In setting standards, historical experience is the best source to use when determining the most efficient way to operate
Indicate whether the statement is true or false
False
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Squid Lips, Inc wants to measure the relationship between profitability and the investment made by stockholders. Squid Lips should use the
a. return on stockholders' equity ratio. b. earnings per share. c. profit margin. d. statement of retained earnings.
Managers can use variable costing information for internal decision making, but they must use absorption costing for external reporting purposes.
Answer the following statement true (T) or false (F)
A buyer for a large sporting goods store chain must place orders for professional footballs with the football manufacturer six months prior to the time the footballs will be sold in the stores. The buyer must decide in November how many footballs to order for sale during the upcoming late summer and fall months. Assume that each football costs the chain $45. Furthermore, assume that each pair can be sold for a retail price of $90. If the footballs are still on the shelves after next Christmas, they can be discounted and sold for $35 each. The probability distribution of consumer demand for these footballs (in hundreds) during the upcoming season has been assessed by the market research specialists and is presented below. Finally, assume that the sporting goods store chain must purchase
the footballs in lots of 100 units. Demand (in hundreds) Probability 4 0.30 5 0.50 6 0.20 (A) What is the payoff if the store orders 400 footballs and quantity demanded is 400 footballs? (B) What is the payoff if the store orders 400 footballs and quantity demanded is 500 footballs? (C) What is the payoff if the store orders 400 footballs and quantity demanded is 600 footballs? ?(D) What is the payoff if the store orders 500 footballs and quantity demanded is 400 footballs? ?(E) What is the payoff if the store orders 500 footballs and quantity demanded is 500 footballs? ?(F) What is the payoff if the store orders 500 footballs and quantity demanded is 600 footballs? ?(G) What is the payoff if the store orders 600 footballs and quantity demanded is 400 footballs? ?(H) What is the payoff if the store orders 600 footballs and quantity demanded is 500 footballs? ?(I) What is the payoff if the store orders 600 footballs and quantity demanded is 600 footballs? What will be an ideal response?
The external market price transfer-pricing method can lead to dysfunctional decision-making behavior by managers.
Answer the following statement true (T) or false (F)