1. What are the two largest sources of Federal government revenue?
2. Explain the meaning of ‘discretionary’ and ‘non-discretionary’ spending in the Federal budget

Assume a proportional tax is imposed on wage. Given that the amount of tax revenue remains constant, the government plans to stop imposing a proportional tax in favour of a lump sum tax on wage in order to increase labour supply. Can the government achieve its goal? Use a diagram to show the effects.

CVP Analysis at Molly’s Cupcakes[1] (B)

Recall Molly’s information

                     Revenue                $34,000

               -    Expense                   37,100

                     Profit (loss)           <$3,100>

Management responded with the following information

Costs have been matched to revenue to determine what costs should appear as expenses.

The costs of goods remaining in inventory are not included in expenses.

There are no fixed manufacturing costs.

Cost of sales is 40% of revenue.

$8,500 of the selling and administrative expenses are variable.

Costs and selling prices are expected to remain stable for at least the next two years.

Based on this information you created the following contribution margin format income statement and used it to analyze several alternatives for management.   

                                                                   % of

                                                           Revenue

Revenue                        34,000                      

Variable COGS             13,600         40.00%

Variable S&A                  8,500         25.00%

CM                                  11,900         35.00%

Fixed Cost                     15,000         44.12%

Profit                              -3,100          -9.12%              

Management is now wondering how sales mix will affect their financial picture. It provided the following information.

The current sales mix, computed as percent of total units, is 80% regular cupcakes and 20% deluxe cupcakes. The total number of cupcakes currently being sold is 10,000.

Regular cupcakes sell for $3.00 and have a contribution margin of $0.95 per unit.

Deluxe cupcakes sell for $5.00 and have a contribution margin of $2.15 per unit.

Management believes it can increase sales of deluxe cupcakes by rearranging the display case. Its best estimate is that deluxe cupcakes would increase to 48% of cupcakes sold.

It believes it will continue to have the same number of customers and sell the same number of cupcakes.

Part One:

Prepare a contribution format income statement with columns for each product line. Include a total company column as well. Do not give a break-out for fixed costs per product line. Instead, just put the total for fixed cost in the total company column.

Compute the current weighted average contribution margin per unit.

Compute the new weighted average contribution margin per unit that management expects will result from rearranging the display case.

Compute the amount of profit that Molly’s would generate if rearranging the display case was successful (that is, if it achieved the predicted results). Explain how Molly’s Cupcakes was able to be profitable even though it is still only selling 10,000 cupcakes in total.

Assume that Molly’s is currently paying its sales staff a $0.25 per cupcake selling commission (variable selling expense). Does this encourage the staff to sell the high margin cupcakes? Explain.

Briefly describe a better way to pay commissions to your sales staff that aligns with overall company profitability.

Using the new weighted average contribution margin you computed in question 3, compute the number of cupcakes that Molly’s must sell in order to generate a target profit of $3,000. How many of these cupcakes will be deluxe cupcakes?

Part Two:

Assume that Molly’s implements the display case strategy that results in the revised sales mix and increased profitability. For long-run profitability, management is also considering purchasing a new machine that will mix, bake and frost the cupcakes, considerably reducing the amount of direct labor needed. If the machine is purchased, depreciation expense will increase by $10,000 for the period and direct labor costs will decrease by $.60 per cupcake for regular cupcakes and $.80 for deluxe cupcakes.

Prepare a new contribution formatted income statement assuming Molly’s implements the display case strategy and sales volume grows to 15,000 cupcakes (Scenario 1). What is the new net operating income?

Prepare a new contribution formatted income statement assuming Molly’s purchases the new machine and implements the new sales display strategy. Assume sales volume grows to 15,000 cupcakes (Scenario 2). What is the new net operating income?

Now we are going to look at operating risk. Calculate the BEP in sales dollars, Margin of Safety Percentage, Operating Leverage and Profit sensitivity for each scenario.

Evaluate the risk of Scenario One versus Scenario Two. Which scenario inherently has more risk?

Using the profit sensitivity multiplier, determine the change in profit under both scenarios if sales go up by 30%? Down by 30%?

Using your results from question 5, what conclusion can you make about the most favorable operating structure for Molly’s? Hint: calculate the sales volume where profit is equal under both operating structures.

Which of the following statements is true about profit, revenue and cost?

QUESTION 2

The relationship between quantity of input and total quantity of output is _____________

0.4 points   

QUESTION 3

Which of the following statements is true about Diminishing marginal product ?

0.4 points   

QUESTION 4

Which of the following statements is NOT true about total cost curve (cost function)?

0.4 points   

QUESTION 5

Which of the following statements is NOT true about variable cost (VC)?

0.4 points   

QUESTION 6

Marginal cost curve _______________

0.4 points   

QUESTION 7

Which of the following statements is NOT true about typical cost curves?

0.4 points   

QUESTION 8

In a competitive market, _______________

0.4 points   

QUESTION 9

A competitive firm ___________

0.4 points   

QUESTION 10

In economics and business, it is assumed that the behaviors of a competitive firm are always driven by _________

0.4 points   

QUESTION 11

For a competitive firm, marginal revenue ______________

0.4 points   

QUESTION 12

Which of the following conditions CANNOT ensure that the profit of a competitive firm is maximized?

0.4 points   

QUESTION 13

In a competitive market, price of the good is $5. A firm has produced 9 unites of the good and its marginal cost for the 10^th unit of production will be $3. Its current total revenue (9 units of production) is $ ________

0.4 points   

QUESTION 14

In a competitive market, price of the good is $5. A firm has produced 9 unites of the good and its marginal cost for the 10^th unit of production will be $3. If it continues to produce the 10^th unit and sell it, it total profit will ___________

0.4 points   

QUESTION 15

In a competitive market, price of the good is $5. A firm has produced 9 unites of the good and its marginal cost for the 10^th unit of production will be $3. If it continues to produce the 10^th unit and sell it, what is itstotal profit?

0.4 points   

QUESTION 16

Competitive firm’s short-run supply curve is _____________

0.4 points   

QUESTION 17

Which of the following statements is true about sunk costs of a competitive firm?

0.4 points   

QUESTION 18

For a competitive firm, if the price is higher than its AVC but lower than the bottom of its ATC, then ______________

0.4 points   

QUESTION 19

For a competitive firm, which pair of curves never intersect each other when Q>0?

0.4 points   

QUESTION 20

Competitive firm’s long-run supply curve is ______________

Explain a sound control over revenue recognition in the process of making credit sales for a manufacturing company.

Patterns and structure of revenue for state and local government are important policy concerns because they establish who will pay for public services. Revenue revision can begin only with a clear understanding of where revenue policy leaves the state and its localities now and what available options have not been selected. Furthermore, it is useful to understand what conditions are like in surrounding areas. Evidence for such discussions can be drawn from sources such as the Department of Commerce’s Survey of Current Business (monthly); the Bureau of Economic Analysis; the Census Bureau’s Census of Governments (quinquennially), Governmental Finances (annually), and State Tax Collections (annually); and state tax handbooks published annually by Research Institute of America (RIA) and Commerce Clearing House (CCH). You can find valuable data at the Bureau of Economic Analysis (www.bea.gov) and Bureau of Census (www.census.gov) websites. From those and similar sources, prepare answers to these questions about the revenue system in your state:

a. How does the burden of state, local, and state-local taxation in your state compare with that of the nation and region? (Comparisons are often made as percentages of state personal income and per capita income. What is the logical difference between the two measures?) State and local tax collections for each state are available at the website of the U.S. Bureau of Census (www. census.gov); look under the section labeled “Public Sector.” How does the local share of state and local taxes compare?

b. Prepare an estimate of the relationship between business and individual tax shares for your state. How do you decide what is a business tax and what is an individual tax?

c. How rapidly have state and local taxes grown in your state during the past five years? Is that faster or slower than growth in state personal income and the rate of inflation? Have there been tax increases (decreases) affecting that growth?

d. What are the major revenue sources used by governments in your state? How does relative use of those sources compare with the nation and the region? Does your state have any major taxes not common to other states (severance, business and occupation, local income, etc.)? Are some typical taxes not used?

My state is Arkansas. Please provide the website address for each question.

2. For the following total revenue and total cost functions of a firm:

TR = 800Q – 10Q2

TC = (2/3)Q3 -30Q2 + 672Q +4000

(a) Determine the level of output at which the firm maximizes total profit

(b) Calculate the profit

(need step by step, please)

One of the most effective ways to increase sales and revenue is to provide your current customers with excellent customer service. The following article provides real-world examples of how companies like Zappos and Amazon gain market share by providing their customers with excellent customer service. For this assignment, please click on the link provided to access the article. After reviewing the article

• Identify and describe in your own words three strategies that were outlined in the article that companies can use to increase market share by improving customer satisfaction.
• Identify the strategy that you feel would be most effective and justify your selection.

https://www.business.com/articles/customer-service-as-a-marketing-strategy/