Data concerning Cavaluzzi Corporation's single product appear below: Per UnitPercent of SalesSelling price$110 100%Variable expenses 44 40%Contribution margin$66 60%Fixed expenses are $440,000 per month. The company is currently selling 8,000 units per month.Required: The marketing manager believes that an $8,000 increase in the monthly advertising budget would result in a 150 unit increase in monthly sales. What should be the overall effect on the company's monthly net operating income of this change?
What will be an ideal response?
| Increase in total contribution margin ($66 per unit × 150 units) | $ | 9,900 |
| Less incremental fixed expenses | 8,000 | |
| Change in net operating income | $ | 1,900 |
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What will be an ideal response?
An auditor's analytical procedures performed during the overall review stage indicated that the entity's accounts receivable balance had doubled since the end of the prior year. However, the allowance for doubtful accounts as a percentage of accounts receivable remained about the same. Which of the following explanations most likely would satisfy the auditor?
A. The entity liberalized its credit standards in the current year and sold much more merchandise to customers with poor credit ratings. B. The entity opened a second retail outlet in the current year and its credit sales approximately equaled the older, established outlet. C. A greater percentage of accounts receivable were currently listed in the "more than 90 days overdue" category than in the prior year. D. Twice as many accounts receivable were written off in the prior year than in the current year.
The Uruguay Round of trade negotiations lowered
a. trade sanctions levied against South Africa. b. trade sanctions levied against the Soviet Union. c. tariffs but not nontariff trade barriers. d. tariffs as well as nontariff trade barriers.
There are two major challenges for managing your negotiating team: aligning the multiple and often conflicting interests of members within the team and implementing ________ among team members to follow the strategy once the negotiation begins.
Fill in the blank(s) with the appropriate word(s).