Read the following scenario and respond to the questions following. During the last quarter of FuturePrint’s fiscal year, Jean Day, the CFO, calculated the production volume variance for the quarter, noting a significant favorable variance resulting from increased production. In fact, although there was no change in the sales forecast for the year, production had increased 30% for the quarter. Concerned that the company may now have a backlog of inventory to manage, Day met with Gerry Rick, the plant supervisor. Mr. Rick indicated that he had directed the production department to increase manufacturing for the period. He indicated that the rationalization for increased production was that companies would have excess cash in their budgets at year end to replace existing printers with new higher tech printers such as the ones made by FuturePrint. Day was not satisfied that this was the complete story.1. What was the effect of the production volume variance on plant operating income at year end assuming none of the excess inventory was sold?2. What could have been a possible motivation for Rick’s directive?

In march 2012, the state of california started requiring that all packaging for food and drink with the additive 4-methylimidazole (4-mi) be clearly labeled with a cancer warning. because of this, both pepsi and coke changed their formula to eliminate 4-mi as an ingredient. if pepsi and coke did not change their formula, holding all else constant, what would have happened to the demand for these goods, assuming pepsi and coke were in a competitive market? a. the demand curve for both pepsi and coke would have shifted to the right, causing the price of both products to decrease and the profits for the companies to fall. b. the demand curve for pepsi and coke would have remained unchanged, but the price of both products would have decreased and the profits for the companies would have fallen. c. the demand curve for pepsi and coke would have decreased, but the prices and profits would not have changed. d. the demand curve for only one of them would change because pepsi and coke are substitutes. e. the demand curve for pepsi and coke would have shifted to the left, causing the price of both products to decrease and the profits for both companies to fall.