- (Topic 1)
Which one or the following costs Is a variable product cost?
Correct Answer:C
- (Topic 1)
The human resources manager of BankUS has noted mat me company s employee turnover has increased. He has also had his budget cut, and will have to reduce training for new associates. He has a meeting scheduled with the CFO lo go over risks that his department faces. What should the human resources manager tell the CFO about risk?
Correct Answer:A
CORRECT TEXT - (Topic 2)
Explain the impact of a sales price adjustment on AMI??s operating income if AMI?? s operating leverage is higher than that of other companies in its market.
Essay
Food Depot Ltd, (FDL) is a privately-held company that provides catering services to airlines and operates several restaurant chains including fast food, casual dining, and fine dining restaurants, FDL has been profitable in recent years and has a very strong cash
position. FDL's newest division. Food_TO-Go is an online meal ordering and delivery platform acquired by FDL two year ago.
In 20X7, sales for the entire company were $1 billion, with 50% of the business coming from the Airline Catering division. FDL is the country ??s leading airline catering services provider and control 60% of the market share. However, the outlook of the airline catering industry is gloomy. The compound annual growth rate of the industry for the past five years was only 0.5% as airline networks have increasingly dropped catering on short domestic flights.
The Food-To-division only contribution 5% of FDL??s total sales in 20X7 and is far behind in competing for marketing for market share of the online meal ordering and delivery industry, it is estimated that Food-To-Go??s sales were only 20% of the industry leader??s sales. However, the outlook for the online meal ordering and delivery services industry is bright. The compound annual growth rate of the industry since it started three years ago was 50%. It is estimated the rapid growth of the industry will continue in the foreseeable future.
Susan Willey, the head of Food-To-Go, does not agree that the Airline Catering division is the best-performing division in the company. Wiley argues that ber division bad the highest ROI in 20X7, and it deserves more capital finding. FDL??s requested rate of return is 12%. The selected financial data for the Airline Catering division and Food-To-Go division in 20X7 are as follow (in $ millions)
Solution:
If the company win adjust the selling price that is if it reduces me profit margin will decrease as more of its costs are fixed rather than variable in nature hence it has greater sensitivity to increase in sales price.
Does this meet the goal?
Correct Answer:A
- (Topic 1)
Employee performance review and development systems must be fully aligned with the requirements for ethical conduct Ethical expectations should be included in
Correct Answer:B
- (Topic 1)
A company produces 10,000 units of Product A monthly at the costs shown below.
The company estimates that 30% of the fixed overhead costs allocated to Product A are avoidable if the company chooses to outsource the production If the company purchases Product A from an outside supplier for $18 per unit what would be the net effect on its operating income?
Correct Answer:C