Answer:
a. The contribution margin per unit will decrease
b. The contribution margin ratio will stay unchanged.
Explanation:
To illustrate this, let's consider:
Unit selling price = $100
Unit variable cost = $60
Thus,
Contribution margin per unit = $40
Contribution margin ratio = $40 / $100 = 0.40, or 40%
<pIf both the selling price and variable costs fall by 5% while fixed costs remain constant, we obtain:
Unit selling price = $100 * 95% = $95
Unit variable cost = $60 * 95% = $57
Contribution margin per unit = $95 - $57 = $38
Contribution margin ratio = $38 / $95 = 0.40, or 40%
Therefore, it can be seen that the contribution per unit declines from $40 to $38, whereas the contribution margin ratio remains constant at 40%.
If I worked at a store, I would suggest, "Could you please provide your phone number? That way, I can reach you once the item is restocked or if it goes on sale again, alright?"
As a bystander, I'd likely walk away or try to assist in some manner. If the customer were a child, I would probably just give them the item.
Answer:
D) readily available substitute products.
Clarification:
Porter's five forces cover the following aspects
- Threat of new entrants
- Supplier bargaining power
- Buyer bargaining power
- Substitution threats
A) low significance of the buyer to the supplier group.
True. Buyers possess less bargaining leverage when compared to suppliers.
B) significant differentiation by suppliers.
True. Greater differentiation offers a competitive edge and promotes market rivalry.
C) control exerted by a small number of suppliers.
True. This falls under the threat of new entries since a limited number of suppliers create barriers such as capital and licensing needs to deter new competitors.
D) readily available substitute products.
False. This suggests an abundance of suppliers ready to provide alternatives, weakening supplier power.
Required information Problem 20-1A Production cost flow and measurement; journal entries LO P1 [The following data pertains to the questions below.] Sierra Company produces soccer balls in two sequential processes: Cutting and Stitch production starting at the beginning of the Cutting process. Here's the data available: Raw materials inventory Work in process inventory-Cutting Work in process inventory Stitching Finished goods inventory Beginning Inventory $16,000 63,500 83,300 24, leo Ending Inventory $17,950 70,500 66,700 12,250 The following additional information elaborates on the production activities of the company for May Direct materials Raw materials purchased on credit Direct materials used in cutting Direct materials used in stitching 5 35.000 22,250 Direct Tab 12 of 2 Next > Saved Check my work mode: This indicates correctness or errors in your work The subsequent information describes production activities in the company: Direct materials Raw materials purchased on credit Direct materials used in Cutting Direct materials used in stitching $ 35,000 22,250 Direct labor Direct labor-Cutting Direct labor-Stitching Total factory payroll paid (in cash) $ 16,699 66,490 138, 40e Factory Overhead (Actual costs) Indirect materials used Indirect labor used Other overhead costs $ 10,800 55,400 49,000 Raw materials purchased on credit Direct materials used in Cutting Direct materials used in stitching $ 35,00 22,250 Direct labor Direct labor-Cutting Direct labor-Stitching Total factory payroll paid (in cash) $ 16,689 66,480 138,400 Factory Overhead (Actual costs) Indirect materials used Indirect labor used Other overhead costs $ 10,800 55,400 49,000 Factory Overhead Rates Cutting (150% of direct materials used) Stitching (120% of direct labor used) Sales $336,000 Piex1 2 of 2 Completeu su Tor. It does Required information RM - April 30 RM purchases RM - May 31 Raw Materials (RM). 16.000 Indirect materials employed 35.000 Direct materials - Cutting 17.950 22 250 10.800 35.900 219 430 WIP - April 30 Direct materials - Stitching Direct labor - Cutting Overapolled overhead - Cutting % $ Work in Process (WIP) Stitching 83,300 Cost of goods sold 66,400 56,750® 79,680 66,700 Factory Overhead 1 2 of 2 Next > id Windows to be a 9 W WORMode
