A dollar saved in purchasing nearly always has a greater impact on profit than an additional...
- A dollar saved in purchasing nearly always has a greater impact on profit than an additional dollar of sales revenue.
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True False |
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What does the profit-leverage effect measure?
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If costs are 80% of sales (and profit is 20%), what is the amount of extra sales needed to equal $1,500 in profit from purchasing cost savings efforts?
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Where does every dollar saved in purchasing go straight to?
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What do purchasing cost reduction efforts tend to reduce?
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Homework Answers
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1) True
2) (d) The amount of sales needed to have the equivalent profit impact as a dollar of cost savings
3) (d) $7,500
4) (c) Operating profit
5) (b) Cost of goods sold
Please please please Up-vote the answer.It really helps me.Thanks!!
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A dollar saved in purchasing nearly always has a greater impact
on profit than an additional...
Every dollar saved in purchasing is equivalent to a dollar of new income. Material cost-savings have...
Every dollar saved in purchasing is equivalent to a dollar of new income. Material cost-savings have a greater influence on the ROA than do sales increases, therefore it is easier for companies to generate cost-savings than to increase market share. To prove the aforementioned statements, use the given information of ABC Company to calculate your answers for the following questions. (Show your calculations) (20 points) Sales $4,900,000 Labor Cost $600,000 Fixed Assets $3,000,000 Overhead Cost $900,000 Inventories $450,000 Materials Cost...
need help with this question The salesforce sold $30M in additional products; purchasing negotiated $10Min material...
need help with this question
The salesforce sold $30M in additional products; purchasing negotiated $10Min material costs savings. If operating profit is 12%, how did their impacts on operating profit compare? 2a. Sales had almost three times the impact on operating b. Sales had slightly more impact on operating profit O c. They had the same impact on operating profit d. Purchasing had slightly more impact on operating profit e. Purchasing had almost three times the impact on operating profit
A 30% gross profit percentage means that: A. for each dollar of sales, the company has...
A 30% gross profit percentage means that: A. for each dollar of sales, the company has a cost of goods sold of seventy cents. B. for each dollar of sales, the company has a gross profit of thirty cents. C. for each dollar of sales, the company has a cost of goods sold of thirty cents. D. A and B
a) Degree of operating leverage = Contribution margin / profit Degree of operating leverage = 15,600,000...
a) Degree of operating leverage = Contribution margin / profit Degree of operating leverage = 15,600,000 / 6,000,000 = 1.625 Sales = 1200000 x 24 = 28800000 Less: Variable cost = 1200000 x 11 = 13200000 Contribution Margin = 28800000 - 13200000 = 15,600,000 Less: Fixed cost = 9,600,000 Profit = 15600000-9600000 = 6000000 b) Break even units Contribution margin per unit = Selling price - variable cost = $24 - $11 = $13 Break even units = Fixed cost...
argentina partners is concerned about the possible effects of inflation on its operations. Saved Help Save...
argentina partners is concerned about the possible effects of
inflation on its operations.
Saved Help Save FINICIJU Piyu UV nuvy BIS IURCE Inryca Argentina Partners is concerned about the possible effects of inflation on its operations. Presently, the company sells 67.000 units for $40 per unit. The variable production costs are $21, and fixed costs amount to $770,000. Production engineers have advised management that they expect unit labor costs to rise by 20 percent and unit materials costs to rise...
Exercise 6-7 Target Profit Analysis (L06-6) Lin Corporation has a single product whose selling price is...
Exercise 6-7 Target Profit Analysis (L06-6) Lin Corporation has a single product whose selling price is $134 per unit and whose variable expense is $67 per unit. The company's monthly fixed expense is $31,750. Required: 1. Calculate the unit sales needed to attain a target profit of $8,450. (Do not round intermediate calculations.) 2. Calculate the dollar sales needed to attain a target profit of $9,700. (Round your intermediate calculations to the nearest whole number.) 1. Units sales to attain...
Saved points QUESTION 2 Which of the following defines gross profit? a. The amount remaining from...
Saved points QUESTION 2 Which of the following defines gross profit? a. The amount remaining from the sales value after deducting interest expense. b. The amount remaining from the sales value after deducting overhead costs c. The amount remaining from the sales value after deducting the cost of goods sold. d. The amount remaining from the sales value after deducting depreciation and Amortization
1-The single most important cost savings available from centralization come from ________. a. Spend aggregation b....
1-The single most important cost savings available from centralization come from ________. a. Spend aggregation b. Decentralization c. Focused target markets d. Standardization e. All of the above 2-To enhance the supply function’s influence on key decisions, you need to know how your internal customers perceive purchasing’s performance. The best way to determine perceptions is to a. Review past purchases b. Ask them c. Validate costs d. Compare with similar market 3-To help your firm compete, you must organize supply...
32.Abbott Company is considering purchasing a new machine to replace a machine purchased one year ago...
32.Abbott Company is considering purchasing a new machine to replace a machine purchased one year ago that is not achieving the expected results. The following information is available: Expected maintenance costs of new machine $12,000 per year Purchase price of existing machine $150,000 Expected cost savings of new machine $20,000 per year Expected maintenance costs of existing machine $8,000 per year Resale value of existing machine $35,000 Which of these items is irrelevant? a. Expected resale value of existing machine...
Argentina Partners is concerned about the possible effects of inflation on its operations. Saved Help Save...
Argentina Partners is concerned about the possible effects of
inflation on its operations.
Saved Help Save Required: a. Compute the volume in units and the dollar sales level necessary to maintain the present profit level, assuming that the maximum price increase is implemented. b. Compute the volume of sales and the dollar sales level necessary to provide the 7 percent increase in profits, assuming that the maximum price increase is implemented. C. If the volume of sales were to remain...
need help with this question
The salesforce sold $30M in additional products; purchasing negotiated $10Min material costs savings. If operating profit is 12%, how did their impacts on operating profit compare? 2a. Sales had almost three times the impact on operating b. Sales had slightly more impact on operating profit O c. They had the same impact on operating profit d. Purchasing had slightly more impact on operating profit e. Purchasing had almost three times the impact on operating profit
argentina partners is concerned about the possible effects of
inflation on its operations.
Saved Help Save FINICIJU Piyu UV nuvy BIS IURCE Inryca Argentina Partners is concerned about the possible effects of inflation on its operations. Presently, the company sells 67.000 units for $40 per unit. The variable production costs are $21, and fixed costs amount to $770,000. Production engineers have advised management that they expect unit labor costs to rise by 20 percent and unit materials costs to rise...
Exercise 6-7 Target Profit Analysis (L06-6) Lin Corporation has a single product whose selling price is $134 per unit and whose variable expense is $67 per unit. The company's monthly fixed expense is $31,750. Required: 1. Calculate the unit sales needed to attain a target profit of $8,450. (Do not round intermediate calculations.) 2. Calculate the dollar sales needed to attain a target profit of $9,700. (Round your intermediate calculations to the nearest whole number.) 1. Units sales to attain...
Saved points QUESTION 2 Which of the following defines gross profit? a. The amount remaining from the sales value after deducting interest expense. b. The amount remaining from the sales value after deducting overhead costs c. The amount remaining from the sales value after deducting the cost of goods sold. d. The amount remaining from the sales value after deducting depreciation and Amortization
Argentina Partners is concerned about the possible effects of
inflation on its operations.
Saved Help Save Required: a. Compute the volume in units and the dollar sales level necessary to maintain the present profit level, assuming that the maximum price increase is implemented. b. Compute the volume of sales and the dollar sales level necessary to provide the 7 percent increase in profits, assuming that the maximum price increase is implemented. C. If the volume of sales were to remain...
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