You work in the marketing department of Unilever. Unilever recently announced that it was going to delete certain brands that were no longer meeting profit expectations. You are part of the team to help in this product deletion process. You and your team get together to discuss a brand of soap that has seen sales decrease in recent years. The team discusses how you should delete the product. Each of you writes down comments regarding your thoughts about the brand. The comments can be summed up as follows: "The brand is not doing well, but it still has a loyal following among some consumers." "I think this brand still has some strengths left." Based on these comments, which product deletion strategy should the company adopt?
A. Phase-out
B. Drop-down
C. Run-out
D. Immediate drop
E. Close-out
Answer: C
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DIY Fasteners Company decides to consolidate its operations with Evergrip Studs, Inc, to form Fit-Rite Bolts & Screws Inc The articles of consolidation differ from Fit-Rite's articles of incorporation. The articles A) are replaced by Evergrip's articles of incorporation
B) are replaced by the articles of consolidation. C) effectively prevent the consolidation. D) prevail.
The Draper Corporation is considering dropping its Doombug toy due to continuing losses. Data on the toy for the past year follow: Sales of 15,000 units$150,000 Variable expenses 120,000 Contribution margin 30,000 Fixed expenses 40,000 Net operating loss$(10,000)If the toy were discontinued, Draper could avoid $8,000 per year in fixed costs. The remainder of the fixed costs are not avoidable.Suppose that if the Doombug toy is dropped, the production and sale of other Draper toys would increase so as to generate a $16,000 increase in the contribution margin received from these other toys. If all other conditions are the same, the financial advantage (disadvantage) from discontinuing the production and sale of Doombugs would be:
A. $28,000 B. ($2,000) C. $14,000 D. ($6,000)
Dreammaker KitchensThe following information relates to the company's November bank reconciliation: Bank statement balance$10,700 Unadjusted cash balance from the company's records? Deposit in transit2,100 Outstanding checks1,200 Bank service charges300 Interest earned on the bank account100 Customer's NSF check returned by the bank400 Refer to Dreammaker Kitchens. As a result of the bank reconciliation process, what is the net increase or decrease in cash which must be recorded on the company's books?
A. $100 decrease B. $300 decrease C. $400 decrease D. $600 decrease
Karl is an employee of Cars-R-Us. As part of their employment agreement, Cars-R-Us loans Karl $1,000,000 interest-free to assist in the purchase of a car dealership. Assume the federal rate of interest is 8%. What is the tax treatment of the loan? I. The arrangement has no tax consequences to Karl. II. Cars-R-Us is deemed to have paid Karl compensation of $80,000. III. Karl is deemed to have
paid Cars-R-Us $80,000 of interest. IV. Cars-R-Us' net income tax effect is zero due to this arrangement. a. Only statement I is correct. b. Only statements I, II, and IV are correct. c. Only statement III is correct. d. Only statements I, II, and III are correct. e. Only statements II, III, and IV are correct.