What is the most frequent internal motive for a strategic alliance

Answer:

C. Cost-volume-profit analysis

Explanation:

Cost-volume-profit analysis (CVP analysis) plays a crucial role in cost management, focusing on the relationship between an organization's financial performance, production volume, and sales of products or services. This analytical approach is also applicable for setting prices.

The assumptions underlying CVP analysis include:

1) Production levels match sales levels, being the sole factor influencing cost and revenue changes for the business. Inventory levels of finished goods remain unchanged.

2) Other factors (like product selling prices, prices of materials and services utilized in production, variable costs per output unit, and labor efficiency) are constant within an acceptable production volume range.

3) The focus of the analysis is limited to a single product or a stable range of products. The sales mix in a multi-product company is steady.

4) Both total costs and revenue exhibit linear characteristics relative to production levels.

The analysis is performed within a reasonable production volume range.

5) All expenses are categorized as either fixed or variable costs.

6) The evaluation is intended for the short term.

7) Fixed costs remain unchanged as production volume varies within an acceptable range, with no structural adjustments occurring.

In summary, we can highlight that this method is the Cost Volume Profit analysis, which evaluates how changes in volume impact profits by examining the varying degrees of costs.

Answer:

a) This policy would be advantageous if the demand for sterile needles has elastic characteristics and the cross-price elasticity of demand linking drugs and sterile needles is high and

positive.

b) This policy would be unfavorable if the demand for sterile needles is characterized as inelastic while the cross-price elasticity between drugs and needles is high and

negative.

Explanation:

a) Under what conditions is this policy viewed as beneficial?

This policy is advantageous when the demand for sterile needles is elastic and the corresponding cross-price elasticity with drugs shows a positive and high relationship.

The elastic demand for sterile needles indicates that the quantity demanded increases more significantly in response to price changes.

The positive cross-price elasticity suggests that as the price of needles decreases, the demand for drugs decreases, assuming they are substitutes. Therefore, as the price of sterile needles approaches zero, the

demand for drugs diminishes.

b) Under what conditions is this policy seen negatively?

This policy turns unfavorable when the demand for sterile needles is inelastic and the cross-price elasticity relating drugs to needles is high and

negative.

An inelastic demand for sterile needles suggests the quantity demanded does not increase much with price reductions.

A negative cross-price elasticity indicates that the two products, drugs and sterile needles, are complements. Thus, as the price of sterile needles drops to zero, the demand for drugs rises.

Answer:

$78,000

Explanation:

For calculating the cost of the ending work in process

To begin, we will calculate the material cost per unit.

Material cost per unit = $220,000 / (40,000+15,000)

Material cost per unit= $220,000 / 55,000

Material cost per unit= $4

Next is to find the conversion cost per unit

Conversion cost per unit= $414,000 / (40,000 + (15,000*40%)

Conversion cost per unit= $414000 / 46000

Conversion cost per unit= $9

Now, it’s time to calculate the total cost per equivalent unit

Total cost per equivalent unit= $4 + $9

Total cost per equivalent unit= $13

Then, the equivalent unit of the ending work in process

Equivalent unit of the ending work in process= 15,000 × 40%

Equivalent unit of the ending work in process= 6,000

Finally, we calculate the cost of the ending work in process

Cost of the ending work in process = 6,000 × $13

Cost of the ending work in process = $78,000

Thus, the cost of the ending work in process is $78,000