Answer:
The secondary market is the market in which securities are traded. This market no longer accumulates new financial resources for the issuer, but only reallocates resources among subsequent investors.
As a resale mechanism, it allows investors to freely buy and sell securities. In the absence of a secondary market or its weak organization, the subsequent resale of securities would be impossible or difficult, which would discourage investors from buying all or part of the securities. As a result, society would be left on the losing side, since many, especially the newest, undertakings would not receive the necessary financial support.
Answer:
A particular product line is most likely to be dropped when:
- its total fixed costs are more than its contribution margin
- its variable costs are more than its fixed costs
- its unavoidable fixed costs are more than its contribution margin.
Explanation:
The aim of every producer is to maximize profit and to make this possible, the cost of producing a particular product should fall below the contribution margin.
In the case that the gross profit is always negative due to high cost of production, further production should be discouraged.
The decision to drop a particular product line is usually reached when:
- Its total fixed costs are more than its contribution margin: Here, the company will run at a loss. It is sustainable to continue production..
- Its variable costs are more than its fixed costs: This is also an unfavorable situation that does not sustain mass production. Therefore, further production should discontinue.
- its unavoidable fixed costs are more than its contribution margin: At this rate, profit cannot be maximized. It is a lose-lose situation for the company.
Answer:
Instructions are listed below
Explanation:
Giving the following information:
CarmelRugs plans to sell carpets for $1,000 each. The company will purchase the carpets from a local distributor for $400 each, with the privilege of returning any unsold units for a full refund.
Jean’sClub has offered Carmel Rugs two payment alternatives for the use of space.
Option 1:
Fixed cost= $17,400 for the sale period
Option 2: 20% of the total revenues earned during the sale period.
Break-even point= fixed costs/contribution margin
Option 1:
Break-even point= 17400/(1000-400)= 29 carpets
Option 2:
Break-even point= (400+200)/(1000-400)=1 carpet (no fixed cost)
Lucia’s analysis is subject to assumptions because(c) The analysis lacks validity if the total fixed costs required for the calculated break-even point generates too low of capacity.
Explanation:
Cost-volume-profit analysis is used to make short-term decisions.
Cost-volume-profit (CVP) analysis is used to study the changes in cost and volume and how its impact on the company's operating income and net income.
While performing <u>Cost-volume-profit (CVP) analysis</u> several assumptions are made like assuming the Sales price per unit to be constant. Variable costs per unit to be constant.
The five basic component of CVP analysis includes
- volume or level of activity
- unit selling price
- variable cost per unit
- total fixed cost
- sales mix.
Answer:
The total March sales that Kittyz anticipated is $100,000.
Explanation:
The details of beginning and ending inventory are irrelevant for sales; they are relevant only for production quantity.
total March sales for Kittyz anticipated = 20000*$5
= $100,000
Therefore, The total March sales that Kittyz anticipated is $100,000.
