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1. Companies use different metrics, such as return on investment (ROI) and economic value added (EVA), to measuring their financial performance. Consider the features of these metrics and respond to the following:
How does EVA compare to ROI and residual income in measuring the financial performance of a company? Is EVA superior to ROI? Explain.
2. The CPA for Hollister Corporation said to its president, “If a product line is generating a loss, then it should be discontinued.” What are your thoughts on the statement?
Keep the following point in mind:
The reasons for discontinuing a product line are accurately identified and supported with explanations.
Explain the budgeting process and its importance to a business, identifying the components of different budgets, forecast estimates for inclusion in the budgets.
Prepare a retained earnings statement for the year and Prepare a stockholders' equity section of given case.
Prepare a master budget for the three-month period.
Construct the company's direct labor budget for the upcoming fiscal year, assuming that the direct labor workforce is adjusted each quarter to match the number of hours required to produce the forecasted number of units produced.
Evaluate the Predetermined Overhead Rate
Determine the company's bid if activity-based costing is used and the bid is based upon full manufacturing cost plus 30 percent.
Complete the schedule to compute the pool rates for the different activities.
Prepare Company financial statements
This individual assignment is based on the TerraCycle Inc.
Discuss the ethical issues
Calculate the GDP in Income Approach and Expenditure Approach
A new plant accountant suggested that the company may be able to assign support costs to products more accurately by using an activity based costing system that relies on a separate rate for each manufacturing activity that causes support costs.
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