opening name for section one                                                                      Administrative ExpensesContribution MarginCost of Goods SoldFixed ExpensesNet Income/(Loss)SalesSelling ExpensesTotal Fixed ExpensesTotal Variable ExpensesVariable ExpensesGross Profit
select an income statement item                                                                      Administrative ExpensesContribution MarginCost of Goods SoldFixed ExpensesNet Income/(Loss)SalesSelling ExpensesTotal Fixed ExpensesTotal Variable ExpensesVariable ExpensesGross Profit

$enter a dollar amount
select an income statement item                                                                      Administrative ExpensesContribution MarginCost of Goods SoldFixed ExpensesNet Income/(Loss)SalesSelling ExpensesTotal Fixed ExpensesTotal Variable ExpensesVariable ExpensesGross Profit

enter a dollar amount
select an income statement item                                                                      Administrative ExpensesContribution MarginCost of Goods SoldFixed ExpensesNet Income/(Loss)SalesSelling ExpensesTotal Fixed ExpensesTotal Variable ExpensesVariable ExpensesGross Profit

enter a dollar amount
select a closing name for section one                                                                      Administrative ExpensesContribution MarginCost of Goods SoldFixed ExpensesNet Income/(Loss)SalesSelling ExpensesTotal Fixed ExpensesTotal Variable ExpensesVariable ExpensesGross Profit

enter a total amount for section one
select a summarizing line for the first part                                                                      Administrative ExpensesContribution MarginCost of Goods SoldFixed ExpensesNet Income/(Loss)SalesSelling ExpensesTotal Fixed ExpensesTotal Variable ExpensesVariable ExpensesGross Profit

enter a total amount for the first part
select an opening name for section two                                                                      Administrative ExpensesContribution MarginCost of Goods SoldFixed ExpensesNet Income/(Loss)SalesSelling ExpensesTotal Fixed ExpensesTotal Variable ExpensesVariable ExpensesGross Profit
select an income statement item                                                                      Administrative ExpensesContribution MarginCost of Goods SoldFixed ExpensesNet Income/(Loss)SalesSelling ExpensesTotal Fixed ExpensesTotal Variable ExpensesVariable ExpensesGross Profit

enter a dollar amount
select an income statement item                                                                      Administrative ExpensesContribution MarginCost of Goods SoldFixed ExpensesNet Income/(Loss)SalesSelling ExpensesTotal Fixed ExpensesTotal Variable ExpensesVariable ExpensesGross Profit

enter a dollar amount
select an income statement item                                                                      Administrative ExpensesContribution MarginCost of Goods SoldFixed ExpensesNet Income/(Loss)SalesSelling ExpensesTotal Fixed ExpensesTotal Variable ExpensesVariable ExpensesGross Profit

enter a dollar amount
select a closing name for section two                                                                      Administrative ExpensesContribution MarginCost of Goods SoldFixed ExpensesNet Income/(Loss)SalesSelling ExpensesTotal Fixed ExpensesTotal Variable ExpensesVariable ExpensesGross Profit

enter a total amount for section two
select a closing name for this statement                                                                      Administrative ExpensesContribution MarginCost of Goods SoldFixed ExpensesNet Income/(Loss)SalesSelling ExpensesTotal Fixed ExpensesTotal Variable ExpensesVariable ExpensesGross Profit

$enter a total net income or loss amount

  

  

Incorrect answer iconYour answer is incorrect.

Calculate variable cost per bottle. (Round variable cost per bottle to 3 decimal places, e.g. 0.251.)

Variable cost per bottle

$enter variable cost per bottle rounded to 3 decimal places

  

  

Incorrect answer iconYour answer is incorrect.

Compute the break-even point in (1) units and (2) dollars. (Round answers to 0 decimal places, e.g. 1,225.)

(1) Compute the break-even point

enter the break-even point in units rounded to 0 decimal places

 units
(2) Compute the break-even point

$enter the break-even point in dollars rounded to 0 decimal places

  

  

Incorrect answer iconYour answer is incorrect.

Compute the contribution margin ratio and the margin of safety ratio. (Round variable cost per bottle to 3 decimal places, e.g. 0.25 and final answers to 0 decimal places, e.g. 25%.)

Contribution margin ratio

enter percentages rounded to 0 decimal places

 %
Margin of safety ratio

enter percentages rounded to 0 decimal places

 %

  

  

Incorrect answer iconYour answer is incorrect.

Determine the sales dollars required to earn net income of $54,250. (Round answer to 0 decimal places, e.g. 1,225.)

Required sales dollars

$enter the sales dollars required to earn net income of $54,250 rounded to 0 decimal places

  

  

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In: Accounting

What are physical reasons for why most spirals are blue (or blueshifted) and most ellipticals are...

What are physical reasons for why most spirals are blue (or blueshifted) and most ellipticals are red (or redshifted)?

In: Physics

A study was done to determine what beverage individuals prefer the most the distribution of most...

A study was done to determine what beverage individuals prefer the most the distribution of most preferred beverages is 37% coffee 23% 17% alcohol 5% water 18% other. a survey was done asking individuals with the most preferred beverages and the results are indicated in the given table at the 0.05 level of significance can it be concluded that the percentage differ from those stated the chart is coffee 68 soda 51 alcohol 42 water eight other 31

In: Statistics and Probability

what is the most important thing of opportunity cost? what is the most important thing of...

what is the most important thing of opportunity cost?

what is the most important thing of scarcity in economic ?

In: Economics

One of the most important features of most prokaryotes is their cell wall. Please explain the...

One of the most important features of most prokaryotes is their cell wall. Please explain the structural and functional properties of the cell walls in gram-positive and gram-negative bacteria.?

In: Biology