b. The company is managing the cost of manufacturing product than the industry, and has slightly selling and administrative expenses relative to the industry. The combined impact causes net income as a percent of sales to be than the industry average.
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- One key difference appears when comparing the income statements of a manufacturing company to a merchandising company. What is that difference? Cost of goods manufactured is subtracted from sales to get gross profit on a manufacturing income statement, while cost of goods purchased is subtracted from sales to get gross profit on a merchandising income statement. O Manufacturing companies use cost of goods manufactured and merchandising companies use cost of goods purchased. Manufacturing companies use work in process, raw materials, and finished goods inventory balances to calculate cost of goods sold, while merchandising companies use only merchandise inventory balances. Cost of goods sold equals the cost of merchandise purchased for a merchandising company, while cost of goods sold equals the cost of raw materials purchased for a manufacturing company.The marginal product of labour is defined as the ____. a) Average output per worker b) Cost of one worker c ) Change in output from using one more unit of labour d) Change in revenue from using one more unit of labourWhat is economic surplus defined as? A) The total revenue earned by a firm B) The difference between total revenue and total costs C) The total amount of money available for investment D) The value of goods produced in excess of demand Correct Answer: B) The difference between total revenue and total costs
- Gross profit will result if: O Sales revenues are greater than operating expenses. Operating expenses are greater than cost of goods sold. Sales revenues are greater than cost of goods sold. O Operating expenses are less than net income.First step - you need to understand each individual components of the income statement (also called a Profit & Loss Statement or P&L Statement): Sales (Revenue) The sales figure represents the amount of revenue generated by the business. It is calculated as the total of the number of units sold multiplied by the selling price per unit. The amount recorded here is the total sales, minus any product returns or sales discounts. Cost of Goods Sold This number represents the costs directly associated with making or acquiring your products. Costs include materials purchased from outside suppliers used in the manufacture of your product, as well as any internal expenses directly expended in the manufacturing process. In a service business where you, as the owner, are the only expense in supplying the service, and you do not pay yourself a salary beyond the company profits, your service expense may be zero. However, in a service business where you pay yourself a salary or have…Kindly answer all questions: 1.) Cost behavior is considered linear whenever a straight line is a reasonable approximation for the relation between cost and activity. A. True B. False 2.) Which of the following is an example of a cost that is variable with respect to the number of units produced? A. rent on administrative office building B. rent on factory building C. Salaries of top marketing executives D. direct labor cost, where the direct labor force is adjusted to actual production of the period 3.) Fixed costs are constant in total amount over the relevant range of operations. A. True B. False 4.) The cost function derived by the simple least squares method: A. must be tested for minimum and maximum points. B. is parabolic. C. is linear. D. is curvilinear.
- 1. What type of cost includes product ingredients and materials? a. fixed c. total b. revenue d. variable 2. What type of cost includes the rental of space? a. fixed c. total b. revenue d. variable 3. What type of cost is the product of the price and the quantity sold? a. fixed c. total b. revenue d. variable 4. What concept is being described when the business will neither earn a profit nor suffer a loss? a. break-even c. profit b. loss d. summit 5. What type of analysis shows equal revenue and total cost? a. break-even c. profit-loss b. cost of variable d. volume of sales Read the selection for questions 6-10. Junedyl is planning to run a coffee shop where he plans to sell each cup of coffee at 50.00. The ₱ fixed cost that is amounting to 40,000.00 includes all his expenses for the rent, wages, basic needs and others. ₱ So even if Junedyl will not be able to sell, he is still obliged to pay this amount. If it costs Junedyl an average of 10.00 for every cup of coffee which is allotted…Calculate the Break-Even Sales Amount and Sales Amount of Company X with the attached P&L (Profit & Loss) table? -Analyze and interpret X Business Sales Price (Unit) Total Sales Quantity (units) Total Sales Amount (s*unit prc.) Variable Cost (units) Total Variable Cost (b.x) Contribution Margin Total Fixed Costs P/L (Profit/Loss) Profit Margin Contribution Margin (s-b) Contribution Margin Ratio (s-b) / s 100TL / Brm. 20.000,00 2.000.000,00 75,00 1.500.000,00 500.000,00 150.000,00 350.000,00 ? 25,00 25,00% Breakeven Point (Sales Unit) (a/KP) ? Breakeven Point (Sales Amount ?. A company can use cost-volume-profit analysis to determine the level of sales required to earn a target profit. TRUE OR FALSE
- What can the weighted average contribution margin ratio be used for? Multiple Choice To solve for a measure, at any level of sales volume, of the sensitivity of operating profit to changes in volume. Breakeven and profit planning for sales volume expressed in dollars (Y) rather than units (Q). To calculate an average per-unit contribution margin based on an assumed sales mix. To figure out the relative proportion in which a company’s products (or services) are sold. To determine the extent of fixed costs in an organization’s cost structure.Which of the following is NOT an objective of determining product costs for manufacturing firms? A) To determine selling prices B) to reduce operating leverage C) to make decisions D) to do financial reportingA multi- step income statement ___________. A. Seperates cost of goods sold from operating expenses. B. Considers imterest revenue an operating activity. C. Is another name for a simple income statement. D. Combines cost of goods sold and operating expenses.