Each question should be at least 75 words a piece.
1. Brandt Gardner, the owner-manager of a small firm that manufactures feed processing equipment and round-hay bailers, is unhappy with the latest report on financial performance in the Kansas City, Missouri, plant. The company had recently installed a standard cost system in the Kansas City plant with the objective of controlling manufacturing costs. The performance report for the year ended revealed that the variances for materials, labor, and variable overhead were all within the desired ranges, but the fixed overhead spending and volume variances were both significantly unfavorable. Brandt wanted an explanation of the fixed overhead variances and a recommendation. Which do you think is more important for control of fixed overhead costs: the spending variance or the volume variance? Explain.
2. Explain why firms choose to decentralize and give an example.
3. Explain why NPV is generally preferred over IRR when choosing among competing or mutually exclusive projects. Why would managers continue to use IRR to choose among mutually exclusive projects?
4. Explain how a company can report a positive net income and yet still have a negative net operating cash flow.
5. What is the most important reason for an organization to use enterprise risk management?
6. When a company participates in a stock buyback program, it means that the company is buying shares of its own stock and taking them off the market. With this simple definition in mind, how would a company’s stock buyback program affect its Earnings per Share?