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Anton [14]
2 years ago
11

Flower Company manufactures and sells a single product that has a positive contribution margin. If the selling price and variabl

e costs both decrease by 5% and fixed costs do not change, then what would be the effect on the contribution margin per unit and the contribution margin ratio?
Business
1 answer:
alex41 [277]2 years ago
6 0

Answer:

a. Contribution margin per unit will fall

b. Contribution margin ratio will remain the same.

Explanation:

To show this let us assume that we have:

Selling price per unit = $100

Variable cost per unit = $60

Therefore,

Contribution margin per unit = $40

Contribution margin ratio = $40 / $100 = 0.40, or 40%

If the selling price and variable costs both decrease by 5% and fixed costs do not change, we have:

Selling price per unit = $100 * 95% = $95

Variable cost per unit = $60 * 95% = $57

Contribution margin per unit = $95 - $57 = $38

Contribution margin ratio = $38 / $95 = 0.40, or 40%

From the above, contribution margin per unit fall from $40 to $38, while contribution margin ratio will remain the same at 40%.

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Mega Corporation repurchased 1,000 shares of its $1 par value common stock for $8,000. The effect of this transaction on the acc
Anastasy [175]

Answer:

Decrease in assets

Decrease in stockholder’s equity

6 0
2 years ago
Which of the following statements is NOT true of economic order quantity (EOQ)? Group of answer choices The optimal order size i
Rasek [7]

The option that isn't true of economic order quantity is C. The EOQ ignores inventory reorder costs and inventory carrying costs.

<h3>What is economic order quantity?</h3>

It should be noted that economic order quantity means an inventory technique that is used to make effective and efficient decisions.

In this case, the option that isn't true of economic order quantity is that the EOQ ignores inventory reorder costs and inventory carrying costs.

Learn more about economic order on:

brainly.com/question/26814787

#SPJ1

8 0
2 years ago
A house sold for $950,000 with a sales commission rate of 7.5%. The listing brokerage received 50% of the total commission and t
aleksandrvk [35]

Answer:$14,250

Explanation:

The total commission recieved is

950,000 x 7.5% = $71,250

The listing brokerage and the selling brokerage both received 50% of that sum which is

71,250/2 = $35,625

The Sales person gets 40% of the Selling brokerage's cut which would be

35,625 x 40% = $14,250

8 0
3 years ago
If amazon had decided to design and manufacture the kindle and all its components in the united states, what do you think the co
Scrat [10]

Answer:

Brief summary of the case:

The case deals about the evolution of kindle by Company A. When the company decided to introduce kindle, its price was $399 in 2007. Company A understood that to be successful against the huge competitors, kindle must be priced low. It must be highly reliable, many features and elegance must be provided in the design of kindle. "Company A- designed kindle in State C where the research and development expertise is available.

Market research firm "IS," estimated that the manufacturing cost of kindle is about $185. The expensive components of the kindle are the display used in the Electronic ink technology and wireless cord. Company A contracted with Country C's company to produce the display. A manufacturer in Continent A produced a wireless cord of $13. Many components were contracted to the different countries to reduce the cost of the kindle to be competitive. Now, kindle became the competitor to the massive companies.

Determine if the company has decided to manufacture all the components of Electronic reader K in Country U:

If Company had decided to manufacture all the components in Country U, then it would have been more expensive. Company A cannot sell that at an affordable price. Increase in the cost of the components would increase the overall cost of the Electronic reader K. The most important strategy of Company A is to minimize the cost of the product to increase the number of sales.

Increase in the manufacturing cost will dilute their competitive advantage and it increases the cost of the product. It will lower the sales and the buyers would prefer to use the competitors' products, which are cheaper.

Determine if the company has decided to manufacture all the components of Tablet F in Country U:

It would be expensive if they decide to manufacture the components in Country U. It will not affect the sales number like Electronic reader K. as Tablet F is multipurpose. People will prefer quality and specifications than price.

Conclusion:

Manufacturing in Country U would be expensive and it increases the overall cost of the product. It would affect sales of the products.

3 0
3 years ago
Circumstances) People, constraints, and consumption are some of the key factors that will impact on your critical thinking and s
zimovet [89]

Answer:

True

Explanation:

Critical thinking is the thinking that deals in analyzing the facts so that the judgment could be created. It involves various things like rationality, non-biased, proof-based on facts provided, etc

Here the factors that directly impact the critical thinking are people, constraints and the consumption this results in shaping your goals and objectives you made

hence, the given statement is true

8 0
2 years ago
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