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anyanavicka [17]
3 years ago
9

Larry manages a grocery store in a country experiencing a high rate of inflation. To keep up with inflation, he spends a lot of

time every day updating the prices, printing new price tags, and sending out newspaper inserts advertising the new prices. His employees regularly deal with customer annoyance over the frequent price changes. This is an example of th
Business
1 answer:
salantis [7]3 years ago
6 0

Answer:

menu costs of inflation

Explanation:

Menu costs of inflation refer to the costs of having to modify the prices as a result of the frequent change in the price levels of the products that force businesses to make constant updates on their sales prices. According to this, the answer is that this is an example of menu costs of inflation as the grocery store has to update the prices of the products frequently because of the high rate of inflation.

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During the first year of operations, employees earned vacation pay of $35,000. The vacations will be taken during the second yea
insens350 [35]

Answer:

False

Explanation:

In the given question it is mentioned that the employees earned vacation pay of $35,000 during the first year of the operation.

Hence,

the expenses should be recorded as the vacation pay expenses in the same year not in the following year i.e the second year whether the employees take the vacation in the same year or the next year.

6 0
2 years ago
Read 2 more answers
In a pure market economy, the "What to produce?" question is ultimately answered by:
Genrish500 [490]

In a pure market economy, the "What to produce?" question is ultimately answered by : consumer sovereignty.

Explanation:

Market autonomy is a two-way economic concept. Market autonomy in production applies to what finished products should be produced from these materials to the control power of the customers over those with scarce resources.

For example, the highest levels of consumer autonomy occur of consumers on the free market. The customer can buy any product in any quantity he wants. But the state or central government decides what to manufacture in a command economy.

8 0
3 years ago
ABC Lumber spent $1,000 cutting down a tree. The result was 40 unfinished logs that sell for $20 each and 100 bags of sawdust th
CaHeK987 [17]

Answer: below

Explanation:

- The sawdust should be sold as is without being processed into Presto

Logs.

- The pieces of unfinished lumber should be processed

8 0
3 years ago
3-30 Operating leverage. Cover Rugs is holding a 2-week carpet sale at Josh’s Club, a local warehouse store. Cover Rugs plans to
Leni [432]

Answer:

The step by step answer to your problem is given below:

Explanation:

1A) Break even point for option 1:    

Sales- Variable cost= Fixed cost    

Q* $950-Q*$760= $7410    

Q*$190= $7410  

Q=$7410/$190  

Q= 39 carpets

1B) Breakeven point for Option 2    

Sales- variable cost-rent cost= 0    

Q*$950- $760*Q- (Q*950*10%)= 0    

95Q= 0    

Q= 0

2. At what level of revenues will Cover Rugs earn the same operating income under either option?

Operating income under Option 1 = $190Q - $7140

Operating income under Option 2 = $95Q

We have to find Q such that $190Q - $7140 = $95Q

Q=$7410/$95= 78 Carpets

Revenue= $950 x 78 = $74,100

For Q = 78 Carpets, operating income under both option 1 and 2 will be = $7410

a. For what range of unit sales will Cover Rugs prefer Option 1? b. For what range of unit sales will Cover Rugs prefer Option 2?

For Q > 78, say 79 carpets:

Option 1 gives operating income= (190*79) - 7410= $7600

Option 2 gives operating income= 95*79= $7505

So color rugs will prefer Option 1.

For Q < 78, say 77 carpets:

Option 1 gives operating income= (190*77) - 7410= $7220

Option 2 gives operating income= 95*77= $7315

So color rugs will prefer Option 2.

3. Calculate the degree of operating leverage at sales of 65 units for the two rental options.

Operating Leverage= \frac{Contribution margin}{Operating Income}

= Contribution margin per unit x Numbers of Carpet Sold= Contribution Margin

Under Option 1,

Contribution Margin per unit= $950-$760=$190,

Operating income= $190*65-$7410= $4940.

Degree of Operating Leverage= \frac{190*65}{6175}

=2.5

Under Option 2,

Contribution Margin per unit= $950-$760-$760-0.10*$950=$95,

Operating income= $95x65-$0= $6175.

\frac{95*65}{6175}

=1.0

4. Briefly explain and interpret your answer to requirement 3.

The degree of operating leverage helps managers calculate and anticipate the effects of fluctuations in sales on operating income. The calculation in requirement 3 show that when sales are 65 units, a % change in sales and contribution margin will result in 2.5 times that % change in operating income for option 1. But the same % change in Option 2 because there are no fix costs attached in option 2.

6 0
3 years ago
Jubilee's Bakery is budgeting cash for 2017. The cash balance at December 31, 2016, was $6,000. Jubilee's Bakery budgets 2017 ca
marusya05 [52]

Answer: B. There is $19,000 available for additional investments.

Explanation:

Cash Receipts both Estimated and available

= Beginning balance + budget receipts

= 6,000 + 81,000

= $87,000

Cash payments

= 44,000 + 34,000 + 15,000

= $93,000

Additional financing required = Cash receipts - Cash payment - minimum cash balance

= 87,000 - 93,000 - 13,000

= -$19,000

4 0
3 years ago
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