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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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?
Help please... also for 2b.) $(41,000)
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…
The Protek Company has been growing very fast, but profitability has declined from 11.85% to 2.36% in just two years. Costs have increased faster than sales and expenses are out of control. The Board of Directors has appointed Bob Smith to come up with some recommendations that are likely to help get the situation under control. He has made the following suggestions, but has hired you to actually put the numbers into proforma statements to present to the Board at their next meeting. Income Statement The company will slow down the growth of sales to 15% for the next year (20X4). Bob does not see any easy fixes to the cost of good sold situation, so those will go up 15% in line with sales, leading to the same gross margin percent as this past year. Bob has decided that the budgets for the Marketing and Research and Development departments should be exactly the same dollar amount as in 20X3. He feels that imposing that particular discipline to the Marketing Department will be good for…
Exeter Group is a large retail company that has brick-and-mortar outlets throughout the Southeast. They have been in business for many years, but two years ago started an online sales channel to offset slowing in-store sales. The human resources (HR) department at Exeter handles tasks for the two divisions that make up Exeter: Retail and Online. Retail Division manages the company’s traditional business line. This business, although still profitable, is currently not growing and may be shrinking slightly. Online Division, on the other hand, has experienced double-digit growth from the beginning. The cost allocation system at Exeter allocates all corporate costs to the divisions based on a variety of cost allocation bases. HR costs are allocated based on the average number of employees in the two divisions. There are two basic activities in the HR Department. The first is employee maintenance (payroll administration, benefits, and so on), which is an ongoing activity and requires the…
Please help me.
A successful franchise owner of a prestigious sporting goods chain is feeling the effects of technology, with more and more online sales and less and less customers in the shops. Locally there are three stores, and typically each store needs the following positions staffed for optimum profitability and success: a store manager an assistant manager five department managers and 20 customer service representatives, Averaging $1 200 000 in annual revenue. However, there has been a trend of 20 percent sales decline in stores, with an increase of 30 percent sales online (last year the online revenue stream was $300 000). The franchise owner was able to handle all of the online sales with a team of five full-time remote workers (working from home) last year. The owner wants each store to maintain its productivity, which he measures as the revenue per employee. He also thinks that there is potential to grow the online business. Please help the owner by answering the following questions.…

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