1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
saveliy_v [14]
3 years ago
5

Why net profit will be higher if increases average prices to customers?​

Business
1 answer:
vampirchik [111]3 years ago
6 0

Answer:

Higher prices with same sales quantity will mean greater profit.

Explanation:

Let's hold some variables constant. If a business sells books, and they take the prices up, if they sell the same quantity (at higher prices) this would increase revenues. Higher revenues, less the same cost structure (variable and fixed costs) will lead to a greater profit generation. Of course in the real world, price elasticity of demand comes in play when prices are changed. If prices go up, typically sales quantity will decrease and there may be a net effect in revenue and hence profit. In the simple case where prices go up and sales quantity is unaffected, net profit will rise.

You might be interested in
On January 1, Year 1, Raven Limo Service, Inc. paid $64,000 cash to purchase a limousine. The limo was expected to have a six ye
MAXImum [283]

Assuming Raven uses straight-line depreciation, the Company would recognize a $2,000 gain.

<h3>What is straight-line depreciation?</h3>

The simplest way to determine depreciation over time is through straight-line depreciation. According to this strategy, an asset's value is reduced by the same amount for each year that it is in use.

<h3>Depreciation formula:</h3>

(Depreciation expense per year = (Cost of the asset - Salvage value) ÷ Useful life.

The given data is -

The cost of asses is given as $64,000.

The salvage value is given as $10,000.

The sole price is $30,000.

Calculation for the depreciation-

Depreciation expense per year = ($64,000 Cost - $10,000 Salvage) ÷ (6               Year life)

Depreciation expense per year = $9,000

Accumulated depreciation on January 1, Year 5 = ($9,000 per year) × (4 years)

Accumulated depreciation on January 1, Year 5 = $36,000.

Book value = $64,000 Cost - $36,000 Accumulated depreciation

                    = $28,000

Gain on sale = $30,000 Sales price - $28,000 Book value

                     = $2,000)

Therefore, the gain on the scale is  $2,000.

To know more about calculation for annual depreciation using the straight-line depreciation method, here

brainly.com/question/27971176

#SPJ4

4 0
2 years ago
Pie Co. uses the installment sales method to recognize revenue. Customers pay the installment notes in 24 equal monthly amounts,
Nataliya [291]

Answer:

C. The present value of the remaining monthly payments discounted at 12%.

Explanation:

To answer the question I have used following values to workout

Original Sales Value = 500,000

Interest rate  = 12%

Numbers of periods = 24

First I calculate the Equal annual installment payment by using following excel formula

=PMT(rate,nper,pv,[fv],[type])

Where

PMT = Equal Annual Payment

rate = Interst rate = 12%/12 = 1%

nper = Tota numbers of payment = 24 payments

pv = oroginal sales value = 500,000

FV = Value outstanding after 24 payments = 0

Type = The payment made at the start or end of the year ( 0 for the payment made at the end of the period and 1 for the payment made at the beginning of the period ) = 0

placing values in the formula

=PMT(1%,24,50,000,0,0)

= $23,536.74  

Now use these values to make the schedule which is attached with this answer.

After six Payment

Outstanding value = 385,961.72  

Original sales price = 500,000

Percentage of outstanding balance to original sales value = 385,961.72 / 500,000 = 0.77 = 77%

The reamining balance is above 75% of the original sales price.

Note:

A payment schedule is attached for reference

Download pdf
3 0
3 years ago
Whispering Company sells goods that cost $301,000 to Ricard Company for $402,000 on January 2, 2020. The sales price includes an
Jobisdone [24]

Answer:

The amount of revenue to be recognized at 31st March is $383500

Explanation:

The revenue amount that should be recognized in the income statement as at March 31,2020 is the  sales price of $365000 plus three months of installation fee since installation is expected to last six months and three months have passed since installation began.

Hence, the amount of revenue as at 31st March is calculated thus:

Sales price                                                                     $365000

Installation fee for 3 months(3/6*$37000)                   <u>$18500</u>

Total revenue as at 31st March                                    $ 383,500

The rationale behind this is that revenue is only recognized when the seller has discharged his or her obligation under the contract not when cash is received and it is very clear that installation has been undertaken for 3 out of 6 months

7 0
3 years ago
Which of the following would indicate an improvement in a company's financial position, holding other things constant? a. The in
postnew [5]

Answer:

C (The current and quick ratios both increase.)

Explanation:

3 0
3 years ago
Smith Pharmaceuticals is trying to estimate the breakeven volume of sales on a newly developed drug. Which of the following woul
ahrayia [7]

Answer:

An increase in the unit (per pill) contribution margin.

Explanation:

Breakeven point is defined as the level of sales where total cost is equal to total revenue.

The formula is given as

Breakeven= Fixed cost ÷ (Sales revenue -Variable cost)

Note the Sales revenue less variable cost is the contributing margin.

Breakeven= Fixed cost ÷ Contributing margin

To reduce breakeven we must either reduce the numerator or increase the denominator.

In this case an increase in contributing margin will result in a decrease in breakeven amount of the company.

8 0
3 years ago
Other questions:
  • Of all the types of managers, managers of global social media campaigns are the ones who need not be aware of the cultures of th
    5·1 answer
  • Revenue is recognized in the accounting period in which the performance obligation is satisfied. This statement describes thea)
    14·1 answer
  • Who knows how to fill out the Journal?
    15·2 answers
  • you learned a variety of fundamental economic concepts. Identify two of the following principles, and apply them to the real-wor
    7·1 answer
  • Ngata Corp. issued 18-year bonds 2 years ago at a coupon rate of 9.5 percent. The bonds make semiannual payments. If these bonds
    8·1 answer
  • The Polishing Department of Marigold Company has the following production and manufacturing cost data for September. Materials a
    15·1 answer
  • 1. When consolidating the accounts of a parent and subsidiary in subsequent years, eliminating entry (O) recognizes total write-
    9·1 answer
  • Firms must consider the possible reaction of rivals to their own decisions and actions in
    6·1 answer
  • If each of two competing monopolists undertakes equal advertising efforts to attract consumers away from the other, the total re
    6·1 answer
  • On the morning of July 15, 2006, fourteen school buses were vandalized. The buses, property of Walt Whitman Middle School, were
    6·2 answers
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!