Overall cost leadership is a generic strategy unlike others that does not require a tight set of interrelated tactics.
Answer the following statement true (T) or false (F)
False
Overall cost leadership requires a tight set of interrelated tactics that include:
Aggressive construction of efficient-scale facilities.
Vigorous pursuit of cost reductions from experience.
Tight cost and overhead control.
Avoidance of marginal customer accounts.
Cost minimization in all activities in the value chain of the firm, such as R/D, service, sales force, and advertising.
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Sponsorships and event-marketing have increased in popularity during the past decade due to their potential to:
A) produce pro-active damage control mechanisms B) boost sales and profits C) reach consumers on a one-to-one basis D) accelerate new product development
Red Sunset Co. manufactures mobile phones and wants to add a new model to its current line of products. The firm has estimated that the new phone’s selling price will be $80 and that variable costs would represent 65% of the sale price. Fixed operating costs are estimated to be $15M and the firm’s marginal tax rate is expected to remain at 35%. The firm also has forecasted that interest expenses associated with the new chip will reach $5M. The firm has 5M of common shares outstanding and forecasts a total preferred dividend payment of $200,000 for the next year. If Red Sunset Co. expects to sell 1M units of the new phone, then:
a) Create an income statement with the previous information. b) Calculate the operating break-even point in both units and dollars. c) How many units would Red Sunset Co. need to sell in order to achieve earnings, before interest and taxes of $2M? d) Calculate the degree of operating, financial, and combined leverage. e) Use the Goal Seek tool to determine the number of units that would allow Red Sunset Co. to break even in terms of its net income and the selling price to break even in terms of earnings before taxes. Also, determine with the same tool how much preferred dividends the firm would need to pay to keep a degree of financial leverage of 2.
A.J. Ryan bought 500 shares of Google at $364.55 per share. Assuming no commission, what did Ryan spend?
A. $182,275 B. $154,820 C. $86,455 D. $173,275
Fabert Corporation uses the weighted-average method in its process costing system. The Assembly Department started the month with 16,000 units in its beginning work in process inventory that were 40% complete with respect to conversion costs. An additional 60,000 units were transferred in from the prior department during the month to begin processing in the Assembly Department. During the month 65,000 units were completed in the Assembly Department and transferred to the next processing department. There were 11,000 units in the ending work in process inventory of the Assembly Department that were 50% complete with respect to conversion costs. What were the equivalent units for conversion costs in the Assembly Department for the month?
A. 64,100 B. 55,000 C. 65,000 D. 70,500