Pilgrim Bank (A): Customer Profitability

How much do profits vary across customers?

Are online customers more profitable than offline customers?

What is the role of customer demographics in comparing online and offline profitability?

What is your recommendation to the senior management team in terms of Pilgrim Bank’s online channel pricing strategy?

Should the bank charge fees, offer rebates, or do nothing in regards to pricing for online channel use? Why?

A company began work in 2020 on a contract for $7,800. Other data are as follows:

If the company uses the percentage-of-completion method, for the journal entry that records construction revenue, construction expense, and gross profit for 2020, how much will be recorded for Construction in Process?

A company began work in 2020 on a contract for $7,800. Other data are as follows:

                                                   2020                         2021

Costs incurred to date                 $3,000 $5,600

Estimated costs to complete         2,000       —

Billings to date    4,400                   7,800

Collections to date                       2,000                      4,800

If the company uses the percentage-of-completion method, for the journal entry that records construction revenue, construction expense, and gross profit for 2020, how much will be recorded for Construction in Process?

t beginning of this year, XYZ Company has a machine worth 1000k, cash 30k, account receivable 200k, inventory 100k, account payable 50k, and notes payable 80k. During this year, XYZ had sold 75k of inventory, which brought in 120k in revenue (with half cash and half credit). In addition, the company also paid down 37.5% of the notes payable. What is the change of NWC this year?

Decentralized Activities

Differential Analysis and Product Pricing. Decentralized Operations is when decision making and authority is transferred to subunits of the company. This is the difference in revenue and expenses between different products. Please choose a company which produces more than one product. Take at least two of these products and discuss the different costs between these two products which may make one more profitable than the other.

Table 1

The following table shows output per hour produced by the different units of labor.

Table 1

The marginal revenue product of a resource is equal to the product of the marginal product of an input and marginal revenue.

     8.   According to Table 1, if the wage rate is $9 per hour, how many workers should this firm hire?

     9. According to Table 1, the marginal-revenue product of the:

   10.   According to Table 1, if the wage rate is $6 per hour, how many workers should this firm hire?

   11.   Refer to Table 1. If both the wage rate and the price of the good falls to $2, how many workers would the firm hire?

12.­ The structure of the product market as described by Table 1 is:

KC Marketing (KC) makes the following specialized campaigns for its customers:

KC will prepare a TV commercial for $1.5M, an app for $500K, and a Facebook page for $500K. The TV commercial, the app, and the Facebook page are not interrelated. If a customer purchases all items, the total cost is $1.5M, which the customer will pay upon signing the contract. Furthermore, only and only if the app is downloaded more than 10,000 times in the first month, KC will receive a one-time bonus of $100K. The agreement creates enforceable rights and obligations. Before the end of the fiscal quarter, the app was actually downloaded more than 10,000 times in the first month. How much revenue will KC allocate to the TV commercial?

When a firm's demand curve is tangent to its average total cost curve, economic profits are zero and the firm will exit the industry in the long run since firms are unwilling to operate at zero economic profit.

true or false

If the gain from a product-variety externality is less than the loss from a business-stealing externality, then there are likely to be too many firms in a monopolistic competitive market.

true or false

Although the monopolistically competitive firm maximizes profits at the output level where marginal revenue equals marginal cost, the firm’s price exceeds marginal cost

true or false

If firms in a monopolistic competitive market are earning economic profits in the short run, then, in the long run, new firms will enter and existing firms will lose customers to the new entrants.

true or false

the show time movie theatre sells thousands of gift certificates every year. The certificates can be redeemed at any time because they have no expiry date. Some of them may never be redeemed (because they are lost or forgotten for example). the owner of the theatre has raised some questions about the accounting for these gift certificates.

write an email to answer the following questions from the owner:

a) why is a liability recorded when these certificates are sold? After all, they bring customers into the theatre, where they spend money on snacks and drinks. Why should something that helps generate additional revenue be treated as a liability?

b) how should the gift certificates that are never redeemed be treated? At some point in the future, can the liability related to them be eliminated? If so, what type of journal entry would be made?