Question

In: Accounting

Indicate the effect (increase, decrease, no change, or not enough information) that each of the following...

Indicate the effect (increase, decrease, no change, or not enough information) that each of the following situations has on break-even unit sales. If you answer “not
enough information,” list the information that you need in order to be able to deter-mine the effect.

(a) A retail company purchases price tags to use in place of the stickers it has used in the past.
(b) An athletic equipment store leases more retail space.

(c) A bakery increases its advertising expense

(d) A merchandiser plans to increase the selling price of its product. To counter potential decreases in sales, the merchandiser also plans to increase the amount of per-product commission that the sales staff earns.
(e) An accounting firm plans to increase its billing rate per hour. (f) A retail company has found a supplier that will provide the same merchandise its old supplier provided, but at a lower price.
(g) A private college in the Northwest installs air conditioning in its dormitories. (h) A retail company reduces advertising expenses and increases the commissions of its sales force.
(i) Instead of having its office building cleaned by a cleaning service, a company plans to hire its own cleaning crew.

Will be rated. Thanks.

Solutions

Expert Solution

Indicaton of effect in break even sales
Question no answer Reason
a No change There not changing in price of the product in the place of retails price tag they are using sticker
b increase increase the break even sales because athletic equipment store lease more retails space because of that leasing the fixed cost will increase so the break even sales also increase
c increase bakery increase the advertisement expenses so the increase in variable cost per unit the contribution will reduce per unit because that BEP will increase
d No change because of increase in selling price the counter part the sales have decreased and the increase in the commission of the sales per product. It is assumed that the contribution increased due to chang in sales price equals to decrease in sale and sales commission
e Decrease Billing rate increased means income or contribution will increase. Due to increase in contribution the BEP will decrease
f Decrease It Purchase price decreased due to thet the contribution will increase so the BEP will decrease
g increase installing the air conditions means the contribution will decrease because of the decrese in the contribution the BEP will increase
h No change the advertisement expenses decrease and the sales commisson increased it is assumed the decreased advertisement equals to increasing in sales commison so there is no change in BEP
i No change the company decrease the cleaning service cost by increasing the own cleaning crew. It is assumed that the decrease in cleaning service cost equals to incrasing in its own cleaning crew

ekkarill92 answered 1 year ago
Next > < Previous

Related Solutions

1- In the space below each of the following, indicate the effect [increase (+), decrease (−)]...
1- In the space below each of the following, indicate the effect [increase (+), decrease (−)] on equilibrium price (P) and equilibrium quantity (Q) of each of these changes in demand and/or supply.                                                                                                                  P                                 Q (a) Increase in demand, supply constant             ________               ________ (b) Increase in supply, demand constant             ________               ________ (c)   Decrease in demand, supply constant           ________               ________ (d) Decrease in supply, demand constant           ________               ________
For each of the following indicate the expected effect (e.g. increase, decrease, remain unchanged, etc.) in...
For each of the following indicate the expected effect (e.g. increase, decrease, remain unchanged, etc.) in the presence of significant multicollinearity: Coefficient estimates: Standard errors of the estimated coefficients: t-statistics: R-squared: Name two possible solutions if you detect multicollinearity in a regression.
Indicate the effect of the following transactions by showing whether there is an increase, decrease or...
Indicate the effect of the following transactions by showing whether there is an increase, decrease or no effect on the Assets, Liabilities and Owner’s Equity. Do NOT Indicate the specific accounts affected by each transaction. Purchased shares in another company for greater than their book value Purchased inventory on credit Issued additional shares for cash Declared dividends Sold inventory on account Collected cash from creditors Paid for inventory purchased on credit Paid wages in cash Recorded depreciation on equipment Repaid...
Indicate the effect each account has on retained earnings. (increase, decrease, or no effect) a)advertising expense...
Indicate the effect each account has on retained earnings. (increase, decrease, or no effect) a)advertising expense b)Service revenue c) Insurance expense d) Salaries & Wages Expense e) Dividends f) Rent revenue g) Utilities Expense
Indicate with each event whether the event is likely to increase, decrease or have no change...
Indicate with each event whether the event is likely to increase, decrease or have no change on current profits. (10 pts.) Event Change on Current Profits- Increase, Decrease or No Change A company that normally takes long-term contract revenues into income over 10 years decides to take it over 5 years. A company that has been paying A/P consistently in 30 days decides to push the A/P to 60 days. A company normally writes off bad inventory annually decides to...
1) Indicate how each of the following errors would affect(increase, decrease, or no change) your calculated...
1) Indicate how each of the following errors would affect(increase, decrease, or no change) your calculated value for the molar volume of O2 at STP (assuming that you complete the experiment otherwise correctly). In each case, explain your answer. a. you forgot to subtract the vapor pressure of water in determining the pressure of O2 b. while heating your sample in the test tube your flame was improperly adjusted so that the black soot formed on the outside of the...
1) Indicate how each of the following errors would affect(increase, decrease, or no change) your calculated...
1) Indicate how each of the following errors would affect(increase, decrease, or no change) your calculated value for the molar volume of O2 at STP (assuming that you complete the experiment otherwise correctly). In each case, explain your answer. a. you forgot to subtract the vapor pressure of water in determining the pressure of O2 b. while heating your sample in the test tube your flame was improperly adjusted so that the black soot formed on the outside of the...
In each of the following scenarios, indicate whether the unemployment rate will increase or decrease. a....
In each of the following scenarios, indicate whether the unemployment rate will increase or decrease. a. The government increases income tax rates   (Click to select)   increase   decrease   uncertain b. The government repeals a law that made it difficult to fire workers   (Click to select)   increase   decrease   uncertain c. There is an increase in the percentage of workers who are unionized   (Click to select)   increase   decrease   uncertain d. The number of weeks workers are entitled to unemployment benefits falls   (Click to...
In each of the following scenarios, indicate whether the unemployment rate will increase or decrease. a....
In each of the following scenarios, indicate whether the unemployment rate will increase or decrease. a. The government increases income tax rates  (Click to select)  increase  decrease  uncertain b. The government repeals a law that made it difficult to fire workers  (Click to select)  increase  decrease  uncertain c. There is an increase in the percentage of workers who are unionized  (Click to select)  increase  decrease  uncertain d. The number of weeks workers are entitled to unemployment benefits falls  (Click to select)  decrease  increase  uncertain e. More firms begin to pay efficiency wages  (Click to select)  increase  decrease  uncertain f. The...
What effect will each of the following have on the demand for hamburgers? (increase, decrease, or...
What effect will each of the following have on the demand for hamburgers? (increase, decrease, or no effect) a. Hotdogs become more expensive (while the price of hamburgers stays the same).                           ___ ___________ b. The price of hamburgers falls.                                                             ______________ c. Income declines and hamburgers are an inferior good.                                                           ______________ d. The price of French fries (which people eat with hamburgers) falls.                                                     ______________ 2- What effect will each of the following have on the supply of fast...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT