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Gala2k [10]
2 years ago
13

Sheffield Company had sales in 2019 of $1,842,400 on 65,800 units. Variable costs totaled $1,184,400, and fixed costs totaled $4

98,000. A new raw material is available that will decrease the variable costs per unit by 20% (or $3.60). However, to process the new raw material, fixed operating costs will increase by $93,000. Management feels that one-half of the decline in the variable costs per unit should be passed on to customers in the form of a sales price reduction. The marketing department expects that this sales price reduction will result in a 5% increase in the number of units sold. (a) Prepare a projected CVP income statement for 2020, assuming the changes have not been made. SHEFFIELD COMPANY CVP Income Statement Total Per Unit $ $ $ $
Business
1 answer:
vlada-n [284]2 years ago
5 0

Answer:

Assuming that no changes happened, 2020 sales and expenses should be similar to 2019's:

                                       Total                        Per unit

Total sales                   $1,842,400                   $28

Variables costs           <u>($1,184,400)</u>                  <u>($18)</u>

Contribution margin    $658,000                    $10

Fixed costs                 <u>($498,000)</u>                  <u>($7.57)</u>

Operating income       $160,000                    $2.43

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Last year’s sales were $9,815,000 and are projected to increase by 4.5% for next year. Last year’s expenses were 41% of last yea
Nutka1998 [239]

Answer:

t oadvertize there is 1,435,164.80   dollars available.

Explanation:

Sales: 9,815,000 x (1 + 4.5%)  =  10,256,675.00

general expenses are 41% of sales but will decay by 1.5%

10,256,675 x (0.41) x (1 - 0.015) =  4,142,158.20  

Profit will increase by 2%

4,587,600 x (1 + 2%) = 4,679,352

The amount available for advertizing spending is the difference between sales and the cost and profit:

sales - expenses - advertizing = profit

sales - expenses - profit = advertizing

advertizing = 10,256,675.00  - 4,142,158.20    - 4,679,352

advertizing = 1,435,164.80  

7 0
3 years ago
For many years a mainstay of the economy in Seattle, Washington was commercial fishing. Many people not employed in the fishing
Stells [14]

Answer: The above is an example of a basic employment generating nonbasic employment.

Explanation: Basic employment is employment as a result of businesses that operate on a very large scale, and usually these businesses export their products outside the location where they are because they can more than meet the demand of that locality.

As seen in the question above, where fishing is the mainstay of the economy of Seattle. This means the fishing industry in Seattle can meet the demand of Seattle and still have commercial quantities for export.

Non-basic employment often refers to small businesses who offer services to the local customers.

In the case of the question above, the fishing industry has brought about a rise in small businesses, these small businesses will make profit from meeting the needs of the fishermen.

7 0
3 years ago
Becky Knauer recently resigned from her position as controller for Shamalay Automotive, a small, struggling foreign car dealer i
andre [41]

Answer:

1. The ethical issue here is that Becky Knauer's new boss usually bribes the sales manager of a car dealership to get more quota of cars. He is doing this because the car is in high demand. The higher his quota, the higher the number of cars. The higher the number of cars, the more of them he can sell. The more he can sell, the higher the profits.

Here is the dilemma.  

First, the action of Becky's boss is wrong, but it is also helping to keep the business afloat thus translating to securing her job and probably sustaining the pay she is receiving. We know this because Becky's former employer who receives just 25 cars a month is not very profitable.  

Becky as the Controller, however, is in charge of Compliance. The actions of her boss are unethical. She has to flag such issues and report to him.

Franz is the owner of the dealership and is on the top of the 'food chain'. There is no one else within the organisational structure to report the matter to. He is supposed to lead by example. He, as the owner of the organisation, however, is leading with a bad example because other sales personnel know about these shady transactions.

2.  Becky's options are as follows:

A. If she is too scared to confront her boss, she can decide to resign. She would have lost her job. There is no guarantee she will get another and the unethical practices will continue.

B. She can raise the issue with her boss and point out the dangers of continuing in such practice. By doing this, she is ruling out the possibility that he somehow is unaware of the dangers of his actions. In raising the matter with her boss, she must do this in black and white.

The above decision can go either left or right.  

Right means that her boss comes to understand the import of his actions and makes amends. Left means, he gets jittery and fires her.

3. As stated above, Franz may fire Becky if she flags his actions.

If this happens, she can take the matter to the State of New Jersy Motor Commission and possibly sue Franz for wrongful dismissal.      

Cheers!

3 0
3 years ago
When Frozen DeLites Ice Cream moved from its longtime storefront to a famous resort area, it took a big risk. However, the owner
bearhunter [10]

Marketers professionals refer to the strategy of collecting customer names and email addresses and maintaining a presence on social media sites to send messages about promotions and coupons to valued customers like relationship marketing.

This strategy of creating relationships with customers has as its main objective the generation of value and customer loyalty through a closer and more direct relationship.

Relationship marketing is a strategy that has had a greater impact with technological development, social media for example, has strengthened communication between company and customer, making the relationship closer and more dynamic.

Therefore, companies that use relationship marketing create value through content that generates benefits and customer engagement with the company, increasing loyalty and positioning in the market.

Learn more about relationship marketing here:

brainly.com/question/6059198

6 0
2 years ago
James purchased a commercial property at a 7.5% cap rate. The previous owner agreed to finance the deal at 8%. Why may James ele
dlinn [17]

Answer:

James will lose money, since his earnings will be lower than the interest that he must pay.

Explanation:

The capitalization (cap) rate is a ratio calculated by dividing the net operating income over the property asset value.

For example, if James is purchasing the property at $100,000, his net earning will be $7,500 per year (cap rate of 7.5%), but he will have to $8,000 in interests for the property. The interests are higher than the earnings, therefore the leverage is negative.

7 0
3 years ago
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