Underwood Company's gross margin percentage increased from 40% to 45%. Which of the following is not a possible explanation for this increase, assumingall other things being equal?Multiple ChoiceUnderwood raised its per unit sales price.Underwood's supplier lowered its per unit price.Underwood sold more products.Underwood started taking advantage of purchase discounts.S€

The correct answer is:Underwood's supplier lowered its per unit price.Explanation:If Underwood's…

Answered: Underwood Company's gross margin…

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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Similar questions

If profit is maximum at sales of 700 units, does the firm have no choice but to limit sales at this level?
If a company decreases its selling price for its products. The Increase? O Total cost O Cost plus pricing O Break even quantity. O Profit it
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ABC Company' management believes that every 9% increase in the selling price of one of the company's products results in a 10% decrease in the products total unit sales.The variable production cost of this product is 12.60 per unit and the variable selling and administrative cost is 4.90 per unit. The product's profit- maximizing price according to the formula in the text is closest to: a. 104.20 b. 19.11 c. 20.83 d. 96.12
Company A's gross profit rate last year was 32.0% and this year it is 28.4%. Which of the following would not be a possible cause for this decline in the gross profit rate? O Company A's average margin between unit selling price and inventory unit cost is decreasing. O Company A may have seen a decline in total gross profit while maintaining net sales. Company A may have begun selling products with a higher markup. O Company A must have paid higher prices to suppliers without passing these costs on to customers.
Please help with 7 through 10. Thank you!:)
XYZ Company wishes to gain more market share. In order to do that, the company is planning to double the current production and sales quantity. At the same time, the company plans to decrease the selling price per unit by half. Assuming that the total fixed cost and the variable cost per unit remain unchanged, what would be the effect on ?profit .Cannot be determined using the information in the question a O Profit would remain unchanged b O Profit would decrease .c O None of the given answers .d O Profit would increase e O
Assume PLF has no beginning inventory. If this year’s actual sales are 225,000 bulbs, calculate operating income for PLF using each type of capacity to compute fixed manufacturing cost per unit.
stion Company XYZ produces and sells two types of calculators: Basic and Scientific. The Basic has a lower selling price per unit compared to the Scientific. However, the Basic has a higher contribution margin compared to the Scientific. Due to fixed production capacity, the company has a cap on total production ability. If the company's CEO has decided to shift the sales mix towards producing more Scientific calculators. What red would be the effect on total profits? d out of O a. Total profits would increase g O b. Total profits would decrease on Oc. Total profits would remain the same O d. None of the given answers O e. Cannot be determined using the above information
Ready Electronics is facing stiff competition from imported goods. Its operating income margin has been declining steadily for the past several years. The company has been forced to lower prices so that it can maintain its market share. The operating results for the past 3 years are as follows: Year 1 Year 2 Year 3 Sales 14,500,000 9,500,000 9,000,000 Operating income 1,200,000 1,145,000 945,000 Average assets 15,000,000 15,000,000 16,750,000 For the coming year, Ready's president plans to install a JIT purchasing and manufacturing system. She estimates that inventories will be reduced by 70% during the first year of operations, producing a 20% reduction in the average operating assets of the company, which would remain unchanged without the JIT system. She also estimates that sales and operating income will be restored to Year 1 levels because of simultaneous reductions in operating expenses and selling prices. Lower selling prices will allow Ready to expand its market share. 1.…
A higher gross margin implies ______________ . The company has huge market share The company has the flexibility to change its pricing policy The company sells goods at huge discounts The cost of goods sold remains same over the years
Each of a company's two product lines has a different contribution margin ratio . If the company's total sales remain the same but the sales mix shifts toward selling more of the product with the higher contribution ratio , which of the following is true ? O a Fixed cost will be constant . . the breakeven point will decrease . Ocall of the answers are true . d the average contribution margin ratio will increase . O e operating income will increase

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