Which of the following would reduce net profit margin but have no effect on gross profit margin? a) Reducing the commission rate paid to salesmen. b) Negotiating a lower purchase price for raw materials. c) An increase in IT support costs for the accounting package used. d) Increasing the expected economic lives of machinery used in the production function.
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Which of the following would reduce net profit margin but have no effect on gross profit
margin?
a) Reducing the commission rate paid to salesmen.
b) Negotiating a lower purchase price for raw materials.
c) An increase in IT support costs for the accounting package used.
d) Increasing the expected economic lives of machinery used in the production function.
Step by step
Solved in 2 steps
- Which of the following is a disadvantage of outsourcing? A. freeing up capacity B. freeing up capital C. transferring production and technology risks D. limiting ability to upsize or downsize productionWhen deciding whether to sell as is or process a product further, managers should ignore which of the following? a. The costs of processing the product thus far b. The cost of processing further c. The revenue if the product is sold as is d. The revenue if the product is processed furtherWhich of the following is not a revenue driver factor which affects sales volume for a manufacturing firm? Multiple Choice Price changes. Customer service. Delivery dates. Productivity. Discounts.
- The difference between the average customer’s willingness to pay and the total costs of a product is known as ______. When a company makes a profit, the difference between the price of the product and the cost of production is known as what? Value creation and value capture are key concepts for which parts of business? If a company innovates in a way that reduces its production costs without affecting any features of the product, would that create value? Suppose a price war was to erupt in the airline market, which causes prices for flights to decline, but affected nothing else about the industry. Would this change the value created by airlines? Suppose a price war was to erupt in the airline market, which causes prices for flights to decline, but affected nothing else about the industry. Would this change the value captured by airlines? Please solve all part and do not give solution in image format thankuThe production manager wants to achieve real and permanently decrease in the unit cost of the product. As you are the cost accountant of the company, which of the following concepts explains about real and permeant decrease in the unit cost of the product? a. Cost estimation b. Cost analysis c. Cost control d. Cost reductioWhat concept relates to the proportionate savings in costs gained when levels of production are increased: A) Accounting profit. B) Economies of scale. C) Marginal costs. D) Barriers to entry. E) Economic profit. The benefit lost when choosing one option precludes receiving the benefits from an alternative option was referred to as: A) Irrelevant costs. B) Lost costs. C) Alternative costs. D) Opportunity costs. E) Sunk costs.
- In an effort to achieve short-run profit maximization, a company that faces constraints, such as a shortage of labor, should prioritize the sale of the product with O the highest selling price per unit of constraining factor. O the lowest cost per unit of constraining factor. O the highest contribution margin per unit. O the highest contribution per unit of constraining factor.Using the revenue per employee ratio as an indicator for productivity will lead to outsourcing of personnel, even when it increases cost.True or false? And why?What is downsizing? A. An integrated approach configuring processes, products, and people to match costs to the activities that need to be performed for operating effectively and efficiently in the present and future. B. A comparison of the quantity of output produced with the quantity of an individual input used. C. The amount of productive capacity available over and above the productive capacity employed to meet customer demand in the current period. D. An organization's ability to achieve lower costs relative to competitors through productivity and efficiency improvements, elimination of waste, and tight cost control.
- The contribution margin approach helps managers in short-term decision making because it A. reports costs and revenues at present value B. reports only mixed costs C. treats fixed manufacturing overhead as product costs D. isolates costs by behaviorIn making short-term business decisions, what should you do? a. Use a traditional costing approach. b. Focus on total costs. c. Separate variable from fixed costs. d. Focus only on quantitative factors.Which of the following statements is/are true regarding the impact of a company's cost structure? Cost structure can have a significant impact on a company's profitability By outsourcing production, companies generally reduce fixed costs, which will impact their cost structure A higher contribution margin ratio indicates a larger reliance on fixed costs relative to variable costs Companies with a greater reliance on variable costs will have a higher margin of safety ratio All of the above statements are true