1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
dimaraw [331]
1 year ago
15

Fixed expenses are $531,000 per month. The company is currently selling 4,000 units per month. The marketing manager would like

to cut the selling price by $14 and increase the advertising budget by $35,000 per month. The marketing manager predicts that these two changes would increase monthly sales by 500 units. What
Business
1 answer:
algol [13]1 year ago
3 0

The overall effect on the company's monthly net operating income of this change is <u>A. decrease of $18,000</u>.

<h3>What is break-even analysis?</h3>

The break-even analysis is an accounting tool to determine the point at which cost and income are equal and there is neither profit nor loss.

Using the break-even technique, companies can evaluate production and sales decisions to arrive at optimal decisions.

<h3>Data and Calculations:</h3>

Fixed costs per month = $531,000

Sales units per month = 4,000 units

Reduction in selling price = $14

New selling price = $186 ($200 - $14)

New fixed costs = $566,000 ($531,000 + $35,000)

News Sales units per month = 4,500 units (4,000 + 500)

New Contribution margin per unit = $146 ($186 - $40)

New Contribution margin ratio = 78.5% ($146/$186 x 100)

<h3>Determination of Change in Net Operating Income:</h3>

                                             Old          New              Difference

Total Contribution        $640,000     $657,000          $17,000

                              ($160 x 4,000)  ($146 x 4,500)

Fixed costs                      531,000       566,000       -$35,000

Net operating income $109,000         $91,000       -$18,000

<h3>Question Completion with Answer Options:</h3>

Data concerning Pellegren Corporation's single product appear below:

                                       Per Unit     Percent of Sales

Selling price                   $200                 100%

Variable expenses               40                   20%

Contribution margin        $160                   80%

What should be the overall effect on the company's monthly net operating income of this change?

A. decrease of $18,000

B. increase of $38,000

C. decrease of $38,000

D. increase of $58,000

Thus, the overall effect on the company's monthly net operating income of this change is <u>A. decrease of $18,000</u>.

Learn more about break-even analysis at brainly.com/question/21137380

#SPJ12

You might be interested in
Ending total assets are $1,500,000, inventory turnover is 6.0 times, net sales are $8,000,000 and the asset turnover is 4.0 time
NARA [144]

Answer:

$2,500,000

Explanation:

Data provided

Ending assets = $1,500,000

Inventory turnover = 6.0 times

Net sales = $8,000,000

The computation of beginning total asset balance is shown below:-

Average total assets = $8,000,000 ÷ 4

= $2,000,000

Total assets = $2,000,000 × 2

= $4,000,000

Beginning assets  = Total assets - Ending assets

= $4,000,000  - 1,500,000

= $2,500,000

Therefore we applied the above formula

8 0
3 years ago
Read 2 more answers
Suppose that there are two industries, A and B. There are five firms in industry A with sales at $5 million, $2 million, $1 mill
Sonja [21]

Answer:

3200

Explanation:

The HHI is calculated by squaring the market share of each firm in the industry.

Market share = sales of a firm / total sales of firms in the industry

total sales of firms in the industry = 5 + 2 + 1 + 1 + 1 = 10

Market share of firm A = (5/10) x 100 = 50%

Market share of firm B = (2/10) x 100 = 20%

Market share of firm C, D, E = (1/10) x 100 = 10%

50² + 20² + 10² + 10²  + 10² = 3200

4 0
3 years ago
When Callie developed a detailed description of her ideas for a gym and asked for feedback from women about the proposal, she wa
Korolek [52]
<span>When Callie developed a detailed description of her ideas for a gym and asked for feedback from women about the proposal, she was engaging in? Concept testing. Concept testing is the act of getting opinions/reactions to a product or service prior to the product or service entering the market. This helps gage consumer interest when pulling in a group of potential customers. </span>
3 0
3 years ago
The difference between the price at which a dealer is willing to buy and the price at which a dealer is willing to sell, is call
Mademuasel [1]

Answer:

Bid-ask spread.

Explanation:

The difference between the price at which a dealer is willing to buy and the price at which a dealer is willing to sell, is called the bid-ask spread.

Simply stated, the bid-ask spread refers to the amount by which the bid price by a dealer is lower than the ask-price for a security or an asset in the market at a specific period of time.

The bid-ask spread exists because of the need for dealers to cover expenses and make a profit. A bid-ask spread is use in the transaction of the following items; options, future contracts, stocks, and currency pairs.

Generally, a dealer who is willing to sell an asset or securities would receive a bid price while the price at which the dealer is willing to sell his asset to another dealer (buyer) is the ask price.

<em>Hence, the bid-ask spread is simply the difference between the ask price and the bid price. Therefore, a bid-ask spread is a measure of the demand and supply for an asset; where demand represents the bid while supply represents the ask for an asset. </em>

7 0
3 years ago
An IAR has opened an account for a new customer. The customer is "on the road" for 3-4 weeks per month and has given the IAR ver
kobusy [5.1K]

Answer:

The investment advisory firm which employs the investment adviser representative (IAR).

Explanation:

FINRA's rules specifically state that before any transaction, the IAR must have a signed power of attorney. The IAR cannot start trading or operating with the client's money until he/she has received a signed written power of attorney from the client. Only after the signed power of attorney has been given tot eh IAR, can he/she act on discretionary basis.

If the IAR is not a registered broker-dealer, then NASAA rules state that oral agreements are valid for up to 10 business days, but the IAR must have a written authorization after that time expires. I.e. the IAR could buy the stocks, but he/she was not authorized to sell them. So any loss is responsibility of the firm that employs the IAR.

6 0
2 years ago
Other questions:
  • 1. Which of the following statements defines "grace period:" 1. The grace period is the day your payment is due. 2. The grace pe
    10·1 answer
  • Using contract manufacturing as a strategy to reach global markets gives firms the advantage of
    11·1 answer
  • The opportunity cost of producing a bicycle refers to Group of answer choices the marginal cost of the last bicycle produced. th
    15·1 answer
  • A perfectly competitive small organic farm that produces 1,000 cauliflower heads in the short run has an ATC = $6 and AFC = $2.
    15·1 answer
  • When Simple Semiconductors was operating at the minimum efficient scale of 10,000–12,000 units per month, the firm's cost per un
    5·2 answers
  • Xia Co. manufactures a single product. All raw materials used are traceable to specific units of product. Current information fo
    7·1 answer
  • Anyone know the answer to this question
    6·2 answers
  • A firm had after-tax income last year of $3.0 million. Its depreciation expenses were $0.6 million, and its total cash flow was
    14·1 answer
  • On October 1, 2018, Mills Company borrowed $131,000 cash on a one-year note that required Mills to pay 5 percent interest and $1
    14·1 answer
  • Many advertising organizations say that applying the term "unfair" to an advertisement is
    8·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!