A company has the choice of either selling 1,000 unfinished units as is or completing them. The company could sell the unfinished units as is for $4.00 per unit. Alternatively, it could complete the units with incremental costs of $1.00 per unit for direct materials, $2.00 per unit for direct labor, and $1.50 per unit for overhead, and then sell the completed units for $8.00 each. If the company completes the units, what is the impact on income?
A. Income will decrease by $500.
B. Income will increase by $500.
C. Income will increase by $4,000.
D. Income will increase by $8,000.
E. Income will decrease by $4,500.
Answer: A
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Which of the following statements about a manager's worklife is not among the findings of management scholar Henry Mintzberg?
A. Managers work long hours. B. Most managerial tasks require lengthy periods of time for completion. C. Managers rely more on verbal than on written communication. D. Managers work at an intense pace. E. Managers' work is characterized by variety.
Which of the following statements about customer value is most accurate?
A. Research suggests that firms can be most successful by being all things to all consumers. B. It is impossible to place a dollar value on a loyal, satisfied customer. C. Loyal customers are less profitable to firms in the long run since they expect lower prices over time in order to remain loyal. D. Target customers assess customer value in terms of the combination of benefits (quality, convenience, etc.), regardless of the price. E. To create value for targeted buyers, firms must build long-term relationships with them.
According to generally accepted accounting principles, treasury stock usually should be recorded at
A) original issue cost. B) par or stated value. C) cost. D) net realizable value.
In considering equity and debt financing, which of the following statements is generally true?
A) The lower the measure of the long-term debt to equity ratio, the greater the likelihood that the company will have difficulty in meeting its obligation in some future period. B) Interest and dividend payments are not required to be made by the issuing company. C) The higher the measure of the debt to equity ratio, the greater the likelihood that the company will have difficulty in meeting its obligation in some future period. D) Most companies prefer to have no debt and rely exclusively on equity financing.