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GrogVix [38]
3 years ago
5

Lusk company produces and sells 15,900 units of product a each month. the selling price of product a is $29 per unit, and variab

le expenses are $23 per unit. a study has been made concerning whether product a should be discontinued. the study shows that $71,000 of the $109,000 in fixed expenses charged to product a would continue even if the product was discontinued. these data indicate that if product a is discontinued, the company's overall net operating income would:
Business
1 answer:
Shkiper50 [21]3 years ago
6 0
<span>Decrease by $57,400 per month. Looks look at the cash flow for continuing to produce product a and discontinuing product a. Continuing to produce Income = 15900 * $29 = $461,100 Variable Expenses = 15900 * 23 = $365,700 Fixed overhead = $109,000 Total cash flow = $461,100 - $365,700 - $109,000 = -$13,600 So the Lusk company is losing $13,600 per month while producing product a. Let's see what happens if they stop producing it. Income = $0 Variable Expenses = $0 Fixed overhead = $71,000 Total cash flow = $0 - $71,000 = -$71,000 So if they stop producing it, their fixed overhead decreases, but is still at $71,000 per month, for a total loss per month of $71,000. The conclusion is to either lose $13,600 per month, or $71,000 per month. So if they stop production of product a, their loss per month will increase by $57,400.</span>
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Cube utilization is expressed as a percentage between 0% - poor and 100% - excellent, accordingly. So if you have filled every available spot in your warehouse with product, then you have 100 percent warehouse cube utilization.

Cube utilization is related to benefit reducing transportation costs, as effective cube utilization significantly lowers freight and supply chain costs. Cubing and weighing equipment helps companies make better use of their warehouse space, cut shipping costs and reduce errors.

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1 year ago
The principal offensive strategy options include all of the following EXCEPT:A.using a cost advantage to attack competitors on t
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Answer:

All are options for offensive strategy

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In this question, we are trying to select an option which is not in terms with the other options as regards what principal offensive strategy should be.

Now, what the term principal offensive strategy refers to is that it is a type of corporate strategy that pushes for changes within the industry. What we are trying to say is that, the principal offensive strategy pursues an agenda that is pushing for a change within the industry.

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Offensive strategy types includes, an end run strategy where a company does not want competition and thus explore the part of the market with little or none.

A preemptive one which seek to conform some advantages on the company as it is the first one based on demographics

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3 years ago
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6 0
3 years ago
a company purchased supplies for cash, which will be consumed during future months. which of the following correctly describes t
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The answer choice that correctly describes the impact of the supplies purchase on the financial statements is A. total assets will remain unchanged.

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4 0
1 year ago
Excerpts from Huckabee Company's December 31, 2021 and 2020, financial statements are presented below: 2021 2020 Accounts receiv
Setler79 [48]

Answer:

71.57 days

Explanation:

For computing the average collection period first we have to determine the account receivable turnover ratio which is shown below:

Account receivable turnover ratio = Credit sales ÷ average accounts receivable

where,  

Average accounts receivable = (Opening balance of Accounts receivable + ending balance of Accounts receivable) ÷ 2

= ($75,000 + $83,000) ÷ 2

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And, the net credit sale is $403,000

Now put these values to the above formula  

So, the answer would be equal to  

= $403,000 ÷ $79,000

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Now

Average collection period in days = Total number of days in a year ÷ accounts receivable turnover ratio

= 365 days ÷ 5.10 times

= 71.57 days

5 0
2 years ago
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