Answer:
The answers are:
- A change in sales mix from high-margin to low-margin items may cause total profits to decrease despite an increase in total sales.
- A change in sales mix from low-margin to high-margin items may cause total profits to increase despite a decrease in total sales.
Explanation:
A company's profit is affected by its sales mix. Profits will always be higher if high margin products or services make up a large proportion of the sales mix. Even if total sales decrease, due to a decrease in the sales of low margin products, the company's profits might increase if more high margin products are sold.
For example, a Ford sells mostly pick up trucks, SUVs and cars. The profit margin from car sales is very low, so in order to make a larger profit the company must focus on selling more pick up trucks and SUVs. Even if the company losses market share by not selling cars, it will make more money by selling high margin products.
<span>A benefit of this approach is that emission taxes would shift a part of revenue generation from consumption to production.</span>
Answer:
B. Monthly ordering cost is greater than monthly holding cost
Explanation:
B is correct because monthly ordering cost for 15 orders ( quantity / order size) will be 15x20 =300 Which is higher than the holding cost = 100x1 =100
Answer:
Current market price is $12
Explanation:
Total cost of production of 40 units output is 40×$6=$240
Profit=Total sales - total cost
Total sales= profit+total cost= $240+$240= $480
Market price=$480/40=$12
