Isabella Canton is considering taking a part-time job at a local clothing store. She loves the store and shops there often, but unfortunately, employee discounts are given only to full-time employees. If Isabella takes this job, she would have to withdraw from h Tuesday night basket-weaving class to work. Accepting the job also would mean that Isabella must give up her volunteer work at the local animal sanctuary, an activity she enjoys a great deal. The new job would pay approximately $125 per week but would cost Isabella $15 per week in gas. Isabella would be able to keep her Saturday afternoon job at the library that pays $40 per week. Required: A list of factors Isabella has identified follows. For each one, indicate whether it is relevant or irrelevant to Isabella's decision. 1. The $125 income from the new job. 2. The $40 income from the library The $50 nonrefundable registration fee Isabella paid for the basket-weaving class.
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- 5. A good salesperson can sell $4,000,000 worth of goods, while a poor one can sell only $3,000,000 worth of goods. Job applicants know if they are good or bad, but the fim does not. A fim will offer job applicants a choice between a fixed salary or 25% commission. Assuming risk-neutral salespersons and no opportunistic behavior, what level must the fixed salary be so that the fim can distinguish a prospective good salesperson from a poor one, and thereby avoid hiring a poor one?Frank Pepe’s Restaurant and Pie Shop needs help defining the costs for his business. Frank also wants to know which costs are relevant or irrelevant to his decision making. Identify each cost as relevant or irrelevant. Then identify the type of cost (sunk, fixed, variable, or opportunity). Cost Relevant or irrelevant sunk, fixed, variable, or opportunity Rent baker wages franks culinary school tuition Berries for pies paiting dining area last year franks decision not to attend graduate schooldisplaying at a craft fair, a representative of a mail order catalog company wants to put your product in the catalog. It will pay you $40 and mark up the product to $55 for the catalog. It estimates that your market share could be substantial and should be dependent only on your production output. You decide to quit your real job and devote all your time to making wreaths, but you want to match your current $50,000 salary. You really don’t want to work more than 40 hours per week in actual wreath manufacturing (assume all paperwork, material purchasing, and such takes place beyond those 40 hours). You want four weeks a year for vacation, holidays, and sick days or personal days. Taking into consideration time constraints, the price you will get from the catalog company, and your revised costs, does this make sense? Assume each wreath has $5 costs and takes one hour to construct.
- Superior Markets, Incorporated, operates three stores in a large metropolitan area. A segmented absorption costing income statement for the company for the last quarter is given below: Sales Cost of goods sold Gross margin Selling and administrative expenses: Selling expenses Administrative expenses Total expenses Net operating income (loss) Selling expenses: Sales salaries Direct advertising General advertising* Store rent Depreciation of store fixtures Delivery salaries Depreciation of delivery equipment Total selling expenses Superior Markets, Incorporated Income Statement For the Quarter Ended September 30 Total $ 3,240,000 1,789,776 1,450,224 Administrative expenses: Store managers' salaries General office salaries* Insurance on fixtures and inventory Utilities Employment taxes General office-other* 882,360 413,640 1,296,000 $ 154,224 Total administrative expenses *Allocated on the basis of sales dollars. a. The breakdown of the selling and administrative expenses that are shown…Fanning Construction Company is a building contractor specializing in small commercial buildings. The company has the opportunity to accept one of two Jobs; it cannot accept both because they must be performed at the same time and Fanning does not have the necessary labor force for both jobs. Indeed, it will be necessary to hire a new supervisor If either job is accepted. Furthermore, additional Insurance will be required if elther job is accepted. The revenue and costs associated with each job follow. Cost Category Contract price Unit-level materials. Unit-level labor Unit-level overhead Supervisor's salary Rental equipment costs Depreciation on tools (zero market value) Allocated portion of companywide facility-sustaining costs Insurance cost for job Complete this question by entering your answers in the tabs below. Required A Required a. Assume that Fanning has decided to accept one of the two Jobs. Fill in the information relevant to selecting one job versus the other. Recommend…Ellie now had two offers to think about. Her initial reaction was to turn down the special request for 25,000 brochures at $10 per 100. Especially as she did not believe Tyco would realize any repeat or future business from the customer. She also needed to understand her costs versus the cost offered by the small shop to increase Tyco's printing capacity by outsourcing. Should she tell the small shop about the special order request and let them work it out themselves? They might both get what they needed.
- P4.6 (LO 1, 2, 5), s Excel Maddie, the owner of a used car dealership, is working on compensation plans for her employees. She is trying to evaluate how a commission-based versus salary-based workforce would affect her bottom line. In considering her options, she finds basic financial information of two companies with similar year-end performance but different compensation plans-perfect examples to help her with her evaluation! Company X uses a commission-based approach, where its sales staff operates exclusively on commission. Com- pany Y, on the other hand, pays its sales staff a flat salary with no commission. Here are the basics for each company. Company X Company Y Current volume 10,000 units 10,000 units Selling price $ 50 $ 50 Variable cost per unit $ 20 $ 10 Fixed costs $100,000 $200,000 Required a. Present a contribution margin income statement for each company at its current volume of sales, and calculate the degree of operating leverage (DOL) for each. b. Utilizing the DOL…Suppose Frances earns $825 per week working as a programmer for PC Pros. She uses $9 to buy a box of aspirin at Pillmart Pharmacy. Pillmart Pharmacy pays Dmitri $450 per week to work the cash register. Dmitri uses $175 to purchase software from PC Pros. Identify whether each of the following events in this scenario occurs in the factor market or the product market. Event Factor Market Product Market Frances spends $9 to buy a box of aspirin. Frances earns $825 per week working for PC Pros. Dmitri spends $175 to purchase software from PC Pros. Which of the elements of this scenario represent a flow from a firm to a household? This could be a flow of dollars, inputs, or outputs. Check all that apply. a. Frances's labor b. The $450 per week Dmitri earns working for Pillmart Pharmacy c. The aspirin Frances receives d. The $175 Dmitri spends to purchase software from PC ProsAfter reviewing financial reports of her company's daycare service, Camila determines it should be closed due to a loss. Revenues $120195 Variable costs $47953 Traceable (avoidable) fixed costs $70095 Allocated corporate overhead $45995 What would be the impact to net income of closing the daycare? State loss as negative, gain as positive. Round only your final answer to the nearest dollar.
- Roxy Theatre is a monopoly. Roxy discovers that at the price that maximizes its profit, seniors are not coming to the theatre. So Roxy conducts a survey. The table reveals the results of the survey. Roxy decides to price discriminate among patrons who attend on weekends and those who attend on weekdays. Price (dollars per ticket) Weekends Quantity demanded (tickets per week) Weekdays 18.00 0 15.00 100 0 12.00 200 0 If the marginal cost of a show is $6.00, what price does Roxy charge on weekdays and what price does Roxy change on weekends to maximize profit? 9.00 300 0 6.00 300 200 3.00 300 300 If the marginal cost of a show is $6.00, Roxy will maximize profit by charging on weekdays and charging. a ticket on the weekend. a ticketDavid Kelley is considering the implementation of an incentive wage plan to increase productivity in his small manufacturing plant. The plant is nonunion, and employees have been compensated with only an hourly-rate plan. Julie Phelps, Vice President–Manufacturing, is concerned that the move to an incentive compensation plan will cause direct laborers to speed up production and, thus, compromise quality. Step 1 - With that information in mind, discuss the following questions. Your posting should be at least 500 words* in length. This means you should elaborate on your answers, not simply answer each question with one or two words. You should also reference information already learned in our studies. How might Kelley accomplish his goals while alleviating Phelps’ concerns? Does the compensation have to be all hourly rate or all incentives? Can incentive compensation also apply to service businesses?Many small businesses have to squeeze down costs any way they can just to survive. One way many businesses do this is by hiring workers as independent contractors rather than as regular employees. Unlike rules for regular employees, a business does not have to pay social security (FICA) taxes and unemployment insurance payments for independent contractors. Similarly, it does not have to withhold federal, state, or local income taxes or the employee’s share of FICA taxes. The IRS has a 20-factor test determining whether a worker should be considered an employee or a contractor, but many businesses ignore those rules or interpret them loosely in their favor. When workers are treated as independent contractors, they do not get a W-2 form at tax time (they geta 1099 instead), they do not have any income taxes withheld, and they find themselves subject to self-employment taxes, by which they bear the brunt of both the employees and the employer’s share of FICA taxes. Requirements…