Predatory Pricing is the practice whereby a foreign producer intentionally sells its products in the United States for less than the cost of production to undermine the competition and take control of the market.
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hen there is a situation in the market whereby the products are sold at a cost very low than the cost of other suppliers refers to the predatory pricing. When predatory pricing is practiced then the suppliers with lower price will alone survive in the market making all the other suppliers to forcefully leave the market.
This kind of act is illegal. This is because predatory pricing will eradicate the competition. The main aim of this type of pricing is to eliminate the small business from the market. In the given scenario, a foreign producer is selling its products intentionally at lower price in U.S for the lower cost than the cost of production and takes the market to its control which is an example of Predatory Pricing.
Answer:
Information signaling
Explanation:
Information signalling is defined as the various actions a firm takes that communicates it's financial outlook. For example if a firm releases a dividend policy it communicates the value of the firm's stock.
In this scenario the CEO announced increase in the firm's dividend. This will convey to investors that the company has a competitive advantage which will result in additional income, so dividends are being raised.
It is an indirect way of announcing good news about the prospect of a new technology being created.
<span>Decrease by $57,400 per month.
Looks look at the cash flow for continuing to produce product a and discontinuing product a.
Continuing to produce
Income = 15900 * $29 = $461,100
Variable Expenses = 15900 * 23 = $365,700
Fixed overhead = $109,000
Total cash flow = $461,100 - $365,700 - $109,000 = -$13,600
So the Lusk company is losing $13,600 per month while producing product a. Let's see what happens if they stop producing it.
Income = $0
Variable Expenses = $0
Fixed overhead = $71,000
Total cash flow = $0 - $71,000 = -$71,000
So if they stop producing it, their fixed overhead decreases, but is still at $71,000 per month, for a total loss per month of $71,000.
The conclusion is to either lose $13,600 per month, or $71,000 per month. So if they stop production of product a, their loss per month will increase by $57,400.</span>
Answer:
Charges current production cost directly to work-in-process inventory
Explanation:
The blackflush costing is the costing method in which the present cost of production would be charged to the work in process inventory in a direct way
Therefore as per the given situation the second option is correct
ANd, the rest of the options are wrong as it does not meet the criteria
So the second option would be taken into consideration
This implies that the work would take longer as well, making the product cost more
