What is consumerism? Explain this concept based on US examples of consumerism and its impact on US economy.

Eight studies are described briefly below. What research method was employed in these studies, also write the rationale of your choice of response.
1.   A researcher is interested in whether drinking water right before bed increases the likelihood that children will wet the bed at night. The researcher recruits 50 5-year-old children to participate in her study. Twenty-five children are given two glasses of water two hours before their bedtime (one glass per hour) and twenty-five children are prohibited from receiving liquids within two hours of their bedtime.
2.   A researcher was interested in how children learn how to settle disagreements with peers. The researcher talked to his five-year-old daughter and asked her to describe how she interacted with her peers. The researcher then read a few stories to his daughter about children her age who got into disagreements and asked her what she would do in that situation. The researcher continued to interview his daughter like this for five years.
3.   University officials have noticed that there is a relationship between scores on the Graduate Record Exm (GRE) and performance in graduate school. Specifically, those students with the highest scores tend to do best in school.
4.   In an attempt to determine which method would assure the best class attendance, an educational psychologist had one teacher reward students for attending class with extra points, a second teacher punish absences by deducting points, a third teacher scold students for absences, and a fourth teacher do nothing unusual. Attendance was best in the first class where the teacher rewarded the students.
5.   A researchers is interested in whether people are more likely or less likely to help someone in distress when others are present. Some subjects were testes when they alone were witness to someone in distress, while others were tested when many people were present. The researcher discovered that witnesses were much more likely to help when hey alone witnessed the person in distress.
6.   In an attempt to determine which method would assure the best class attendance, an educational psychologist had one teacher reward students for attending class with extra points, a second teacher punish absences by deducting points, a third teacher scold students for absences, and a fourth teacher do nothing unusual. Attendance was best in the first class where the teacher rewarded the students.
7.   A researcher who was suspicious that hyperactivity in children was related to the amount of sugar in their diet recorded both sugar intake and activity level for a sample of children over a five month period. The results indicated that those children who had consumed the most sure tended to be the most active.
8.   In an investigation of drug abuse, it was noted that there was a relationship between the ages at which an individual first started experimenting with drugs and the severity of the drug abuse problem. Specially, those who experimented with drugs at the earliest age tended to be those with the most severe drug abuse problems.
9.   To investigate the relationship between anxiety and test performance, three groups of subjects are tested under one of the following conditions: high anxiety, moderate anxiety, low anxiety. The moderate anxiety group performs between on the test than either the high anxiety or the low anxiety groups.
10.   Researchers looking at the relationship between intelligence and birth order found that the children with the highest IQ scores were most likely to the first born in the family.
11.   In a study of animal motivation, researchers varied the number of hours their laboratory animals were deprived of food. While some had food continuously available, others were deprived for 12 hours, and some were deprived for 24 hours. The researchers discovered that the animals deprived for 24 hours worked harder for food than did the others.

Ethics and the Manager, Understanding the Impact of Percentage Completion on Profit—Weighted-Average Method LO4–2, LO4–3, LO4–4

Gary Stevens and Mary James are production managers in the Consumer Electronics Division of General Electronics Company, which has several dozen plants scattered in locations throughout the world. Mary manages the plant located in Des Moines, Iowa, while Gary manages the plant in El Segundo, California. Production managers are paid a salary and get an additional bonus equal to 5% of their base salary if the entire division meets or exceeds its target profits for the year. The bonus is determined in March after the company’s annual report has been prepared and issued to stockholders.

Shortly after the beginning of the new year, Mary received a phone call from Gary that went like this:

1.     Gary:How’s it going, Mary?

2.     Mary:Fine, Gary. How’s it going with you?

3.     Gary:Great! I just got the preliminary profit figures for the division for last year and we are within $200,000 of making the year’s target profits. All we have to do is pull a few strings, and we’ll be over the top!

4.     Mary:What do you mean?

5.     Gary:Well, one thing that would be easy to change is your estimate of the percentage completion of your ending work in process inventories.

6.     Mary:I don’t know if I can do that, Gary. Those percentage completion figures are supplied by Tom Winthrop, my lead supervisor, who I have always trusted to provide us with good estimates. Besides, I have already sent the percentage completion figures to corporate headquarters.Page 181

7.     Gary:You can always tell them there was a mistake. Think about it, Mary. All of us managers are doing as much as we can to pull this bonus out of the hat. You may not want the bonus check, but the rest of us sure could use it.

The final processing department in Mary’s production facility began the year with no work in process inventory. During the year, 210,000 units were transferred in from the prior processing department and 200,000 units were completed and sold. Costs transferred in from the prior department totaled $39,375,000. No materials are added in the final processing department. A total of $20,807,500 of conversion cost was incurred in the final processing department during the year.

Required:

1.     Tom Winthrop estimated that the units in ending work in process inventory in the final processing department were 30% complete with respect to the conversion costs of the final processing department. If this estimate of the percentage completion is used, what would be the cost of goods sold for the year?

2.     Does Gary Stevens want the estimated percentage completion to be increased or decreased? Explain why.

3.     What percentage completion would result in increasing reported net operating income by $200,000 over the net operating income that would be reported if the 30% figure were used?

4.     Do you think Mary James should go along with the request to alter estimates of the percentage completion? Why or why not? (Note: besides the fact that manipulating numbers to meet an earnings goal is wrong tell me A) how it would negatively impact shareholders’ B) which financial statements would be impacted and how would it impact those statements C) what would be the potential ramifications if the auditors discovered the estimate manipulation D) how might the auditors discover the estimate manipulation and E) and what might happen if other employees found out about the estimate manipulation?

5.     If you were Mary, name three options you would have in dealing with this situation?

6.     If you are Mary what is your opinion of Gary after this conversation?

7.     Would you likely/not likely support a promotion for Gary within the company? Why or Why not?

8.     Are there any legal consequences to Mary if she changes the completion percentage?

9.     What percentage chance (0 – 100%) do you give yourself that you will be faced with an ethical dilemma in your career within the first 10 years post-graduation?

Jessica is a recent graduate of Brenau University’s business school entrepreneurship program. The business plan that she created before she graduated was for a business developing websites for individuals and commercial businesses. Friends and family provided funding for the start-up, and she has been in business for the last two and a half years.

Jessica had learned about the balanced scorecard in her accounting classes and has been applying some of the techniques. Her vision for this business is to provide clients with high quality websites that receive a relatively high numbers of hits. Recently, word-of mouth advertising had led to more requests for websites with creative animated graphics. As part of her balanced scorecard, she tracked the following measures over the last two years for her individual clients:

                                                                                              20x1                20x2

Average revenue per individual client                              $2,000             $1,500

Average time from start to finish (business days)           10 days            13 days

Average site ranking on top two search engines                     15                    21

Total revenue                                                                   $80,000           $78,000

Total labor cost                                                                $20,000           $22,000

Utilities cost (electricity and phone)                                 $2,100             $2,400

Number of individual clients                                                    40                    52

Employee turnover                                                                     1                      0

a.   Classify each performance measure according to one of the four balanced scorecard perspectives. Explain your reasoning.

b.   Analyze the change in each performance measure from 20X1 to 20X2. Give one possible reason for the change.

Warnerwoods Company uses a perpetual inventory system. It entered into the following purchases and sales transactions for March.

3. Compute the cost assigned to ending inventory using (a) FIFO, (b) LIFO, (c) weighted average, and (d) specific identification. For specific identification, the March 9 sale consisted of 140 units from beginning inventory and 270 units from the March 5 purchase; the March 29 sale consisted of 120 units from the March 18 purchase and 160 units from the March 25 purchase.

DO ALL 4!!!

Compute the cost assigned to ending inventory using specific identification. For specific identification, the March 9 sale consisted of 140 units from beginning inventory and 270 units from the March 5 purchase; the March 29 sale consisted of 120 units from the March 18 purchase and 160 units from the March 25 purchase.

4. Compute gross profit earned by the company for each of the four costing methods. For specific identification, the March 9 sale consisted of 140 units from beginning inventory and 270 units from the March 5 purchase; the March 29 sale consisted of 120 units from the March 18 purchase and 160 units from the March 25 purchase. (Round weighted average cost per unit to two decimals and final answers to nearest whole dollar.)

FIFO LIFE AVG Cost Spec ID
sales

less COGS

GP

2. Consider whether the US government should break up the biggest US banks. Why or why not? If the United States does so, and other nations have very large government banks, or have very large private banks, can US banks remain competitive?

Discuss how international trade affects employment. Relative to China, in which industries do you think the US have a comparative advantage (in which industries do you think the US not have a comparative advantage)? If the US stops trading with China, how will employment be affected in these industries?

Only do Part 2 Please:

Part 2: Scheduling of Deferred Taxes

From the information below, prepare Excel schedules (similar the chapter notes) for 2015 and 2016 to calculate deferred income taxes. Remember, when preparing the 2015 schedule, you do not know about any changes that come about in 2016 (i.e., prepare the 2015 schedule with 2015 information only). Given the following information for Company Z for 2015 (in its first year of calculating deferred income taxes):

1)   Company Z has one depreciable asset purchased January 2, 2015. The cost of the asset was $50,000. For financial statement purposes, Company Z is depreciating this asset over 10 years with no salvage value. For tax purposes Company Z is using MACRS, and the asset qualifies as a 5 year asset. Company Z has scheduled out the annual depreciation difference as follows:

                                  Straight-line   MACRS

            Year                (for financial)   (for tax)                    Difference

            2015                   $5,000          $ 10,000                      (5,000)

            2016                     5,000             16,000                    (11,000)

            2017                     5,000               9,600                      (4,600)

            2018                     5,000               5,760                         (760)

            2019                     5,000              5,760                         (760)

            2020                     5,000               2,880                      2,120

            2021                     5,000                  -0-                       5,000

            2022                     5,000                  -0-                       5,000

            2023                     5,000                  -0-                       5,000

            2024                     5,000                  -0-                        5,000

2) The company recognized $18,000 for income from its equity method investment in 2015, but received only $12,000 in dividends from this investment (and recognized $12,000 in dividend income for tax purposes).

3)   During 2015, Company Z recorded $14,000 as unearned subscription revenue, and plans to deliver the subscriptions in 2016. The IRS rules require that this amount be recognized as revenue in 2015.

4) The company also recognized estimated warranty expense of $6,000 in 2015. The warranties are expected to be paid out in 2017.

5) Pretax financial income was $200,000 in 2015, and a tax rate of 30 percent was enacted for the current and future years.

For 2016 (suggestion: use the blank column to record 2015 information, to reconcile totals across each line):

1) Assume that the depreciable asset continues to be depreciated on the methods above.

2) During 2016, the equity investment earned $30,000 and paid dividends to Company Z totaling $18,000. (Use a separate line in the schedule to record this new deferral.)

3) During 2016, $8,000 of the subscriptions were delivered. The balance will be delivered in 2017.

4) During 2016, $2,000 of the warranties was paid out. The balance will be settled in 2017.

5) Pretax financial income was $250,000 in 2016, and a tax rate of 40 percent was enacted for current and future years.

1. Using an AD/AS diagram, graphically and verbally describe the impact of each of the following unrelated events on the U.S. economy’s equilibrium RGDP and price level.

1. A rise in the price of oil

2. A decrease in the cost of labor (wages are going down)

3. An increase in labor productivity

4. An increase in investment by most of the US companies in the US

5. An increase in income in the Euro area

6. A decrease in value of the US dollar (relative to foreign currency)

7. A decrease in income in the US

8. The Federal Reserve lowering interest rates (expansionary monetary policy)