Taxes influence business decisions such as where a business should locate or how a business should be structured.
Answer the following statement true (T) or false (F)
True
You might also like to view...
Hancock Company manufactures and sells two lines of furniture, case goods and upholstery. During the most recent accounting period, the Case Goods and Upholstery Divisions sold 15,000 and 2,000 units, respectively. The company's most recent financial statements are shown below: (Do not round intermediate calculations.) Case Goods UpholsterySales$1,600,000 $400,000 Less cost of goods sold: Unit-level production cost 1,000,000 240,000 Depreciation, production equipment 240,000 60,000 Gross margin$360,000 $100,000 Less operating expenses: Unit-level selling and administrative costs 60,000 50,000 Corporate-level facility expenses (fixed) 52,000 52,000 Net income (loss)$248,000 $(2,000)If unit sales for both divisions
increased 10%, the company would report which of the following? A. A $52,000 increase in net income for the Upholstery Division B. A net income for the Upholstery Division of $9,000 C. A 10% increase in total net income of the company D. A decline in profit for the Upholstery Division.
Alan is the lead attorney representing StoneWork, Inc. and he is in back-and-forth discussions with parties, inside as well as outside the firm, to finalize a contract with J. R. Jones Realty. Alan knows that, in his role as ________, he is making important business decisions for StoneWork.
A. negotiator B. liaison C. leader D. spokesperson E. monitor
Buffington, Inc. produces a number of components that are used in home theater systems. Mike Boston, head of the company's market research department, has identified the need for a new component that will most likely sell for $75. Projected volume levels are anticipated to reach 28,000 units in the first year, as several firmly entrenched competitors will be introducing a similar product in the not-too-distant future.Conversations with Buffington's engineers and reviews of cost accounting data related to similar products that the company manufactures resulted in the following cost estimates for the new component:Direct materials$18Direct labor36Manufacturing overhead16Selling and administrative 5Buffington currently uses cost-plus pricing and adds a 20% markup on total production cost to
arrive at what is normally a competitive selling price.Required:A. What is the anticipated selling price of the new component if Buffington uses its current pricing policy? What difficulties, if any, might the company face in the marketplace?B. Assume that Buffington decides to switch to target costing. What price would the company charge for the new component?C. With the switch to target costing, what would Buffington have to do to the component's manufacturing cost to achieve the normal profit margin on sales? Be specific and show calculations. What will be an ideal response?
A furniture store has set aside 800 square feet to display its sofas and chairs. Each sofa utilizes 50 sq. ft. and each chair utilizes 30 sq. ft. At least five sofas and at least five chairs are to be displayed
a. Write a mathematical model representing the store's constraints. b. Suppose the profit on sofas is $200 and on chairs is $100 . On a given day, the probability that a displayed sofa will be sold is .03 and that a displayed chair will be sold is .05 . Mathematically model each of the following objectives:1 . Maximize the total pieces of furniture displayed.2 . Maximize the total expected number of daily sales.3 . Maximize the total expected daily profit.