Answer:
a) Accumulating and then assigning costs
Explanation:
A cost system is a system put in place by management to monitor costs incurred by an entity or cost object. A cost system is a combination of related subsystems which monitors, control and report costs information. In determining the cost of an object a cost system accumulates costs before assigning to cost units.
Disclaimer- The complete question is
Wilson hires a financial analyst to analyze costs and profits for his cereal production business. The analyst determines that Wilson's eventual profit function is given as pi = 2x ^ 4 - 4x ^ 3 + 7 where x is the number of bags of cereal produced. At what point or number of bags of cereal will Wilson's profit start decreasing?
If the company produces only one 1 bag then the profit of Wilson starts decreasing.
Let f ( x ) = 2x^4 − 4x^3 + 7
f ′ ( x ) = 8x^3 − 12x^2
For decreasing, f ′( x ) ≤ 0
⇒ 4x^2 ( 2x−3 ) ≤ 0
⇒ 2x−3 ≤ 0 ( a s x^2 ≥ 0)
⇒ x ≤ 3/2
Since, x is number of bags
So, x ∈ N
∴ x = 1 is only possibility
Thus, If the company produces only one 1 bag then the profit of Wilson starts decreasing.
Financial analysis is the process of evaluating a company's performance using financial data and making suggestions for future improvement. The majority of the work done by financial analysts is done in Excel, where they use a spreadsheet to examine past data and predict how the company will perform in the future.
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Answer:
C. Stay Open because Shutting Down would be More Expensive
Explanation:
Although it is quite obvious that in the short-run the business is not breaking even, based on the available options, staying open will be the best current course of action. Staying open and seeing if the trend of things change in coming fiscal years or financial periods will be better than shutting down.
Shutting down takes alot of processes that are quite expensive. Some of the processes include
- The Decision to Close
- File dissolution documents
- Cancel registrations, permits, licenses, and business names
- Comply with employment and labor laws
- Resolve financial obligations
- Maintain adequate records
These processes are expensive and since the business does not know what is causing the inability to cover its entire costs, it should investigate and find ways of increasing its total revenue to cover its entire costs before deciding to shut down completely.
a. Shut Down- Shutting Down is More Expensive
b. Exit the Industry- There isn't enough information to know exactly why the business is not making a profit
