Answer:
Decrease by $250,000
Explanation:
Calculation for what would be the effect on net income.
We would be using Differential Analysis method to find the effect on the net income
Differential Analysis
Continue with Luggage Department; Eliminate Luggage Department; Effect on Income
Sales
1,000,000 0 -1,000,000
Variable cost
-250,000 0 250,000
Direct fixed costs
-500,000 0 500,000
Indirect fixed costs
-300,000 -300,000 0
Net Income
-$50,000 -$300,000 -$250,000
Therefore in a situation where the luggage department is eliminated, the income would decrease by $250,000
The method of developing a market communication budget that
establishes a ratio of advertising dollars to sales or market share then
reduces the percentage as sales build and the product obtains market share is
called the payout planning. Payout planning is being defined as a way of fixing
the budget on communications in which is based on the revenues that are
expected to be obtained in the future. This likely considers more on
communication than of the expense.
Answer:
<u>c. The post-pandemic inflation rate</u>
Explanation:
Remember, most organization's main goal is to make revenue. Thus, among the things that should be put into consideration when an organization is planning for pandemics is how the post-pandemic inflation rate will affect it's revenue.
This is very important because usually, prices of commodities or supplies increase rapidly.