Answer:
If prices are cut by $0.2 then the operating income will increase by $91,200.
Explanation:
Current Gross Profit is :
Revenue [240,000 * $6] = $1,440,000
Cost of Sales = $1,416,000
Gross Profit = $24,000
If selling price is reduced to $5.80
Revenue $5.80 * [ 240,000 * 1.10 % ] = $1,531,200
Cost of Sales $1,416,000
Gross Profit = $115,200
<u>Answer:
</u>
Unlike Generally Accepted Accounting Principles (GAAP) for accountants, there are not principles, standards, concepts, or values common to business ethics is a FALSE statement.
<u>Explanation:
</u>
- The GAAP has a wide range of applications owing to the unanimous addition of functions to the discipline of accountancy.
- Other than GAAP, certain countries and businesses follow the accounting methods given by 'other comprehensive basis of accounting' (OSBOA).
- Some businesses choose to follow both at once, while the majority choose to follow either of them.
Answer:
C. Sole Proprietorship
Explanation:
Sole Proprietorship is a business owned and less capital required business that can be operated, it is can be operated even by an individual with a simple setup such as a table and a chair in a garage.
With Limited Liability Company (LLC), there are a lot of legal requirements to be reached before setting it up, such as putting in place board of directors, internal auditors and external auditors, mentioning few.
With Partnership it requires two or more individuals in order to operate in addition to a partnership deed.
With Corporation it is similar to the LLC
Thus Sole proprietorship is the simplest and easiest to set up.
Answer:
A. True
Explanation:
The debt utilization ratios is used to determine the comprehensive picture for the long term financial health of the company or the solvency of the company.
The debt ratio is defined as the financial ratio which shows the percentage of the assets of an organization which are provided through a debt. When the ratio is higher, the risk involved with the operation of the firm is more.
Thus, for a high debt utilization ratio, it will always increase the return of the organization on the equity for a positive return on the assets of the organization.
Thus, the answer is TRUE.
