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2 years ago

Explain two factors A&B should take into account when deciding which price method to use.

Business

1 answer:

Eduardwww [97]2 years ago

5 0

Answer:

Whether the demand for their product is elastic or inelsatic AND whether they have close competitors

Explanation:

*DEMAND ELASTIC OR INELASTIC*

If the product A&B is selling has close substitutes, the product is likely to be more elastic. This means that even a slight rise in price will shift consumers to the substitutes ( competitor's product) which have lower prices. Moreover if the product takes a larger proportion of people's income, and is a luxury, the price is likey to be elastic. However if the product is inelastic ( the product doesn't have close substitutes), an increase in price will not cause much fall in sales, resulting in the prevention of losses in revenue. By using this knowledge A&B can determine whether or not they can use price skimming or promotional pricing.

*CLOSE COMPETITORS*

If the product that A&B is selling has close competitors, raising the price greater than competitor's prices will result in losses of A&B and it will loose customers to rival businesses. A&B can also decide by observing the quality of rival's products and examine whether they should further increase the quality and set higher prices for their product to create a 'higher quality image'.

Through these observations A&B can decide if competitive pricing or penetration pricing will be suitable for it or not.

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A machine purchased on 1/1/21 for $24,000 and on which $14,400 of Accumulated Depreciation has been recorded through 12/31/23 wa

Amanda [17]

Answer:

Gain on disposal = $7600

Explanation:

As the machine is sold on 1 April 2024, we first need to update the depreciation expense and charge the depreciation to the date. The depreciation has been charged till 1 December 2023. So, we need to charge the depreciation for three more months.

The formula for depreciation expense under straight line method is,

Depreciation expense per year = (Cost - Salvage value) / Estimated useful life

Depreciation expense per year = (24000 - 0) / 5

Depreciation expense per year = $4800 per year

Depreciation expense for three months = 4800 * 3/12 = $1200

Accumulated depreciation 1 April 2024 = 14400 + 1200 = $15600

To calculate the gain or loss on disposal, we first need to determine the net book value of asset and deduct it from the cash received on disposal.

NBV = Cost - Accumulated depreciation

NBV = 24000 - 15600

NBV = $8400

Gain on disposal = 16000 - 8400

Gain on disposal = $7600

6 0

3 years ago

Campus Bus Service entered into a contract with Smith Bus Company to purchase 10 buses. One week before Campus Bus was scheduled

dangina [55]

Options:

Smith Bus should be excused from performance under the clause for the rights on improper delivery
Smith Bus should not be excused from performance because it did not act in good faith
Smith Bus should be excused from performance under the test of commercial impracticability
Smith Bus can exercise its right of anticipatory repudiation

Answer:

Correct answer is Option c.

<u>Smith Bus should be excused from performance under the test of commercial impracticability </u>

Explanation:

In this case, Smith cannot fulfil the contract obligation due to an unforeseen event. Hence, Commercial impracticability shall apply.

5 0

3 years ago

Sanjay is the manager at a restaurant and offers to promote Linda, a waitress at the same restaurant, in return for sexual favor

Tresset [83]

Answer:quid pro quo harassment

Explanation:It is sexual and involves exchanges in a workplace.

3 0

3 years ago

What is the process of converting the currency of one country into the currency of another country?

Arada [10]

Answer:

Foreign exchange

Explanation:

The process of converting the currency of one country to another is known as foreign exchange or Forex. Converting or exchanging to a particular currency is buying that currency. One needs to have their home currency or any other currency to convert it to the desired currency.

If both currencies have equal strengths, then one unit of a currency should exchange with one unit of the other. The exchange rate would be one. Since currencies have different strengths, they convert or exchange at different rates.

5 0

3 years ago

The Jamesway Corporation had the following situations on December 2021.On December 10, 2021, Jamesway received a $4,000 payment

hjlf

Answer:

Date Particulars Debit Credit

Deferred Service Revenue A/c $4,000

To Revenue A/c $4,000

(Being Revenue recognized)

Advertisement Expense A/c $2,600

To Prepaid Advertisement A/c $2, 600

(Being expense recognized)

Employees Salaries A/c $16,000

To Outstanding Employees Salaries A/c $16,000

(Being expense & liability recorded)

Interest expense A/c $1,600

To Interest Liability A/c $1,600

(Being Interest expense & Liability for the

month September to December recorded)

Assumptions & Working notes:-

i) Since service is performed in the same financial year revenue is transferred from deferred revenue account to revenue account.

ii) Since 20 advertisements shown in the month of December only so expense related to those 20 is recognized in the month of December and remaining in the month of January.

$5,200/40*20 = $2,600

iii) Since salaries are paid in month of January but this is the expense for the month of December we recorded above entry.

iv) Interest Expense for months September to December is recorded and corresponding liability is created.

($60,000 * 8%) / 12 * 4 = $ 1,600

6 0

3 years ago