Question 1

Which of the following stages is characterized by rapid increases in sales and production?

Accepted Answer

The growth stage is characterized by rapid increases in sales and production as the product gains acceptance and attracts more customers. This is typically a period of high profits and expansion into new markets.

Question 2

What are some of the pricing practices regulated by law?

Accepted Answer

The answer of What are some of the pricing practices...

Question 3

Vicki Johns operates a catering company.Vicki provides food and servers for parties.She also rents tables, chairs, dinnerware, glassware, and linens.Alan and Debbie Holms contacted Vicki about catering for their daughter's wedding.They have requested an open bar, hors d'oeuvres (enough for 300 people), a large wedding cake, and forty tables with linens, dinnerware, and glassware.Vicki put together the following bid:
  Required:
Suppose that the Holmses blanch when they see the bid.Mr.Holms suggests that they had hoped to spend no more than $3,750 or so on the party.How could Vicki work with the Holmses to achieve a target cost of that amount?

Accepted Answer

The answer of Vicki Johns operates a catering company.Vicki provides...

Question 4

Which of the following stages has revenues for the entire industry decreasing?

Accepted Answer

During the decline stage, the industry experiences a decrease in revenues due to various reasons such as market saturation, increased competition, and changing consumer preferences.

Question 5

Which of the following is NOT a limitation of profit management?

Accepted Answer

While the other options are all limitations of profit management, emphasis on volume variances is not necessarily a limitation, but rather a consideration in analyzing profitability.

Question 6

According to Hansen and Mowen, which of the following stages comes first?

Accepted Answer

The "Development" stage comes first in the product life cycle according to Hansen and Mowen.

Question 7

Compare and contrast the various pricing policies used by companies.

Accepted Answer

The answer of Compare and contrast the various pricing policies...

Question 8

The following information pertains to three different products being sold by Leone Company:
  Required:

Accepted Answer

The answer of The following information pertains to three different...

Question 9

Ellie Manufacturing Company produces three products: A, B, and
C. The income statement for 2006 is as follows:
  The sales, contribution margin ratios, and direct fixed expenses for the three types of products are as follows:
  Required:
Prepare income statements segmented by products. Include a column for the entire firm in the statement.

Accepted Answer

The answer of Ellie Manufacturing Company produces three products: A,...

Question 10

Answer the following:

Accepted Answer

The answer of Answer the following:
  ...

Question 11

The majority of the product cost is "locked in" during which of the following life-cycle stages?

Accepted Answer

The majority of the product cost is determined during the development stage, as this is when the design and engineering decisions are made that will ultimately impact production costs. During the introduction, growth, and decline stages, costs may fluctuate based on factors such as demand and competition, but the fundamental cost structure was established during development.

Question 12

The variable costing income statement for Jackson Company for 2011 is as follows:
  Required:
Prepare an absorption costing income statement for 2011.

Accepted Answer

The answer of The variable costing income statement for Jackson...

Question 13

A successful firm

Accepted Answer

A successful firm not only considers profits, but also pays attention to external economic and environmental trends, and measures its impact on the community and employees. This reflects a focus on long-term sustainability and overall success, not just short-term financial gains.

Question 14

An alternative to the limitation of focusing on profits would be

Accepted Answer

Focusing on long-term objectives and appropriate emphasis on profit allows for a more sustainable and ethical approach to business. This can involve considering the impact on stakeholders, social responsibility, and environmental sustainability rather than just short-term financial gains. Analyzing the product mix can also help identify areas where the company can increase profitability while still maintaining ethical and sustainable practices. Option A is not a true alternative as it still prioritizes profits. Option B is unethical and could result in misstated financial statements.

Question 15

Baker Company produced 30,000 units and sold 28,000 units in 2011.Beginning inventory was zero.During the period, the following costs were incurred:
  Required:
Compute the dollar amount of ending inventory using:

Accepted Answer

The answer of Baker Company produced 30,000 units and sold...

Question 16

The table division operates as a revenue center with the following relevant information for 2011:
  The actual selling price was $2 less than the expected selling price and the actual number of units sold is 200 more than expected.
Required:
  EP = Expected selling price
AP = Actual selling price
AS = Actual units sold
ES = Expected units sold

Accepted Answer

The answer of The table division operates as a revenue...

Question 17

Franklin Company's expected sales were 2,000 units at $100 per unit.During 2011, it had actual sales of 1,800 units at $110 per unit.Budgeted variable costs were $60 per unit. What is Franklin's sales price variance?

Accepted Answer

The sales price variance is calculated as (Actual Price - Budgeted Price) x Actual Quantity Sold. 
In this case, the actual price is $110 and the budgeted price is $100. 
So, the sales price variance is (110-100) x 1,800 = $18,000 (F).

Question 18

What are the ways employee behavior changes in relation to a profit emphasis?

Accepted Answer

All of these are potential changes in employee behavior when a profit emphasis is present. The desire to avoid losses can result in short-term decisions, unethical behavior may occur if rewards are based solely on profits, and employees may ignore less measurable outcomes that could benefit the company in the long run.

Question 19

Nordholm Construction Company builds houses.Each job requires a bid.Nordholm's bidding policy is to estimate the costs of materials, direct labor, and subcontractor's costs.These are totaled and a markup is applied to cover overhead and profit.In the coming year, Nordholm believes it will be the successful bidder on ten jobs with the following total revenues and costs:
  The residual will cover overhead and profits.
Required:

Accepted Answer

The answer of Nordholm Construction Company builds houses.Each job requires...

Question 20

Taylor Company's budgeted sales were 10,000 units at $200 per unit.Actual sales were 9,200 units at $210 per unit. Taylor's total sales variance is

Accepted Answer

Total Sales Variance = (Actual Units Sold x Actual Selling Price) - (Budgeted Units Sold x Budgeted Selling Price)
                 = (9,200 x 210) - (10,000 x 200)
                 = $1,932,000 - $2,000,000
                 = $68,000 (Unfavorable) 
                 
Therefore, the correct answer is option A.

Quiz 18: Pricing and Profitability Analysis