Imposed by goveement below equilibrium price
Answer:
1. <u>Impact on profits</u>:
Contribution Margin = $63,000
Less: Traceable Rent = $10,000
Less: Salary of Director = $10,000
Total avoidable fixed expenses = <u>$20,000</u>
Decrease in Profits = <u>$43,000</u>
Hence, the profits will reduce by $43,000 if the basketball program is eliminated.
3. If the allocated fixed costs can be reduced by $50,000. The program should be dropped since there will be an increase in profits by $7,000 (50,000 - 43,000). The avoidable costs and revenues should be taken into account for the purpose of this decision. If the avoidable costs are more than the revenues, the line should be dropped else not.
Hence, since after considering the reduction in allocated fixed costs, the avoidable costs are greater than revenues, the program should be dropped
Confirm accounts receivable ending balances and sales terms, such as right of return and consignment arrangements.-- Existence and accuracy
What is an Accounts Receivable Confirmation?
When an auditor is examining the accounting records of a client company, a primary technique for verifying the existence of accounts receivable is to confirm them with the company's customers. The auditor does so with an accounts receivable confirmation
What does it mean to confirm account?
Account verification is the process of verifying that a new or existing account is owned and operated by a specified real individual or organization. A number of websites, for example social media websites, offer account verification services.
Learn more about Confirm account receivable:
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Answer:
There are many different price adjustment strategies which can be implemented in the current market.
Explanation:
Psychological pricing:
Psychological pricing is a strategy in which the price of a product is displayed with mostly one cent difference so the whole number shown is less by $1 and this difference can get higher if the price of the product is more.
Example 1: The price for a toy in a toy shop is $4.99, if rounded this will be $5 but the whole number visible is $4.
Example 2: The price of a laptop is $193, this again is nearly $200 but the price is reduced by $7 in order to influence their customers into buying the product.
Example 3: The price of a car is $35,995, this again is about $36,000 but the buyer may be influenced by this technique and result in purchasing the product with such price.
Geographical Pricing:
Geographical pricing is a strategy where different prices are charged in different outlets, this strategy is made keeping in mind the purchasing power of the locality, if the local people can pay higher price for a product then the price is high there but same product may have a lower price in an area where people can not pay high price.
Example 1: Price of a T-shirt is $15 in a posh area while the price of the same T-shirt is $5 in an area with poor locality.
Example 2: Price of a hair brush is $10 in a poor area while the same brush is available in a posh area at a rate of $35.
Example 3: Price for a food item is $6 in a restaurant in posh area while the same burger is available for $3 in a restaurant in a poor area.