BeneMart, a large national retail chain, is nearing its fiscal year-end. It appears that the company isnot going to hit its revenue and net income targets. The company's marketing manager, Ed Mellon,suggests running a promotion selling $50 gift cards for $45. He believes that this would be verypopular and would enable the company to meet its targets for revenue and net income. What do youthink of this idea?

Whenever gift cards are sold, the amount collected is not recorded as sales but as a liability. It…

Answered: BeneMart, a large national retail…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Michael is the marketing executive of SHOPEE and he is planning to launch the 2.2.22 online SALE through price discounts, either 40% off or 20% off. He also learned that SHOPEE closest competitor LAZADA , is planning to promote also a 2.22.22 online SALE with price discounts , either 50% off or 30% off. If SHOPEE launches the 40% off, it will gain nothing. If LAZADA launches the 50% off or gain 8,000,000 if LAZADA launches the 30% off. If SHOPEE launches the 20% off, it will lose 2,000,000 if LAZADA launches the 50% off or lose 5,000,000 if LAZADA launches the 30% off. How much is the gain or loss for SHOPEE will Michael expect? A. 5,000,000 B. -5,000,000 C. 8,000,000 D. -2,000,000 E. NONE
Recently, Gardenia Philippines Reported an increase of 35% in bread sales in Quarter 2 of 2020. How has this possible given the pandemic situation we are experiencing? What do you think makes gardenia's brand successful among its rivals despite the pandemic? What unique characteristics have you observed in their operations? Can a well-planned and well-managed operations and supply chain help build a competitive advantage? Explain your answers comprehensively.
A furniture's store is considering tow marketing strategies: a loyalty program that would cost $3,000 and increase revenue by $15,000, or a seasonal sale that would cost $5,000 and increase revenue by $25,000. The store's contribution margin is 30%. Which strategy should they pursue if the goal is to maximize ROMI? What about if the goal is to maximize revenue growth?
The Simpson Corporation has gathered information regarding past sales of custom t-shirts. Year Sales 2013 $225,000 2014 $193,000 2015 $248,000 2016 $360,000 2017 $340,000 2018 $295,000 2019 $310,000 Answer the following questions. Predict the sales for 2020 using the moving average method. You noticed a sudden jump in sales for 2016. After inquiring about this jump, you were notified by your manager about a one-time special order sale for $60,000 in that year that is not likely to be repeated. What revision, if any, would you make in the sales information used for projection? If you revised your historical sales to be used to project 2020 sales, please recalculate your projection using the moving average method. Which projection (Question 1 or Question 3) do you feel is more representative of the Simpson Corporation's historical sales? Why?
You work for a firm of management consultants that offers assistance to new businesses. One of your clients is Blossom Manufacturing, a company that manufactures a small, but vital, component for the specialized lighting industry. Blossom is a new company (and a new client for your employer) and you have been assigned the task of advising it of its options for financing its inventory during the first few months. The marketing experts have told you that Blossom should have at least three months of inventory on hand so it can meet all demands from its customers. The annual production of the Blossom component is projected to be 140,400 units. Annual direct labour and direct material costs together are estimated at $351,000 per year. Variable manufacturing costs are estimated to be $210,600 per year; fixed manufacturing costs are projected to be $585,000 per year. Fixed marketing and administration costs are estimated at $819,000 per year. These projections are all for the company's first…
Zynex Co manufactures a range of electronic devices, which it sells to online stores and retail outlets. It has a risk-seeking attitude and its objective is to maximise profit. Six months ago it released a new version of its smartphone, the ZV. Zynex Co's main smartphone competitor has announced that it will launch a new version of its smartphone in one month's time and Zynex Co is concerned about the effect of the launch of this rival product on future demand for the ZV. For each of the previous ten smartphones launched by its competitors, Zynex Co's marketing team has analysed the impact on Zynex Co's sales performance. This data was retained specifically for the purpose of forecasting future demand of Zynex Co's smartphones and is stored in the company's financial database. Based on this analysis, the marketing team has identified three possible outcomes for the impact on the demand of the ZV: a small decrease, a medium decrease and a large decrease. Production volumes for the ZV…
Gerard Appliances, Inc., is a small manufacturer of washing machines and dryers. It sells its products to large, established discount retailers that market the appliances under their own names. Gerard generally sells the appliances on trade credit terms of n/60, but if a customer wants a longer term, it will accept a note with a term of up to nine months. At present, the company is having cash flow troubles and needs $10 million immediately. Its Cash balance is $400,000, its Accounts Receivable balance is $4.6 million, and its Notes Receivable balance is $7.4 million. (a) How might Gerard Appliances use its accounts receivable and notes receivable to raise the cash it needs? (b) What are its prospects for raising the needed cash?
The salespeople at Larkspur, a notebook manufacturer, commonly pressured operations managers to keep costs down so the company could give bigger discounts to large customers. David, the operations supervisor, leaked the $0.80 total unit cost to salespeople, who were thrilled, since that was slightly lower than the previous year's unit cost. Budgets were not yet finalized for the upcoming year, so it was unclear what the target unit cost would be. David knew the current year's operating capacity was two million notebooks, and Larkspur produced and sold just that many. The detailed breakdown of the $0.80 total unit cost is as follows. Direct material Direct labor Variable overhead Fixed overhead Total cost per unit $0.05 0.20 0.15 0.40 $0.80
A payday loan company has decided to open several new locations in a city and hires consultants to decide where to open these locations. The consultants are paid per store that is opened, and at the end of the quarter, the company notices a many of the new stores' sales volume fail to meet expectations. To incentivize the consultants to instead focus on opening profitable stores, the company decided to alter the compensation to a percentage of the profit earned per new store. This puts the consultants_ and the payday loan company should expect to compensate for this change. to Group of answer choices 1. In a less risky position; pay the consultants more than they would in the per- store scheme 2. A more risky position; pay the consultants less than they would in the per- store scheme 3. In a less risky position; pay the consultants less than they would in the per- store scheme 4. A more risky position; pay the consultants more than they would in the per- store scheme
Wildhorse Delivery is a rapidly growing delivery service. Last year, 80% of its revenue came from the delivery of mailing "pouches" and small, standardized delivery boxes (which provides a 20% contribution margin). The other 20% of its revenue came from delivering non-standardized boxes (which provides a 70% contribution margin). With the rapid growth of Internet retail sales, Wildhorse believes that there are great opportunities for growth in the delivery of non-standardized boxes. The company has fixed costs of $13,868,100. Sales mix is determined based upon total sales dollars. (a) What is the company's break-even point in total sales dollars? At the break-even point, how much of the company's sales are provided by each type of service? (Use Weighted-Average Contribution Margin Ratio rounded to 2 decimal places e.g. 0.22 and round final answers to O decimal places, e.g. 2,510.) Total break-even sales $ Sale of mail pouches and small boxes 24 Sale of non-standard boxes $

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