2.A company began 2019 with retained earnings of $23.45 million. During the year, it paid four quarterly dividends of 0.25 per share to common stockholders holding 1 million shares. Preferred stockholders, holding 0.5 million shares, were paid four quarterly dividends of 0.50 per share. The firm had a net profit after taxes of 2.18 million. What is the value of the retained earnings balance at the end of the year
Answer: $23.63 million
Explanation:
First and foremost, we can calculate the quarterly common stockholder dividend which will be:
= $0.25 × 1 Million
= $0.25 million
Then, the annual dividend to the common stockholders will be:
= $0.25 million × 4
= $1 million
The quarterly preferred stockholder dividend will be calculated as:
= $0.50 × 0.50 Million
= $0.25 million
We would then multiply $0.25 million by 4 to get the annual dividend attributable to the preferred stockholders which will be:
= $0.25 million × 4
= $1 Million
Total Dividend would then be:
= Annual dividend to common stockholders + Annual dividend to preferred stockholder
= $1 Million + $1 Million
= $2 Million
The value of the retained earnings balance at the end of the year will then be:
= Retained Earnings at the beginning of the year + Net Income – Dividend
= $23.45 + $2.18 - $2.00
= $23.63 million
Communication begins with the self
Answer:
In psychology, this refers to your sense of self-knowing your perspective, thoughts, values, feelings, and desires. It also means articulating your thoughts and emotional needs in a way that is congruent, exposing who you truly are.
Explanation:
The bank has a 10% reserve requirement. Record each transaction in the category it belongs in. Carry forward the information from the previous transaction. The categories you will use are those included below.
Eli has $5,000 in cash and decides that he needs to open a checking account at Main Street Bank.
Assets Liabilities
Required Reserves - 500
Excess Reserves -
Loans - 4500 Checkable Deposits - 5000
Answer:
ASSETS
Required Reserves $500
Excess Reserves $5,000
Loans $5,000
LIABILITIES
Checkable Deposits $4,500
Explanation:
Based on the information given in a situation where Eli has the amount of $5,000 in cash in which he decided that he will needs to open a checking account which means that the category to Record this transaction will be:
ASSETS
Required Reserves $500
(10% reserve requirement *$5,000 Cash)
Excess Reserves $5,000
Loans $5,000
LIABILITIES
Checkable Deposits $4,500
[$5,000-(10% reserve requirement *$5,000 Cash)]
($5,000-$500)
=$4,500
According to the video, what challenges do Clergy face? Check all that apply.
angry congregations
stubborn advisors
difficult paperwork
demands on time and energy
long hours
Answer:
4,5
Explanation:
Answer:
D: Demands on time and energy
E: Long hours
Explanation:
I got it right on my assignment for the Career Explorations.
Principles are a. the obligations businesses have to maximize their positive impact and minimize their negative impact. b. mores, values, and customs that guide behavior in general. c. laws and regulations that guide behavior in the world of business. d. specific and pervasive boundaries for behavior that are universal and absolute. e. the mores, values, and customs that parents teach their children.
Answer:
b. mores, values, and customs that guide behavior in general.
Explanation:
It is correct to say that principles are the customs and values that guide behavior in general. It is through the principles of society that are acquired through cultural, political and social interactions, that the bases that will form the laws and legal norms of a society are formed.
It is also correct to affirm that each location has its own set of principles, so that they are not universal customs and values, nor encompassing only in the business world, but encompassing in all areas of human life.
How you see your self can make a great different
in how
you Communicate
Answer: It is not what you say but how you say it.
Explanation: I have always been a person who communicates well but with my flaws. Sometimes the tone of voice can be betrayed, so it is important to use the right one so that people can feel the warmth of the words. The way things are said is more than what is said. It is not a matter of lying but of saying things in a way that is real but at the same time within a framework of respect.
Assume (1) estimated fixed manufacturing overhead for the coming period of $204,000, (2) estimated variable manufacturing overhead of $2.00 per direct labor hour, (3) actual manufacturing overhead for the period of $320,000, (4) actual direct labor-hours worked of 54,000 hours, and (5) estimated direct labor-hours to be worked in the coming period of 55,000 hours. The amount of overhead applied to production during the period is closest to:
Answer:
Allocated MOH= $308,340
Explanation:
First, we need to calculate the predetermined overhead rate:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Predetermined manufacturing overhead rate= (204,000/55,000) + 2
Predetermined manufacturing overhead rate= $5.71 per direct labor hour
Now, we can allocate overhead based on actual hours:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Allocated MOH= 5.71*54,000
Allocated MOH= $308,340
Multinational, Inc. has recently closed several of plants in the United States and is planning to move the work of those plants to facilities in developing countries in the Pacific Rim. The employees of Multinational, Inc. have never been unionized. Zachary Bowman thinks it would be a good idea for him and his fellow employees to unionize. What is the first step that Mr. Bowman should take to begin the unionization process
Answer:
Build an organization committee
Explanation:
In simple words, the first step of unionization will be forming a committee if the union which will give it a face and formal identity. It will help to gather the individual, who are in favor of the notion in subject, in a more efficient and effective manner.
The formation of committee can also gather the ideas and problems and can also act legally.
The doctrine of state decisis is a
5 points eBookPrintItem 3 At the end of last year, the company's assets totaled $870,000 and its liabilities totaled $745,000. During the current year, the company's total assets increased by $59,000 and its total liabilities increased by $24,500. At the end of the current year, stockholders' equity was:
Answer:
$159,500
Explanation:
The computation of the ending stockholder equity at the current year is given below:
As we know that
Total assets = Total liabilities + stockholder equity
Now both are increased by some amount, so the ending stockholder equity at the current year is
= ($870,000 + $59,000) - ($745,000 + $24,500)
= ($929,000) - ($769,500)
= $159,500
Suppose that a developer is choosing tenants for a shopping center. There are four possible tenants: a DEPARTMENT STORE, a TOY STORE, a SHOE STORE, and a HARDWARE STORE. If each store were to be located in isolation outside a shopping center it would earn a certain level of gross profit per period (this is the level of profit before subtracting out space rent). In addition, each store requires a certain number of square feet of floor space, which is the same regardless of whether or not it locates in a shopping center. The relevant values for each store type are as follows:
Store Type: Gross Profit in Isolation Required Square Footage
Department $100,000 9,000
Toy $11,200 1,000
Shoe $7,800 800
Hardware $7,000 1,100
When the stores are located together, each store earns a greater gross profit from the extra customer traffic generated by the nearby locations of other stores. The increase in gross profit for each store resulting from the presence of other store types is as follows
Affected Store Type:
Department Toy Shoe Hardware
Department -- $6000 $8000 $1000
Toy $2000 -- $600 $300
Shoe $2000 $500 -- $200
Hardware $1000 $400 $200 --
Suppose that the shopping center developer charges a rent equal to each store’s gross profit, leaving the store with a net profit of exactly zero. Total rent from the shopping center is then equal to the total gross profit of all its stores. The developer’s profit is thus equal to total gross profit of all stores in the center minus the cost of providing space to the stores (that is, total rent minus the cost of providing space). Finally, suppose that due to high-quality construction and the need to provide common space around the stores, the construction cost for shopping center space is high. In particular, suppose that the cost per period per square foot of store floor space is $10.
A) Give an intuitive explanation for the pattern of incremental profits from the presence of other stores in the second table above
B) Suppose the developer were to construct a single-store shopping center (a contradiction in terms, perhaps). There are four types of such centers (a Department Store alone, a Toy Store alone, etc.). Using the information above, compute the developer’s profit from each of these four types of centers
C) Next compute the developer’s profit from the various types of two-store shopping centers (i.e., Department Store plus Shoe Store, Department Store plus Toy Store, etc.; how many possibilities are there?)
D) Finally, compute profits from the various types of three-store centers and from the single type of four-store center
E) Comparing your answers from (b), (c), and (d), identify the optimal shopping center (the one yielding the highest profit to the developer). Explain intuitively why this particular collection of stores is optimal.
Answer:
Answer is explained in the explanation section below.
Explanation:
Solution:
a) Explanation:
Closeness of different shops at one place would result in the increased Profit because of the following reasons:
1. People usually wish to save extra bucks whenever possible, so in this case, they will be saving their travel cost because, they don't need to go somewhere else for other products. As they will be getting every product they need in a single complex.
2. Secondly, because of the greater visibility of different products people would buy things they don't even need for the time being, resulting in the increase in profits.
b) Single Store Shopping Centre:
For Department:
Rent of the store = $ 100,000
Cost ($ 10 per sq. foot) = 9000 x 10 = $ 90,000
Profit = $ 100,000 - $ 90,000 = $ 10,000
For Toy Store:
Rent of the store = $ 11,200
Cost ($ 10 per sq. foot) = 1,000 x 10 = $ 10,000
Profit = $ 11,200 - $ 10,000 = $1,200
For Shoe Store:
Rent of the store = $ 7,800
Cost ($ 10 per sq. foot) = 800 x 10 = $8000
Profit = $ 7,800 - $8000 = -$200
For Hardware Store:
Rent of the store = $7,000
Cost ($ 10 per sq. foot) = 1,100 x 10 = $11,000
Profit = $7,000 - $11,000 = -$4000
c) Two-Store Shopping centers:
Department + Toy :
Toy affected Score = $6000
So,
Profit of Affected Department = $10000 + $6000 = $16000
Profit of Affected Toy Store = $2000 + $1200 = $3200
Total Profit = Profit of Affected Toy Store + Profit of Affected Department
Total Profit = $16000 + $3200 = $19200
Similarly,
For Department + Shoes:
Shoes Affected Score = $8000
So,
Profit of Affected Department = $10000 + $8000 = $18000
Profit of Affected Shoe Store = -$200 + $2000 = $1800
Total Profit = $18000 + $1800 = $19800
Similarly,
For Department + Hardware:
Hardware affected Score = $1000
So,
Profit of Affected Department = $10000 + $1000 = $11000
Profit of Affected Hardware Store = -$4000 + $1000 = -$3000
Total Profit = $11000 -$3000 = $8000
Similarly,
For Toy + Shoes:
Shoes affected Score = $600
Profit of Affected Toy = $1,200 + $600 = $1800
Profit of Affected Shoe Store = -$200 + $500 = $300
Total Profit = $1800 + $300 = $2100
Similarly,
For Toy + Hardware:
Hardware affected Score = $300
So,
Profit of Affected Toy = $1,200 + $300 = $1500
Profit of Affected Hardware Store = -4,000 + 400 = -3600
Total Profit = $1500 -3600 = -2,100
Similarly,
Shoes + Hardware:
Hardware affected Score = $200
Profit of Affected Shoes = -200 + 200 = 0
Profit of Affected Hardware Store = -4,000 + 200 = -3800
Total Profit = 0 - 3800 = -3800
Similarly,
d) Three-store Shopping centers:
For Department + Toy + Shoes:
Department Profit = 10,000 + 6,000 + 8,000 = $24000
Toy Profit = 1,200 + 2,000 + 600 = $3800
Shoes Profit = -200 + 2,000 + 500 = $2300
Total Profit = $24000 + $3800 + $2300 = 30,100
For Department + Toy + Hardware:
Department Profit = 10,000 + 6,000 + 1,000 = $17000
Toy Profit = 1,200 + 2,000 + 300 = $3500
Hardware Profit = -4,000 + 1,000 + 400 = -$2600
Total Profit = $17000 + $3500 - $2600 = 17,900
Department + Shoes + Hardware:
Department Profit = 10,000 + 8,000 + 1,000
Shoes Profit = -200 + 2,000 + 200
Hardware Profit = -4,000 + 1,000 + 200
Total Profit = 18,200
Toy + Shoes + Hardware:
Toy Profit = 1,200 + 600 + 300
Shoes Profit = -200 + 500 + 200
Hardware Profit = -4,000 + 400 + 200
Total Profit = -800
Four store Shopping Centre:
Department + Toy + Shoes + Hardware:
Department Profit = 10,000 + 6,000 + 8,000 + 1,000
Toy Profit = 1,200 + 2,000 + 600 + 300
Shoes Profit = -200 + 2,000 + 500 + 200
Hardware Profit = -4,000 + 1,000 + 400 + 200
Total Profit = 29,200
E)
Now, if you see and compare between the profits of above calculated different category stores, then maximum profit is gained by 3 store shopping center. So, the optimal store is 3 store shopping center.
Which situation is most likely to result in a government having a budget
surplus for a year?
Please help !!!!
Answer:tylko odpowiedź D
Explanation:
Tax rate 21% Estimated tax payment 21,000 Investment cost and ending fair values for 20X1 and 20X2: 20X1 20X2 Cost 100,000 100,000 Fair value 110,000 134,000 Total gain 10,000 34,000 20X1 income statement information: Sales 1,670,200 Expenses 1,536,600 Assuming the investement is long-term, what is the accumulated other comprehensive income on the 20X2 balance sheet?
Answer:
34,000
Explanation:
The computation of the accumulated other comprehensive income on the 20X2 balance sheet is shown below:
In the given situation , since the investment is a long term and it would also be classified as an available for securities So if there is any unrealized gain or loss so the same would be reported
As we can see there is a gain of 34,000 in 20X2 so the same is to be shown in the accumulated other comprehensive income
3. Earl Shell owns his own Sno-Cone business and lives 30 miles from a beach resort. The sale of Sno-Cones is highly dependent upon his location and upon the weather. At the resort, he will profit $120 per day in fair weather, $10 per day in bad weather. At home, he will profit $70 in fair weather, $55 in bad weather. Assume that on any particular day, the weather service suggests a 40% chance of foul weather. (1) Construct Earl's decision tree. (2) What decision is recommended by the expected value criterion
Answer:
1) Earl has two options:
sell at the beach
good weather results in $120 profit (60% chance = $72)
bad weather results in $10 profit (40% chance = $4)
sell at home
good weather results in $70 profit (60% chance = $42)
bad weather results in $40 profit (40% chance = $16)
the expected value of selling at the beach = $76
the expected value of selling at home = $58
2) Earl should go to the beach.
Healthy competition among businesses is good for consumers.
True or False
I say true because it seems like most likely answer.
Suppose a city block was going to be used for a parking lot in both New York City and a small town. The opportunity cost would be multiple choice 2 lower in New York City because the alternative uses of the city block are more varied. lower in a small city because the alternative uses of the city block are more varied. greater in New York City because the alternative uses of the city block are more valuable. greater in a small city because the alternative uses of the city block are more valuable.
Answer:
c. The opportunity cost would be greater in New York City because the alternative uses of the block are more valuable.
Explanation:
Value of piece of land would be much higher in New York City in comparison to a small town.
This means that if a piece of land is used for parking lot in the New York City then the alternative use of such land would be more valuable in comparison to the utilization of similar piece of land in a small town.
Higher the value of alternative uses, higher would be the opportunity cost. So, the opportunity cost would be greater in New York City because the alternative uses of the block are more valuable.
Improvised explosive devices (IEDs) are responsible for many deaths in times of strife and war. Unmanned ground vehicles (robots) can be used to disarm the IEDs and perform other tasks as well. If the robots cost $130,000 each and the military arms unit signs a contract to purchase 3,500 of them now and another 6,500 one year from now, what is the equivalent annual cost of the contract over a 5-year period at 10% per year interest
Answer:
$258,434,439.9
Explanation:
Calculation for what is the equivalent annual cost of the contract
Equivalent annual cost = [3,500 x $130,000 x A/P(10%, 5) ]+ [6,500 x $130,000 x P/F(10%, 5) x A/P(10%, 5)]
Equivalent annual cost = [$455,000,000 x 0.2638] + [$845,000,000 x 0.6209 x 0.2638]
Equivalent annual cost =$120,029,000+$138,405,439.9
Equivalent annual cost =$258,434,439.9
Therefore the equivalent cost of the contract is determined to be $258,434,439.9
The large percentage of population involved in agriculture in China indicates that most people consume an inadequate number of calories. most people must produce food for their own survival factory production cannot expand. the country imports most of its food. few people are unemployed
Answer:
The answer is "most people must produce food for their own survival".
Explanation:
Its large percentage of Chinese people involved in agriculture indicates that the majority of people have had to make food to sustain themselves. The processing of dairy products, wool, fruits, veggies, meat, livestock, eggs, and farmed fish is among the first nations in the world. Only with importance attached to opening farming with the outside world, China is becoming more and more closely connected with the other countries.
The CEO of a national restaurant chain wants to create a new and improved performance appraisal system. She meets with the vice president of HR to ask her to design the new system. How can the vice president of HR use job analysis in this situation
Answer:
It can be used to identify the appropriate criteria for evaluating employee job performance.
It can be used to design the format and rating format for a performance appraisal.
Explanation:
Since in the question it is mentioned that she meets with the vice present in order to design the new system so here the vice present could do the job analysis as follows;
1. There should be appropriate criteria for analysing and evaluating the job performance of the employees
2. Also the format should be designed and the rating format for the performance appraisal
These two things should be considered
Mohawk Machining, which uses a process-costing system, adds material at the beginning of production and incurs conversion cost evenly throughout manufacturing. The following selected information was taken from the company's accounting records: Total equivalent units of materials: 8,000 Total equivalent units of conversion: 7,400 Units started and completed during the period: 6,500 On the basis of this information, the ending work-in-process inventory's stage of completion is:_____.
A- 80%.
B- 70%.
C- 60%. - 40%.
D- some other percentage not listed above.
Answer:
C. 60%
Explanation:
Equivalent unit of Materials = 8,000.00
Equivalent unit of Conversion = 7,400.00
Units started and completed = 6,500.00
Since Materials are entered in the beginning it means that out of 8000 Units of Materials 6500 units are in Units started and completed and remaining 1500 Units are in Closing inventory. It also means that 1500 units are in Closing Inventory of Conversion and Equivalent production of conversion part of 1500 Units are 900 Units (7400-6500).
Let % Completion be x
X% of 1500 = 900
X = 900*100/1500
X = 60%.
Classify each of the following costs as a direct cost or an indirect cost, assuming that the cost object is the Juniors Department (clothing and accessories for teenage and young women) in the Stow Kohl's department store. (Kohl's is a chain of department stores and has stores located across the United States.) a. Juniors Department sales clerks ▼ b. Cost of Juniors clothing c. Cost of hangers used to display the clothing in the store d. Electricity for the building e. Cost of radio advertising for the store f. Juniors clothing buyers' salaries (these buyers buy for all the Juniors Departments of Kohl's stores)
Answer:
The correct answers are:
a - Direct cost
b - direct cost
c - indirect cost
d - indirect cost
e - indirect cost
f - direct cost
Explanation:
On the one hand, the term of "direct cost" in the field of management and accounting refers to the type of cost that is directly associated with the production of a good in particular. So that basically means that a direct cost of a product is something that was extremely necessary to use in the production of it or in the other case it could not have been made.
On the other hand, the term of "indirect cost" refers to the whole opposite concept, meaning that the indirect cost will be those who can not be directly associated with a product or its production but instead it is implicated actually with a whole other activites in the company, such is the case of the electricity of the building.
You are considering an investment in Crew Cut, Inc. and want to evaluate the firm's free cash flow. From the income statement, you see that Crew Cut earned an EBIT of $23.18 million, paid taxes of $3.82 million, and its depreciation expense was $7.82 million. Crew Cut's gross fixed assets increased by $10.18 million from 2017 to 2018. The firm's current assets increased by $6.18 million and spontaneous current liabilities increased by $3.82 million. What is Crew Cut's operating cash flow, investment in operating capital and free cash flow for 2018, respectively in millions
Answer:
See below
Explanation:
•Crew Cut's operating cash flow was;
Operating cash flow = EBIT - Taxes + Depreciation
= $23.18 million - $3.82 million + $7.82 million
= $27.18 million
• Investment in operating capital for 2018
Investment in operating capital = Change in gross fixed assets + Change in net working capital
= $10.18 million + ($6.18 million - $3.82 million)
= $10.18 million + $2.36 million
= $12.54 million
• Free cash flow for 2018
Free cash flow = Operating cash flow - Investment in operating capital
= $27.18 million - $12.54 million
= $14.64 million
During its first five years of operations, a company reports net income and pays dividends as follows. Required: Calculate the balance of retained earnings at the end of each year. Note that retained earnings will always equal $0 at the beginning of year 1.
Answers:
Years:
$700$1,900$3,000$5,200$8,600Explanation:
Retained earnings for the year is:
= Beginning retained earnings + Net income - Dividends
Year 1
= 0 + 1,200 - 500
= $700
Year 2
= 700 + 1,700 - 500
= $1,900
Year 3
= 1,900 + 2,100 - 1,000
= $3,000
Year 4
= 3,000 + 3,200 - 1,000
= $5,200
Year 5
= 5,200 + 4,400 - 1,000
= $8,600
A national restoration contractor has $5 million to invest in new software to become more efficient in writing estimates and reducing errors, increasing net profits for the company. There are three products under consideration, each with a cost of $5 million to implement across the company. Which product should be purchased
Answer:
Product B
Explanation:
We are informed about A national restoration contractor who has has $5 million to invest in new software to become more efficient in writing estimates and reducing errors, increasing net profits for the company. There are three products under consideration, each with a cost of $5 million to implement across the company. In this case The product he should purchased is Product B
International businesses need to understand the nature of the globalization debate and observe how their own practices may act in support of, or against globalization.
a. True
b. False
Answer:
true
Explanation:
Analysis of a company's financial statements: Below are simplified versions of the balance sheet and income statement for Toys by Tom, Inc. Use this information to answer the following question. A 15% increase in inventory turns for Toys by Tom, Inc. would bring this ratio to ____, suggesting ________ in ________.
Answer: 3.9 times; an improvement; efficiency
Explanation:
Inventory turns is calculated by the formula:
= COGS / Inventory
= 8.4 / 2.50
= 3.36
Increased by 15%:
= 3.36 * (1 + 15%)
= 3.864
= 3.9 times
Inventory turns is used to show how often the inventory was sold in a period. A higher ratio therefore presents increased efficiency and is desired.
A Student table and an Address table contain one linked record. What kind of table relationship do these tables
demonstrate?
a. one-to-one
b. one-to-many
c. many-to-many
d. many-to-none
Answer:
A.)
Explanation:
hope this helps
*80 points* Introduce a blog owner (a company, organization, or school). Analyze a professional blog owned by a company or by a not-for-profit organization. Professional blogs are different from personal blogs in many ways. You'll compare these two types of blogs.
Compare and contrast the professional blog that you have chosen with the personal blog on the following dimensions:
Topic: What is the topic of the professional blog? How is it different from the topic of the personal blog?
Design: How do the designs of the two blogs (layout, font, color theme, images, styles, and so on) vary?
Structure and Content: Explain how the structure and the presentation of data and content in the two blogs vary?
Audience: (followers/subscribers) Who is the target audience for each blog? What is the targeted demographics for each blog? What kind of audience does each blog attract? Is the audience different from the intended audience? How is the audience for your personal blog different from the audience for the professional blog?
Other Social Media Links: Which other types of social media are linked to each blog? How do they help drive more traffic to the blog? How are the social media links in the nonpersonal blog different from the links in your personal blog?
Evaluation: Summarize how the blogs are different.
Answer: A blog (a truncation of "weblog") is a discussion or informational website published on the ... However, blog owners or authors often moderate and filter online comments to remove hate speech or other offensive content. ... by inventing new ways to navigate through huge amounts of information present in the blogosphere
Explanation: i hope that helps you!
Ketchup is a complement (as well as a condiment) for hot dogs. If the price of hot dogs rises, the quantity of hot dogs demanded ____________, which _________ the demand for ketchup. Because of the change in the equilibrium quantity of ketchup, the demand for tomatoes by ketchup producers ___________, causing the equilibrium price of tomatoes to___________. This means producers of tomato juice face__________ input prices, and the supply curve for tomato juice ____________). The resulting ____________ in the price of tomato juice causes people to substitute (away from tomato juice and toward orange juice/away from orange juice and toward tomato juice), so the demand for orange juice ________.
Answer:
Falls; lowers; falls; decrease; lower; increases; fall; away from orange juice and toward; fall.
Explanation:
In Economics, there are primarily two (2) factors which affect the availability and the price at which goods and services are sold or provided, these are demand and supply.
The law of demand states that, the higher the demand for goods and services, the higher the price it would be sold all things being equal. On the other hand, law of supply states that the higher the price of goods and services, the lower the supply.
Generally, consumers would like to be buy a product as its price falls or become inexpensive.
For substitute or complement products (goods), the price elasticity of demand is always positive because the demand of a product increases when the price of its close substitute (alternative) increases.
In this scenario, Ketchup is a complement (as well as a condiment) for hot dogs. If the price of hot dogs rises, the quantity of hot dogs demanded falls, which lowers the demand for ketchup. Because of the change in the equilibrium quantity of ketchup, the demand for tomatoes by ketchup producers falls, causing the equilibrium price of tomatoes to decrease. This means producers of tomato juice face lower input prices, and the supply curve for tomato juice increases. The resulting fall in the price of tomato juice causes people to substitute away from orange juice and toward tomato juice, so the demand for orange juice falls.
When sales increase by 3%, which of the following should also increase by 3% in a merchandising company?
A. Variable cost.
B. Fixed cost.
C. Gross margin.
D. Contribution margin.
E. Net operating income.
When sales increase by 13%, which of the following should increase by more than 13% in a merchandizing company?
A. Variable cost.
B. Fixed cost.
C. Gross margin.
D. Contribution margin.
E. Net operating income.
Answer:
Part 1
C. Gross margin
E. Net operating income
Part 2
C. Gross margin
E. Net operating income
Explanation:
A merchandizing company bought goods for resale rather than manufacturing and selling as seen with manufacturing companies.
The items which vary with sales in a merchandizing company are Gross Margin and Net Operating income. Such are the items that will increase with an increase in Sales.