Which of the following statements is true regarding the budgeted cost for direct materials?
A) It would be used on a static budget but not a flexible budget.
B) It would consist of two components - a standard quantity and a standard price.
C) It must be determined after materials are purchased for the year.
D) It can not be determined if a company uses a just-in-time inventory system.
B
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W & W, Inc manufactures and sells widgets. It sells widgets to Marklin of Marklin's Department Store and gives him a preference in pricing that discriminates against other retailers. Does Marklin have liability for price discrimination? Does W & W, Inc have liability for price discrimination? Explain
A strong brand has ______________________________.
a. An identity b. Positive image c. Unique personality d. All of the above
The MacMillen Company has equal amounts of low-risk, average-risk, and high-risk projects. The firm's overall WACC is 12%. The CFO believes that this is the correct WACC for the company's average-risk projects, but that a lower rate should be used for lower-risk projects and a higher rate for higher-risk projects. The CEO disagrees, on the grounds that even though projects have different risks, the WACC used to evaluate each project should be the same because the company obtains capital for all projects from the same sources. If the CEO's position is accepted, what is likely to happen over time?
A. The company will take on too many high-risk projects and reject too many low-risk projects. B. The company will take on too many low-risk projects and reject too many high-risk projects. C. Things will generally even out over time, and, therefore, the firm's risk should remain constant over time. D. The company's overall WACC should decrease over time because its stock price should be increasing. E. The CEO's recommendation would maximize the firm's intrinsic value.