Answered: Which of the following are inversely…

Which of the following are inversely related to increases in a firm's current assets?I. Reorder costsII. Shortage costsIII. Restocking costsIV. Carrying costs

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter7: Variable Costing For Management analysis

Section: Chapter Questions

Problem 10E

See similar textbooks

Related questions

Q: The ratio which indicates the profit that a company makes after paying variable costs of production…

A: Variable costs are those costs which changes with change in level of activity like all operating…

Q: A responsibility center structure that considers investments made by the operating segments by using…

A: Residual income means income will receive after completion of the work also. Example : Rental…

Q: Which of the following is a capital budgeting method? A. net present value B. inventory turnover…

A: Please find the answer to the above question below:

Q: What is Re-order quantity? What is Re-order level? What is Maximum stocklevel? With respect to…

A: Inventory management consist of various levels namely re-order level, re-order quantity, maximum and…

Q: Why would reclassifying period costs as product costs increase this period’s reported earnings?

Q: the dollar amount of sales needed to achieve a target operating income is computed by what

A: The break even sales units are the sales where business earns no profit no loss.

Q: Current assets minus current llabilities Is: Multiple Cholce Working capital. Financial leverage.…

A: Current assets means cash and cash equivalent and other assets which are realisable with in normal…

Q: Does an increase in the operating profitability ratio always causean increase in the value of…

A: Answer: Usually, company’s operating profitability ratio’s measure how far management will strive to…

Q: What is operating profitability ratio (OP)?

A: These ratios evaluate a firm’s ability to earn profits. They help the stakeholders of the company to…

Q: What analysis ensures that the income for the firm will cover its variable costs? a. ratio…

A: Companies need to analyse how many products to sell or how much sales to make in a financial year to…

Q: 1. Based on segment margin and average assets, compute the profit margin. 2. Based on segment…

A: Sales 9,000,000 Less: Variable costs 3,650,000 Contribution margin 5,350,000 Less: Direct…

Q: A decrease in Selling and Administrative Expenses woulddirectly impact what ratio?a. Fixed asset…

A: Answer:

Q: Which items comprise operating current assets? Why is itreasonable to assume that they grow…

A: Operating current assets are the short-term assets utilized to promote a business's processes

Q: When calculating a company’s WACC, should book value, market value, or targetweights be used?…

A: A company often raises money from various sources such that it has to provide a return in the form…

Q: Define each of the following terms: f. Full capacity sales; target fixed assets to sales ratio;…

A: Definition: Assets: These are the resources owned and controlled by business and used to produce…

Q: Describe the specific process required by the unit cost comparison for the use of annual worth…

A: A unit cost comparison is required for the use of annual worth analysis because companies often…

Q: Which ratio would a company most likely use to measure its ability to meet short-termobligations?A .…

A: company most likely use to measure its ability to meet short-termobligations :

Q: Define current operation income?

A: Current operation income otherwise called as operating income.Operating Income: Operating income is…

Q: what is the segment margin of Department A and B?

A: Formula: Segment Margin= Segment Revenue- Segment Cost Segment Margin (%)= Segment Revenue-Segment…

Q: When might a reduction in operating expense as a percentage of sale denote a short term gain or the…

A: Operating expenses are those expenses which are related to the operations of the business. It…

Q: Which of the following is the indicator of the rate at which company is earning profit? Select one:…

A: Ratio Analysis Each items in the financial statements of an enterprise is compared by using ratio…

Q: Is there a point in a cost-volume-profit analysis when the company is expected to profit?

A: Is there a point in a cost-volume-profit analysis when the company is expected to profit? Answer:…

Q: What are some pros and cons of holding high levels of current assets in relation to sales? Use the…

A: The DuPont equation depicts the return on equity for a firm taking into consideration the firm’s…

Q: What concept relates to the proportionate savings in costs gained when levels of production are…

A: Lets understand the meaning of all the terms given in the question. Accounting profit is a terms…

Q: In the cost-volume- profit graph (above), what is represented by the point marked "A"?…

A: Introduction Cost volume profit (CVP) In CVP analysis if cost is equal to the sales then there is…

Q: How does assuming that operating activity occurs within a relevant range affect cost-volume-profit…

A: C-V-P analysis is used to explain the relationship among the volume of production, costs and…

Q: How can we apply Annual-Worth Analysis for the calculation of Unit-Profit or Unit-Cost Calculation?

A: Annual worth analysis is an analysis of value of an investment on an annual basis. It measures the…

Q: Example of the cost center responsiblity is O 1. Investing in long term assets O2. Purchasing of…

A: Investing in long-term assets is not the cost for the company and the purchasing of the inventory is…

Q: . Which of the following is TRUE about contribution margin? Select one: A. The amount remaining…

A: 1. Which of the following is TRUE about contribution margin? Select one: A. The amount remaining…

Q: The invested capital employed turnover rate would include Profit in the denominator Sales in the…

A: The ratio analysis is used to measure the financial performance of the business. It helps management…

Q: How can the expected sales for a product group be converted into ex

A: A product group is a collection of various products, classes of products, segments, etc which are…

Q: Which of the following statements is true regarding the lower of cost or net-realizable value (NRV)?…

A: Inventory means the stock of goods in which the businessmen deals. Every company wants to maintain…

Q: Why is the original cost estimate corrected based on buyout data?

A: Buyout process : When a company acquires the controlling interest in another company,…

Q: Operating leverage measures the: Change in profit when sales changes. Change in Contibution when…

A: Solution: Operating leverage = Contribution margin / Net income Therefore Operating leverage…

Q: Which of the following equations can be used to compute a firm’s magnitude of operating leverage?…

A: In terms of accountancy, degree (magnitude) of operating leverage (DOL) can be defined as the ratio…

Question

Which of the following are inversely related to increases in a firm's current assets?
I. Reorder costs
II. Shortage costs
III. Restocking costs
IV. Carrying costs

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Introduction

VIEW

The correct options are I, II and III.

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

Why is the operating return on assets ratio also referred to as the operating returnon investment?
Which of the following are inversely related to increases in a firm's current assets? I. Reorder costs II. Shortage costs III. Restocking costs IV. Carrying costs A. II, III, and IV only B. I and III only C. I, III, and IV only D. I, II, and III only
What is economic surplus defined as? A) The total revenue earned by a firm B) The difference between total revenue and total costs C) The total amount of money available for investment D) The value of goods produced in excess of demand Correct Answer: B) The difference between total revenue and total costs
How change in activity(sale) affect the contribution margin and net operating income?
What does ROE depend on according to the DuPont raito? Profit Margin Asset Turnover Equity Multiplier All of the above
A. Which of the following is most closely associated with the cost of using assets? a. Asset utilization b. Sales revenue c. Proportion of debt and equity d. Average price B. Which of the following is most closely associated with the return on management’s use of assets? a. Cost of capital b. Mix of equity types c. Prime lending rate d. # of products sold
What is operating profitability ratio (OP)?
d. Calculate the Efficiency ratio which includes the sales to total assets ratio, operating return on assets, return on assets, ROA Model, return on equity, and ROE Model
Which method results in a more realistic amount for income because it matches the most current costs against revenue? a.FIFO b.Weighted average cost c.Specific identification d.LIFO
What analysis ensures that the income for the firm will cover its variable costs? a. ratio analysis b. financial analysis c. cost volume profit analysis d. sales analysis
Total Present value minus the total cost incurred for the business operation is a part of a. Profit Maximization b. Sales Maximization c. Wealth Maximization d. Inventory Maximization
Discuss the following profitability ratios: Profit Margin, ROA-Return on Assets, ROI-Return on Investment, and the Gross Margin.