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siniylev [52]
3 years ago
7

Firm A employs a high degree of operating leverage; Firm B takes a more conservative approach. Which of the following comparativ

e statements about firms A and B is true?
A. Firm B has a lower break-even point than Firm A, but Firm A's profit grows faster after the breakeven.
B. Firm A has a lower break-even point than Firm B, but Firm A's profit grows faster after the breakeven.
C. Firm A has a higher break-even point than Firm B, but Firm A's profit grows slower after the breakeven.
D. Firm B has a lower break-even point than Firm A, and profit grows the same rate for both companies after the break-even point
Business
1 answer:
Aneli [31]3 years ago
4 0

Answer:

Statement B is correct.

Explanation:

High Operating Leverage represents higher fixed cost in comparison to variable cost, and thus that means the company will get its break even earlier or we can say with low units, but after break even profits will be higher.

As in the given case Firm A has higher Operating Leverage than Firm B, thus Firm A has lower Break even point but eventually its profit after reaching break even will grow higher.

Thus, Statement B is correct

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Mountain Dental Services is a specialized dental practice whose only service is filling cavities. Mountain has recorded the foll
Ivenika [448]

Answer:

Instructions are listed below

Explanation:

Giving the following information:

The high-low method involves taking the highest level of activity and the lowest level of activity and comparing the total costs at each level.

Mountain has recorded the following for the past nine months:

January:

Number of Cavities= 375

Total cost= $5,300

February:

Number of Cavities  500

TC= 5,850

March

Number of Cavities 350

TC= 5,200

April

Number of Cavities 600

TC=6,250

May

Number of Cavities 325

TC= 5,150

June

Number of Cavities 475

TC= 5,700

July

Number of Cavities 525

TC= 6,100

August

Number of Cavities  575

TC= 6,300

September

Number of Cavities  450

TC= 5,550

A) Variable cost= (Highest activity cost - lowest activity cost) / (Highest activity units - lowest activity units)

Variable cost= (6300 - 5150) / (600 - 325)= 4.18 per unit

Fixed cost= HACost - (variable cost per unit * HAUnits)= 6300 - (4.18*600)= 3792

Fixed cost= LACost - (variable cost per unit* LAUnits)= 5150 - (4.18*325)= 3792

B)  Q= 400

Total cost= 3792 + 4.18*400= $5464

8 0
3 years ago
2. Below are mixed SWOT factors of KFC case study. Fill the chart to Identify each SWOT factor. (2points each)
Ludmilka [50]

Answer:

Strengths :

1. With over 15,000 establishments in 120 countries, KFC is an internationally recognized venue.

2. Alongside KFC, Taco Bell and Pizza Hut also share the same corporate owner brands. Brands have the influence, power, and resources to improve KFC as a restaurant.

3.  KFC became popular thanks to its good chicken

Weaknesses :

                                                             

1. Serving high-fat foods; considering how health-conscious the public is these days, greasy chicken is not going to cut it anymore.

2. KFC follows a franchise management system, meaning each one is individually managed. It is not uncommon for one KFC to have high reviews while another, just down the street, is collecting bad press.

Opportunities :

1. By maintaining the same price point with new menu options, KFC is positioned to enter a new market without sacrificing the beloved chicken-focused meals

2.      KFC is in the prime spot to dive into the vegetarian market. Adding new vegetarian options will improve the relationship between KFC and health-conscious and vegetarian consumers

3. Introduce new products fish and deals menu that will attract more customers.

Threats :

1. Increasing numbers of competitors.

2. Raw material prices are rising.

3 0
2 years ago
Dot miller owns a small chain of dive shops. she is interested in knowing how many potential customers she will need to sample i
uranmaximum [27]
Standard deviation is an amount of the dispersion of a group of data from its mean. It is computed as the square root of variance by distinguishing the variation amid each data point relative to the mean. If the data points are distant from the mean, there is greater deviation within the data set. But since not all are given in this problem Dot can use some previous knowledge about the population, undertake a pilot study or approximation the range (7), and divide by 6.
7 0
3 years ago
This year Luke has calculated his gross tax liability at $2,120. Luke is entitled to a $2,880 non-refundable personal tax credit
Tema [17]

Answer:

$3,460

Explanation:

Gross tax liability $2,120

Less non-refundable personal tax credit $2,880

Refundable personal tax credit $760

Hence:

Income taxes withheld $2,700+ $760

=$3,460

Luke’s non refundable personal credit reduces his gross tax to zero ($2120– 2,880) and $760of the unused credit expires unused.

The $1,740 unused business tax credit carries over and Luke receives a refund of $3,460($760 refundable credit + $2,700 taxes he paid)

Luke’s net tax due or refund is $3,460

3 0
3 years ago
In its first month of operations, Cheyenne Corp. made three purchases of merchandise in the following sequence: (1) 185 units at
Dimas [21]

Answer:

a.  $1,375

b. $1,240

Explanation:

FIFO method

FIFO assumes that the inventory to arrive first will be sold first. Inventory values depend on  earlier purchases

Inventory =  185 x $5 + 75 x $6

                = $1,375

LIFO method

LIFO assumes that the inventory to arrive last will be sold first. Inventory values depend on recent purchases

Inventory =  130 x $7 + 55 x $6

                = $1,240

7 0
3 years ago
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