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4 years ago

The CEO of the company you are interning for states that her number one goal for the year is to maximize the company’s profit.

Business

1 answer:

Zanzabum4 years ago

6 0

Answer:

Explanation:

Profit maximization objective can easily be manipulated and it is highly subjective. Management may decide to avoid some costs in the short-term such as Investment in Assets, Investment in R &D and other discretionary cost in order to have an impressive profit performance. In the long-run, the avoidance of this cost now may reduce the earnings capacity of the company assets.

Using profit as measure of performance for manager may encourages dysfunctional behavior.

In the true sense, profit generation may not translate into increase in the value of the company . For example, management may decide to reduce depreciation charge, decide to over state revenue or over valued inventory

On other hand, maximizing shareholder value is a long-term and sustainable objective that involved investing in viable projects with positive net present value to enhance the value of the company.

When this is used as a performance measure , it very difficult to manipulate in the short-term.

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EA17.

exis [7]

Answer:

$500 (Favorable)

Explanation:

Given that,

Production cost = $7 per unit

Fixed costs = $23,000 per month

Units produced = 5,500

Actual total costs = $61,000

Standard cost = Fixed cost + Variable cost

= $23,000 + ($7 × 5,500)

= $23,000 + $38,500

= $61,500

Variance = Standard cost - Actual total costs

= $61,500 - $61,000

= $500 (Favorable)

5 0

4 years ago

There are many food carts near Mark’s university. Mark and his friends regularly buy hot dogs from Jeff’s cart. Recently, Andrea

Lubov Fominskaja [6]

Jeff’s hot dog cart will have less customers and he will get less sales

5 0

3 years ago

In the sand-casting production line, the automated mold-making machine costs $120/hr and is tended by hourly personnel at a rate

anzhelika [568]

Answer:

Sand-Casting Production Line:

The total hourly cost to operate the line is:

= $2,339.

Explanation:

a) Data and Calculations:

Costs of automated mold-making machine per hour = $120

Cost of personnel tending the mold-making machine = 45

Cost of mold-making machine = 600

Average cost of mold sand per mold = $0.12 * 2,500 = 300

Cost of energy to heat the molten metal for pouring = $0.06 * 164 10

Cost rate of the pouring line, including heating crucibles = 33

Cost of three workers who operate the pouring line = 60

Cost of buffer storage system used for cooling the castings = 40

Cost of break-away area workers = 38

Cost of casting metal = $1.55/kg * 4.3 * 164 = 1,093

Total hourly cost to operate the line = $2,339

7 0

3 years ago

You are given the following information: sales, $260; expenses other than depreciation, $140; depreciation expense, $50; margina

masha68 [24]

Answer:

See below

Explanation:

1. The net cash after-tax cash flow effect of the preceding information of using the indirect method.

First, we need to calculate the pretax income.

Pretax income = Sales - Expenses other than depreciation - depreciation expense

Pretax income = $260 - $140 - $50 = $70

Also,

Tax expense = 35% × pretax income $70 = $24.5

Therefore, the indirect method would be;

Pretax income

$70

Less:

Tax expense

($24.5)

After tax income

$45.5

Add:

Depreciation expense

$50

After-tax cash flow

$95.5

Direct method

After tax cash operating income

[($260 - $140 - $50) × (1 - tax rate 35%)]

$45.5

Add :

Depreciation expense

$50

After tax cash flow

$95.5

5 0

3 years ago

Please help! Marketing involves actions to build and maintain

Dmitriy789 [7]

Answer:

exchange relationships

Explanation:

Marketing involves actions to build and maintain exchange relationships. These are any and all relationships in which an individual is given something while expecting to receive something back in return such as a benefit, service, product, etc. This is what companies try to achieve with marketing. They try to get their product/services in from of as many people as possible, if these individuals like the product/service they will pay the company money in exchange for the product or service. If they end up liking the product or service they continue to purchase it in the future, therefore, the company builds an exchange relationship with these customers.

6 0

3 years ago