Figure 1 Reported Company Profits (In billions of dollars) Average Self-esteem Scores 1. Summarize the information presented in Figure 1. According to the information the researcher collected from the employees through a self-esteem questionnaire, shows that the greater a companies profit the higher its employees self-esteem is. 2. The researcher conducting this study believes that employees are more productive when they have higher levels of self-esteem.
In the given scenario; if Company A determined that marginal revenue (MR) is greater than marginal cost (MC) the action that they should take to reach profit maximization is to continue manufacturing additional units of widgets until the marginal revenue is equal to marginal cost. Using the information provided in the data table, when firm has reached the output quantity of seven widgets their marginal revenue is still larger than their marginal cost by twenty dollars. As a result of increasing the quantity of widgets produced to eight the marginal revenue and marginal cost are now equal to zero therefore maximizing Company A’s
As the time horizon increases, variable costs rely less on existing factors and restrictions and therefore will begin behaving differently which will in turn affect the cost of production (Wright, 2007). The second way a firm that’s into profit maximization can decide its greatest level of output is by way of the marginal revenue -- marginal cost method. This is done by subtracting the marginal cost from the marginal revenue that a product generates. Using marginal cost and marginal revenue as the bases, profit maximization will be obtained at the point when marginal revenue is equal to marginal cost. If the marginal revenue is greater than marginal cost this would be when a profit maximizing firm would need to increase production until marginal revenue is equal to marginal cost.
An activity can have more than one cost driver attached to it. For example, a production activity may have the following associated cost-drivers: a machine, machine operator(s), floor space occupied, power consumed, and the quantity of waste and/or rejected output. (BusinessDictionary.com, 2013)" I think the company would do better with Activity Based Costing (ABC) because this allocation method is more accurate because it takes all cost related factors into consideration. The first way the company was allocating department costs was and even three way split, which was undercutting Fabricating, which needs more funds, and this method was overcompensating Laminating and Assembling, which require less. With the ABC Method, the costs are factored by the different cost drivers, such as machinery, staff, number of parts needed, amount of products made, as well as direct material costs and direct labor hours.
This ratio tells us how effectively and efficiently a company is using its fixed assets to generate revenues. | Total asset turnover=Sales/Total assets | | The total asset turnover ratio measures the ability of a company to use its assets to efficiently generate sales.
Unions increase productivity, according to most recent studies. The voice that union members have on the job—sharing in decision-making about promotions and work and production standards—increases productivity and improves management practices. Better training, lower turnover and longer tenure also make union workers more productive. Union members in low-wage occupations on average earn a great deal more than nonunion workers in the same occupations, often lifting their earnings rates above the official poverty level. For example, union security guards may earn $10.97 per hour, 36 percent more than nonunion workers in the same occupation.
By following the matching principle all of the costs associated with a particular product, not just its wholesale price, is expensed when the item is sold. Requirement 2 - A Generally, the lower of cost or market method is used to value inventory in order to “avoid reporting inventory at an amount greater than the benefits it can provide” (Spiceland, Sepe, & Nelson, 2013, p. 476). According to Spiceland, Sepe, and Nelson (2013) the “change in replacement cost usually is a good indicator of the direction of change in selling price” (p. 477). When the change in replacement cost is negative the LCM method allows companies to apply the conservatism principle. The conservatism principle involves “recognizing expenses and liabilities as soon as possible when there is uncertainty about the outcome, but to only recognize revenues and assets when they are assured of being received” (The conservatism principle).
ECON 1312 Homework Assignment # 2 Chapter 4 1. Why do we need a units-free measure of the responsiveness of the quantity demanded of a good or service to a change in its price? Answer: To measure or to compare the demand of the two unrelated goods or services. 2. Define the price elasticity of demand and show how it is calculated.
10. Question: (TCO 2) Action Corporation uses activity-based costing to apply overhead to jobs within a job-order costing system. The following overhead activities were budgeted for the year. ACCT 344 Week 2 Quiz 1. Question: (TCO 3) The appropriate cost accounting system to use when inventory items are produced on an assembly line is 2.
Fixed expenses are $424,000 per month. The marketing manager believes that a $7,000 increase in the monthly advertising budget would result in a 100 unit increase in monthly sales. What should be the overall effect on the company's monthly net operating income of this change? A. Increase of $8,000 B.