Describe the income statement and the relation between revenues, expenses, and net income or loss.
What will be an ideal response?
The income statement describes a company's revenues and expenses along with the
resulting net income or loss over a period of time due to earnings activities. Revenues are the
increases in equity from sales of products and services to customers. Expenses are the costs of
providing products and services to customers. When revenues exceed expenses, net income
occurs. When expenses exceed revenues, a net loss occurs.
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In a multi-step income statement the dollar amount for income from operations is always the same as net income
Indicate whether the statement is true or false
A restaurant runs a special promotion on lobster and plans to sell twice as many lobsters as usual. When this large order is sent to the distributor, the distributor assumes the large size is a trend, not a one-time event. The distributor therefore places an even larger order with the lobsterman. This behavior is the result of which of the following?
A) double marginalization B) the bullwhip effect C) CPFR D) postponement E) vendor-managed inventory
A company estimates the following expenditures: preferred dividends paid of $22,200; wages paid to workers of $49,600; overhead costs of $24,300; raw materials of $45,000; shipping costs of $12,100. What are the total production costs?
A) $131,000 B) $134,500 C) $142,100 D) $153,200
Which of the following illustrates a practice that can dramatically reduce supply chain costs?
A) a supplier company depending on the sales of a market leader to supply products accordingly B) a company replacing its supplier with another larger and more competitive supplier C) a company supplying products directly to customers by omitting all middlemen D) a company closely monitoring and tracking each and every inventory in its supply chain