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objective 3 9 1 gross margin is a sales revenue less variable costs b sales revenue 4301125

 

Objective 3.9

 

1) Gross margin is ________.

A) sales revenue less variable costs

B) sales revenue less cost of goods sold

C) contribution margin less fixed costs

D) contribution margin less variable costs

2) In the merchandising sector ________.

A) only variable costs are subtracted to determine gross margin

B) fixed overhead costs are subtracted to determine gross margin

C) fixed overhead costs are subtracted to determine contribution margin

D) all operating costs are subtracted to determine contribution margin

 

3) In the manufacturing sector, ________.

A) only variable costs are subtracted to determine gross margin

B) fixed overhead costs are subtracted to determine gross margin

C) fixed overhead costs are subtracted to determine contribution margin

D) all operating costs are subtracted to determine contribution margin

 

4) Contribution margin and gross margin are terms that can be used interchangeably.

 

5) Gross Margin will always be greater than contribution margin.

 

6) Jacob's Manufacturing sales is equal to production.If Jacob's Manufacturing presented a Financial Accounting Income Statement emphasizing gross margin showing operating income of $180,000, a Contribution Income Statement emphasizing contribution margin would show a different operating income.

7) Beta Corp reported the following:

 

Revenues$2,500

Variable manufacturing costs$ 300

Variable nonmanufacturing costs$ 480

Fixed manufacturing costs$ 350

Fixed nonmanufacturing costs$ 270

 

Required:

a.Compute contribution margin.

b.Compute gross margin.

c.Compute operating income.

 

Objective 3.A

 

1) What would be the expected monetary value for Avalia Corp using the probability method?

 

Probability              Cash Inflows

0.20$200,000

0.30$160,000

0.15$120,000

0.35$50,000

A) $40,000

B) $188,000

C) $123,500

D) $60,000

2) Lobster Liquidators will make $500,000 if the fishing season weather is good, $200,000 if the weather is fair, and would actually lose $50,000 if the weather is poor during the season. If the weather service gives a 40% probability of good weather, a 25% probability of fair weather, and a 35% probability of poor weather, what is the expected monetary value for Lobster Liquidators?             

A) $500,000

B) $232,500

C) $267,500

D) $200,000

 

Answer the following questions using the information below:

 

Patrick Ross has three booth rental options at the county fair where he plans to sell his new product. The booth rental options are:

 

Option 1:$1,000 fixed fee, or

Option 2:$750 fixed fee + 5% of all revenues generated at the fair, or

Option 3:20% of all revenues generated at the fair.

 

The product sells for $37.50 per unit. He is able to purchase the units for $12.50 each.

 

3) How many actions and events will a decision table contain?

A) 1 action and 3 events

B) 1 action and 6 events

C) 2 actions and 3 events

D) 3 actions and 6 events

4) Which option should Patrick choose to maximize income assuming there is a 40% probability that 70 units will be sold and a 60% probability that 40 units will be sold?

A) Option 1

B) Option 2

C) Option 3

D) All options maximize income equally.

 

 

 

5) An expected value is the weighted average of the outcomes, with the probability of each outcome serving

as the weight.

 

 

 

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