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ahrayia [7]
3 years ago
15

Tasty Tangerine is currently selling 50,000 boxes for $25 per box. Variable cost per box is $17 and fixed costs total $260,000.

A plan is being considered to increase advertising and reduce the selling price. The advertising would increase fixed costs by $60,000. Management believes the advertising along with a $2 reduction in the selling price per box will increase sales volume by 24,000 boxes. If management's predictions are correct, making these changes will cause net income for the year to ______. increase by $132,000 increase by $44,000 decrease by $104,000 decrease by $16,000
Business
1 answer:
Charra [1.4K]3 years ago
5 0

Answer:

decrease by $16,000

Explanation:

We know that,

The net income = Sales - variable cost - fixed expense

The sales = Sales units × selling price per unit

                = 50,000 boxes × $25

                =  $1,250,000

The variable cost = Sales units × variable cost per unit

                             = 50,000 boxes × $17

                             =  $850,000

And, the fixed cost is  $260,000

So, the net income would equal to

= $1,250,000 - $850,000 -  $260,000

= $140,000

Since, the sales units are increased by $24,000 units, so new sales units is 74,000 units

And, the sales per unit is decreased by 2 So, new sales per unit is $23

So, the new sales

= Sales units × selling price per unit

= $74,000 × $23 = $1,702,000

The variable cost = Sales units × variable cost per unit

So, the new variable cost equals to

= 74,000 units × $17

= $1,258,000

And the fixed expense would increased by the $60,000 so new fixed cost is $320,000

So, the new net income would be equal to

= $1,702,000 - $1,258,000  - 320,000

= $124,000

If we compare these two net income, then the difference would be

=  $140,000 -  $124,000

= $16,000 decrease

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In the context of the industrial and service industries, the Just in Time (JIT) system: Companies use just-in-time (JIT) inventory strategies to boost productivity and cut waste by only ordering products when they are actually needed for manufacturing, which lowers inventory expenses.

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4 0
2 years ago
Diamond Company has three product lines, A, B, and C. The following financial information is available:
const2013 [10]

Answer:

e. Increase by $4,500.

Explanation:

<u>Analysis of the effect of discontinuing Product Line C</u>

Income :

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Savings : Fixed Costs - Avoidable                 $3,000

Total Income                                                   $9,000

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Opportunity Cost - Contribution Margin       $4,500

Total Costs                                                      $4,500

Net Income (Loss)                                           $4,500

therefore,

By discontinuing Product Line C, operating income for the company will likely  Increase by $4,500

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Mr. Smith decides to feed his pet Doberman pinscher a combination of two dog foods. Each can of brand A contains units of​ prote
m_a_m_a [10]

Answer:

hello your question is incomplete below is the complete question

Mr. Smith decides to feed his pet Doberman pinscher a combination of two dog foods. Each can of brand A contains 3 units of protein, 1 unit of carbohydrates, and 2 units of fat and costs 80 cents. Each can of brand B contains 1 unit of protein, 1 unit of carbohydrates, and 6 units of fat and costs 50 cents. Mr. Smith feels that each day his dog should have at least 6 units of protein, 4 units of carbohydrates, and 12 units of fat. How many cans of each dog food should he give to his dog each day to provide the minimum requirements at the least cost? *Mr. Smith should give his dog ___ can(s) of brand A and ___ can(s) of brand B

<em>answer</em> : 1.5 cans of brand A and 1.5 cans of brand B

Explanation:

<u>Food A contains </u>:

3 units of protein , 1 unit of carbohydrates, 2 units of fat

cost of food A = 80 cents

<u>Food B contains :</u>

1 unit of protein , 1 unit of carbohydrates, 6 units of fat

cost of food B = 50 cents

<u>minimum ingredients required in the dog food daily </u>

6 units of protein , 4 units of carbohydrates, 12 units of fat

<em />

<em>In order to achieve the minimum/least cost of 195 cent. Mr. smith should give his dog 1.5 cans of Brand A and 1.5 can of brand B</em>

attached below is the detailed solution

7 0
3 years ago
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Answer:

Both increases

Explanation:

Suppose a person initially produces and sell some amount of milkshakes with the available resources.

But, if he will be able to produce and sell more quantity of milkshakes with the same level of resources then this will indicates that there is a rise in the productivity of this person and if the number of milkshakes sold increases then as a result profits increases at a same price level.

For Example:

Case 1:

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Case 2:

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Person producing and selling = 40 units of milkshakes at a selling price of $10 each and cost of inputs used in the production = $50

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Hence, there is an increase in the profits from $150 to $350.

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Hey there,

Personally, I think that this would be True, because being registered would be highly important for corporations.

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