Ali had previously calculated the Economic Order Quantity required to efficiently control costs at his company. His calculations

<span>This is an instance of functional departmentalization. This principle allocates each task to its respective functional unit based on the specific activities they carry out. However, a downside is that this often leads to excessive bureaucracy and hinders the overall decision-making process of the organization.</span>

Answer:

$288,000

Explanation:

Provided data includes:

Cost markup rate = 25%

Available inventory account balance =  $440,000

Purchases total $344,000

Returned purchases amount to $16,000

Thus, Net purchase = total purchases - purchase returns

= $344,000 - $16,000 = $328,000

Sales executed during March total $600,000

Accordingly,

cost of products = 600,000 / 1.25 = $480,000

Therefore,

inventory cost = Available account balance + Net purchases - cost of sold products

or

inventory cost =  $440,000 + $328,000 - $480,000 = $288,000

a. March 2 Debit: Accounts Receivable 900,000 Credit: Sales Revenue 900,000 March 2 Debit: Cost of Goods Sold 590,000 Credit: Inventory 590,000 b. March 6 Debit: Sales Returns and Allowances 90,000 Credit: Accounts Receivable 90,000 March 6 Debit: Inventory 62,000 Credit: Cost of Goods Sold 62,000 c. March 12 Debit: Cash 793,800 Debit: Sales Discount 16,200 Credit: Accounts Receivable 810,000

Answer:

1. Here are the factors I would consider:

• Whether the city has my intended market

• If the consumer purchasing behaviors in the area reflect the broader market trends

• Whether advertising costs are manageable.

• If it is not overly exposed to attract competitor attention.

• If demographic variables such as age and ethnicity align with my product.

2. The place I reside is not an ideal test market for this product; it is rural.

Explanation:

Test marketing serves as a tool in new product development aimed at gauging consumer responses to a new entry. It is particularly effective for fast-moving goods.

In choosing a city, I would verify that:

• The city has my target demographic. It's crucial because testing a product in an area where interest is absent wastes resources.

• The purchasing trends of consumers in that area should reflect realistic market expectations.

• Advertising and media expenses should be kept low to optimize resource allocation during test marketing.

• The region shouldn’t attract unwanted attention from competitors who may seize the idea.

• Demographics such as age, gender, and ethnicity should be suitable for the product.

2. Living in a rural area is unfavorable for test marketing because;

• People in urban areas tend to consume fast foods like sandwiches, as they have busy lifestyles. Rural residents generally prefer homemade meals. Therefore, this area is unsuitable for testing because my target consumers are not present.

• Moreover, the prevalent age group in this area skews older, with women who are typically less inclined toward fast foods. This indicates that the demographic is not ideal.

The expenses will be debited while cash will be credited since cash is being spent. Date Account title and explanation Debit Credit 30 August Rent expense $2300 Gas & Electric expense $525 Wages of an employee expense $1750 Cleaning fee $275 Cash account $4850 This journal entry will therefore be recorded by JumpStart on August 30.