Answer: $16,925.90 increase
Explanation:
Company already has the excess capacity to handle this order so the fixed costs will not be included as they would have already been incurred.
Cost of manufacturing the trees would be:
= Variable cost + Fixed cost
= ((51.61 + 3.80 + 1.00 + 8.26 for white tree) * 230 trees) + 5,000 for molds
= (64.67 * 230) + 5,000
= $19,874.10
Incremental revenue = 230 trees * 160
= $36,800
Incremental operating income = 36,800 - 19,874.1
= $16,925.90 increase
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<em>Note: Options might be for a variant of this question. </em>
Answer:
The correct option is B: Gap 2
Explanation:
The gaps model of service quality, which is also referred to as the 5 gaps model is a vital framework used by organization to ensure customer satisfaction. The Gap 2 model is normally between the perception of the management and what the actual experience of the customer is. In the Gap 2, managers always ensure that organization are delivering and defining the level of quality service they need. From the question Fedex is dealing with actual customer-defined performance standards and this indicates that they are a closing provider of the gap 2 of the gaps model of service quality.
Answer: A firm may operate in multiple industries.
Different firms may use different accounting practices.
Explanation:
Ratio Analysis as you probably know is a very useful tool in financial analysis. It works by comparing ratios based on items in the financial statements of a company to measure certain things such as the Company's Liquidity, Profitability and the like.
It does have certain drawbacks though such as,
A firm may operate in multiple industries
When a firm is operating in multiple industries. Comparing ratios is not a simple task. Different industries record profits and costs differently and just because a ratio is held in high esteem on one company does not mean it is good in another thereby making comparison based on ratios alone quite cumbersome.
Different firms may use different accounting practices
Now if different companies use different Accounting practices, you might find that ratios cannot be straightforwardly compared because different types of figures were used by the different companies. For instance, some companies might use a Straight Line Depreciation method as opposed to a Reducing Balance method which will have varying effects on income.
Answer:
The elasticity of supply for hot cocoa is 1.43.
(D) Supply in the market for coffee is less elastic than supply in the market for hot cocoa
Explanation:
Using the midpoint formula,
Elasticity of supply for hot cocoa = (change in quantity supplied/average quantity supplied) ÷ (change in price/average price)
change in quantity supplied = 101 - 31 = 70
average quantity supplied = (101+31)/2 = 66
70/66 = 1.06
change in price = 9.75 - 4.5 = 5.25
average price = (9.75+4.5)/2 = 7.125
5.25/7.125 = 0.74
Elasticity of supply for hot cocoa = 1.06 ÷ 0.74 = 1.43. The supply for hot cocoa is elastic because the elasticity of supply is greater than 1.
Elasticity of supply for coffee = (73 - 31)/(73+31)/2 ÷ 0.74 = 42/52 ÷ 0.74 = 0.81 ÷ 0.74 = 1.09. The supply for coffee is elastic because the elasticity of supply is greater than 1.
However, supply in the market for coffee is less elastic than supply in the market for hot cocoa because the elasticity of supply for coffee is less than that of hot coffee.
