Excellence in Business Communication (11th Edition)
Excellence in Business Communication (11th Edition)
11th Edition
ISBN: 9780133544176
Author: John V. Thill, Courtland L. Bovee
Publisher: PEARSON
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Chapter 2, Problem 1LOC
Summary Introduction

To determine:

What are the reasons for a team to achieve a higher performance than an individual alone?

Introduction:

A team is a unit of two or more people who come together to share the responsibilities of a mission to achieve a certain goal. Teams are often cross-functional with individuals from different backgrounds having expertise in different areas. By discussing the viewpoints of all the individuals in a group, the team as a whole has the ability to bring out the best quality outcomes that will be aligned with expectations of majority in the public from different backgrounds. However, it’s also possible to slow down a progress upon the conflict of contradictory ideas and hidden agendas of individuals within a team. Hence, working as a team has both its advantages and disadvantages.

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Kenzi Kayaking, a manufacturer of kayaks, began operations this year. During this first year, the company produced 1,000 kayaks and sold 750. at a price of $1,000 each. At this first year-end, the company reported the following income statement information using absorption costing. Sales (750 $1,000) $750,000 Cost of goods sold (750 $450) 337,500 Gross margin 412,500 Selling and administrative expenses 240,000 Net income $172,500 Additional Information: a. Production cost per kayak totals $450, which consists of $350 in variable production cost and $100 in fixed production cost the latter amount is based on $100,000 of fixed production costs allocated to the 1,000 kayaks produced. b. The $240,000 in selling and administrative expense consists of $95,000 that is variable and $145,000 that is fixed. Required: Prepare an income statement for the current year under variable costing.
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