Which of the following is the correct term to
2 answers:
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Answer:
b) razors to increase.
Explanation:
The announcement by the American Medical Association will cause an increase in demand for razors since the perception will be men that shave their hair are less likely to die of heart attack.
There will be a shift in demand to the right, resulting in increase in demand at all prices.
A shift in demand occurs when other factors except for price causes a change in demand of a good.
The shift in demand is illustrated in the attached diagram.
Answer:
Gross profit percentage = Gross profit / Net sales
= (Net sales - COGS) / Net sales
= (250,000 - 150,000) / 250,000
= 40%
Return on sales ratio = EBIT / Net sales
= (Gross profit + other income - Administrative expenses - Other expense - Selling expenses) / Net sales
= (250,000 - 150,000 + 15,000 - 10,000 - 10,000 - 50,000) / 250,000
= 18%
<u>With new product:</u>
Gross profit percentage = Gross profit / Net sales
= (Net sales - COGS) / Net sales
= (250,000 + 45,000 - 150,000 - 38,000) / (250,000 + 45,000)
= 36.3%
Return on sales ratio = EBIT / Net sales
= (Gross profit + other income - Administrative expenses - Other expense - Selling expenses) / Net sales
= (250,000 + 45,000 - 150,000 - 38,000 + 15,000 - 10,000 - 10,000 - 50,000) / (250,000 + 45,000)
= 52,000 / 295,000
= 17.6%
