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icang [17]
3 years ago
10

Auto Parts, Inc. is medium-sized company that manufactures auto parts in Buffalo, New York. The company currently loses $40,000

per month. The owner of the company is evaluating whether she should shut down the factory. She thinks that the factory should continue to operate until the economic environment improves and buyer for the factory can be identified. The logic of the owner is that her company has already invested millions of dollars in the factory over the years. The monthly fixed costs for the factory are $30,000. The CEO of Auto Parts, Inc. thinks the factory should be shut down because most the monthly fixed costs ($30,000/month) are sunk costs.
Do you agree with the owner or the CEO?
Business
1 answer:
Firlakuza [10]3 years ago
7 0

Answer:

I agree with the owner of the company

Explanation:

The overall losses are $40,000 per month and the fixed costs are $30,000 per month.

The company should stop production because the losses are over fixed cost and this tells us that the company is not even able to recover the variable costs and because the variable costs are not at least recovered, there would be no point for the company to continue in the business as it would keep on making a loss and the logic might be wrong regarding sunk costs but the decision must be taken in favour where production should be stopped.

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Answer:

The correct answer is letter "C": The owners' equity that has accumulated as a result of profitable operations.

Explanation:

Retained Earnings are the part of the company's net profits it does not pay out as dividends to shareholders. The company retains the money and reinvests it in the company, or uses it to pay off a part of its debt. To see how much profits a corporation has kept, look under the Shareholder's equity in the Balance Sheet.

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Answer:

Cooperation

Explanation:

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Pick the correct statement related to pro forma statements from below. Multiple Choice Fixed assets must increase if sales are p
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Answer:

The correct statement related to the pro forma statements is:

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<h3>What are employee census data?</h3>

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<h3>What is the purpose of process capability analysis?</h3>

To determine how well a certain process complies with a set of specification restrictions, a set of techniques called process capability analysis is utilized. In other words, it assesses the effectiveness of a procedure.

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