Coastal Packaging's ROE last year was only 3 percent, but its management has developed a new operating plan designed to improve things. The new plan calls for a total debt ratio of 60 percent, which will result in interest charges of $300 per year. Management projects an EBIT of$1,000 on sales of $10,000, and it expects to have a total assets turnover ratio of 2.0 times. Under these conditions, the average tax rate will be 30 percent. If the changes are made, what return on equity (ROE) will Coastal earn? What is the ROA?

The May 2016 revenue and cost information for Austin Outfitters, Inc. follows:

$$\begin{array}{lr} \hline \text { Sales Revenue (at standard) } & \$ 580,000 \\ \text { Cost of Goods Sold (at standard) } & 343,000 \\ \text { Direct Materials Cost Variance } & 1,200 \mathrm{~F} \\ \text { Direct Materials Efficiency Variance } & 6,000 \mathrm{~F} \\ \text { Direct Labor Cost Variance } & 4,400 \mathrm{U} \\ \text { Direct Labor Efficiency Variance } & 2,000 \mathrm{~F} \\ \text { Variable Overhead Cost Variance } & 3,000 \mathrm{U} \\ \text { Variable Overhead Efficiency Variance } & 1,500 \mathrm{U} \\ \text { Fixed Overhead Cost Variance } & 1,200 \mathrm{U} \\ \text { Fixed Overhead Volume Variance } & 8,200 \mathrm{~F} \\ \hline \end{array}$$

Prepare a standard cost income statement for management through gross profit. Report all standard cost variances for management's use. Has management done a good or poor job of controlling costs? Explain.

Multiply. Write the product in scientific notation.

$$(2.8 \times 10^5)(8 \times 10^{-8})$$