Answer:
a. According to the company's accounting system, what is the net operating income earned by product D14E? (Net losses should be indicated by a minus sign.)
b. What would be the financial advantage (disadvantage) of dropping product D14E? Should the product be dropped?
- financial disadvantage of discontinuing the produce is -$68,000, so the company should not discontinue the product since its losses would increase
Explanation:
total sales $670,000
- variable expenses $295,000
- fixed manufacturing expenses $246,000
- fixed selling and administrative expenses $194,000
net loss = $65,000
if product D14E is discontinued, $196,000 + $111,000 = $307,000, of fixed expenses can be avoided, but $133,000 are not avoidable. if the company discontinues the product, its losses will increase by $133,000 - $65,000 = $68,000
Answer:
B
Explanation:
The Lower of Cost or Market Value Applies to the closing inventory and should be value at $103,700 Cost, which is the lower.
Answer:
Location grounded pricing
Explanation:
Location grounded pricing is the term which is defined as the prices of the items at the location level or at the company. This method of pricing let the business to define the different price base for the same item or product at different locations of inventory.
In short, it is defined as when the business change the price base of the product or item at one location, it will affect the price base at other locations.
So, in this case, the resort, set the price base for cottages facing the lake higher than those of cottages which do not face lake. Therefore, it kind of pricing is referred to as the location based pricing.
I would fire them because they broke the clause and caused issues because of it
