Answer:
Fixed costs, sales price, and variable cost per unit
Explanation:
Cost-volume-profit (CVP) analysis is a cost accounting technique that examines how operating profit is affected by varying levels of costs and volume. Another name for CVP is break-even analysis because for different sales volumes and cost structures, it provides the break-even point (BEP) for different sales volumes and cost structures. BEP can assist managers during the short-term economic decision making.
Some of the assumptions of CVP are that fixed costs, sales price, and variable cost per unit will not change even when the volume of a product changes. The change in the volume of a product can either be an increase or a decrease.
Therefore, according to the assumptions of CVP, fixed costs, sales price, and variable cost per unit will not change as the volume of a product increases or decreases.
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Answer:
D. Shoes Cult has a competitive advantage over Aros.
Explanation:
Competitive advantage is defined as the advantage an entity has when they are able to produce a good at cost that is lower than the cost incurred by other parties in the same industry. This results in higher profit margins for businesses that have low production cost.
In this scenario Aros produces shoes for $20 while Shoes Cult produces the same shoes for $22. They both have the same price ceiling of $30.
Aros has competitive advantage over Shoes Cult because they produce at a lower cost and make more profit than Shoes Cult.
Assume they both sell at the maximum price. Profit for Aros= 30- 20=$10
Profit for Shoes Cult= 30-22= $8
Answer:
Debit Accounts receivable 7,200
Credit Sales 7,200
Debit Cost of Merchandise Sold 3,950
Credit Merchandise Inventory 3,950
Explanation:
When Corbit corps sells merchandise on account it means that cash was not received for the transaction. So we debit accounts receivable (an asset account to indicate increase in amount receivable by us). A credit is now passed to sales to show increased sales.
On merchandise we debit cost of merchandise sold and credit Merchandise inventory (an asset account is credited to indicate reduction) to indicate merchandise has reduced.
Answer:
Cash flows from financing activities = -$12600
Explanation:
Before we determine this company's cash flows from financing activities we should understand what components or cash flows are and/or can be associated with financing activities of a business. Cash flows from financing activities include all those cash flows that are received/paid in financing/funding the entity's operations. All those cash flows that are related to raising funds/finance for the business which normally include cash from issuance of equity/debt/, settlement of mature instruments etc.
So in the question the cash flows that relate to financing activities are as follows;
<em>issued common stock =$64000</em>
<em>paid cash dividend = $14600</em>
<em>settlement of note payable = $50000</em>
<em>payment to acquire treasury stock = $12000</em>
<em />
Cash flows from financing activities = $64000 -$14600 -$50000 -$12000
Cash flows from financing activities = -$12600
In this situation, the company is facing negative cash flows as company has received lower cash from financing and has paid/settled greater amounts.
<em>Note: purchasing of equipment is a cash outflow from investing activities and net income generated is a cash inflow from operating activities.</em>
