Answer:
Pam and Lenny's Ice Cream Shop
a. The effect of the promotion on operating income for the second week of February is an increase by $350.
b. The promotion should occur. The shop will make additional operating income of $350 within the second week. And there will be spillover positive effects during the coming weeks after the promotion.
Explanation:
a) Data and Calculations:
Selling price per cone of ice cream = $1.60
Variable expenses = $0.35
Contribution = $1.25
Fixed costs per month = $2,200
Additional sales from the promotion = 650 cones
Revenue from additional sales = $1,040.00 ($1.60 * 650)
Variable cost 227.50 ($0.35 * 650)
Cost of promotions:
Giveaways 297.50 ($0.35 * 850)
Advertising costs 165.00
Total costs $690.00
Additional income $350.00
Answer:I’m figuring this question out for you. one moment
Explanation:
It is true that because of the substitution problem, the CPI tends to overstate the true change in the price of the typical basket of consumer goods.
<h3>What is CPI?</h3>
- A consumer price index measures a market basket of goods and services that households have purchased at a weighted average price.
- The measured CPI fluctuates to reflect changes in prices over time.
- One of the most popular methods for determining inflation and deflation is the CPI.
- An essential gauge of an economy's health is inflation. The CPI and other indexes are used by governments and central banks when making economic decisions.
- The decision to raise or cut interest rates is crucial among these.
- If the CPI increases, it indicates that the average rate of change in price over time has increased. The cost of living and income are eventually changed as a result of this.
Learn more about CPI here:
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Answer:
Denver Company
Income Tax Expense for the second quarter:
Pre-tax quarter income = $140,000
Estimated tax rate = 24%
Tax Expense = $140,000 x 24%
= $33,600
Explanation:
a) Data:
Quarter income before tax estimated tax rate
first $100k 30%
second $140k 24%
b) Denver's quarter second income tax expense is the product of the pretax income for the second quarter and the estimated income tax rate for the quarter. The resulting calculation shows the estimated income tax expense that has to be settled by Denver. If it is not settled in the quarter second period, it has to be carried forward to the next quarter as a liability under the heading, Income Tax Payable.
Answer:
C) Specialty product
Explanation:
Specialty products are products that customers actively seek to buy because:
- the products possess unique or outstanding characteristics (e.g. luxury goods or sports cars).
- brand loyalty: loyalists have a strong preference for certain products and they will go out of their way to visit a store just to buy that product.
Consumers who purchase specialty products know what type of product they want and don't mind to spend time searching for that product.