Answer:
either using its low-cost edge to underprice competitors and attract price sensitive buyers in large enough numbers to increase total profits or refraining from price-cutting and using the low-cost advantage to earn a bigger profit margin on each unit sold.
Explanation:
Competitive advantage is the edge that a firm has over others in the same industry that results in higher profit margins for them.
One of the importance competitive advantages is price advantage.
This results from the firm being a low cost leader. Their cost of production is low enough for them to attract customers that are price sensitive leading to increased profits.
Also they can underprice their competitors or earn profit margins on the reduced cost of production per unit
Answer:
$29,850
Explanation:
The computation of the increase in net operating income is shown below:
= Increase in sales - increase in variable expenses - advertising cost
where,
Increase in sales = $89,000
Increase in variable expenses is
= $89,000 × 35%
= $31,150
And, the advertising cost is $28,000
So, the increase in operating income is
= $89,000 - $31,150 - $28,000
= $29,850
Answer:
C. $125,550
Explanation:
Given that
At beginning = 7200unit at $12 each
During = 3000unit at $13
= 12000 unit at $13.50
Sold = 12900 unit.
Therefore, USING FIFO
Unit sold
= (7200 × 12) + (3000 × 13) + (2700 × 13.50)
= 86400 + 39000 + 36450
= $161850.
Thus, inventory remaining
= (12000 - 2700) × 13.50
= 9300 × 13.50
= $ 125,550
Ending inventory = $125,550
Answer:
Net cash flow from investing activities is $47.2 million -$58.6 million =-11.4 million.
Explanation:
Draft Cashflow Statement.
Operating Activities; $0.0 million
Investing Activties;
Cash Inflows;
Sales of ; investment $32.0 million,plus sales of Land $15.2 million =$47.2 million.
Cash outflows; Purchase of ; treasury stock -$21.2, plus equipment -$25.2 million, plus patent -$12.2 million =-$58.6 million
Net cash flow from investing activities is $47.2 million less $58.6 million=-11.4 million.
Financing Activities;
Issues of common stock $40.4
Note that sales of own common stock is a financing activity
Answer:
The answer is A
Explanation:
To start with;
Contribution margin per unit = selling price($29) - variable cost($21)
$29 - $21
= $8 per book...
So break even sales =fixed cost(expense) / contribution margin.
Break even sales is 44,000 units and contribution margin is $8.
Therefore, fixed cost or expenses=
Break even sales x contribution margin
44,000 x $8
=$352,000
