GABRIANA PHARMA To our hardworking medical representatives: I am glad to inform you of our new policy on sales commissions. Please see them below: . Selling 1-50 boxes of our new drug, the medical representative gets P3,000 commission. Selling 51-100 boxes, commission becomes P5,000. Being able to sell 101-150 or more boxes allows a commission of P7,500. Thank you for your continued support. The commission to the medical representatives is best described by which of the following cost behaviors? O • Fixed cost O.Variable cost O . Mixed cost O • None of the above

GABRIANA PHARMA To our hardworking medical representatives: I am glad to inform you of our new policy on sales commissions. Please see them below: . Selling 1-50 boxes of our new drug, the medical representative gets P3,000 commission. Selling 51-100 boxes, commission becomes P5,000. Being able to sell 101-150 or more boxes allows a commission of P7,500. Thank you for your continued support. The commission to the medical representatives is best described by which of the following cost behaviors? O • Fixed cost O.Variable cost O . Mixed cost O • None of the above

Business Its Legal Ethical & Global Environment

10th Edition

ISBN:9781305224414

Author:JENNINGS

Publisher:JENNINGS

Chapter6: Administrative Law

Section: Chapter Questions

Problem 9QAP

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Numble Inc., manufactures boxed stationery. Currently, the company is operating at 80 percent of capacity. A chain of hospitals has offered to buy 24,000 boxes of Numble’s’ pink-bordered thank-you notes as long as the box can be customized with the hospital chain’s logo. While the normal selling price is $5 .00 per box, the chain has offered just $3.40 per box. Numble can accommodate the Special order Without affecting current sales. Unit cost information for a box of thank-you notes follows: Required: 1. What are the alternatives for Numble Company? 2. Assume that none of the ﬁxed cost is avoidable. List the relevant cost(s) of internal production and of external purchase. 3. Which alternative is more cost-effective and by how much? 4. Will Numble still accept the offer if the price offered is $2.50? Why or why not? Explain.
The San Lowsingso Hospital near Sacramento, California, charges a group of patients a total of $1 million. Historically, this group has only been charged 45 percent of the total because of explicit and implicit price concessions. After that, the hospital estimates that it has a 40 percent chance of collecting the entire amount but a 60 percent chance of collecting 70 percent. What amount of patient service revenues are recognized? Assume the most likely outcome approach is applied?
Worley Company buys surgical supplies from a variety of manufacturers and then resells and delivers these supplies to hundreds of hospitals. Worley sets its prices for all hospitals by marking up its cost of goods sold to those hospitals by 8%. For example, if a hospital buys supplies from Worley that cost Worley $100 to buy from manufacturers, Worley would charge the hospital $108 to purchase these supplies. For years, Worley believed that the 8% markup covered its selling and administrative expenses and provided a reasonable profit. However, in the face of declining profits, Worley decided to implement an activity-based costing system to help improve its understanding of customer profitability. The company broke its selling and administrative expenses into five activities as shown: Activity Cost Pool (Activity Measure) Total Cost Total Activity Customer deliveries (Number of deliveries) $ 249,000 3,000 deliveries Manual order processing (Number of manual orders) 576,000…
Worley Company buys surgical supplies from a variety of manufacturers and then resells and delivers these supplies to hundreds of hospitals. Worley sets its prices for all hospitals by marking up its cost of goods sold to those hospitals by 5%. For example, if a hospital buys supplies from Worley that cost Worley $100 to buy from manufacturers, Worley would charge the hospital $105 to purchase these supplies. For years, Worley believed that the 5% markup covered its selling and administrative expenses and provided a reasonable profit. However, in the face of declining profits, Worley decided to implement an activity-based costing system to help improve its understanding of customer profitability. Worley gathered the data below for two of the many hospitals that it serves—University and Memorial (each hospital purchased medical supplies that had cost Worley $30,000 to buy from manufacturers): 4. Compute Worley’s customer margin for University and Memorial. (Hint: Do not overlook the…
Worley Company buys surgical supplies from a variety of manufacturers and then resells and delivers these supplies to hundreds of hospitals. Worley sets its prices for all hospitals by marking up its cost of goods sold to those hospitals by 5%. For example, if a hospital buys supplies from Worley that cost Worley $100 to buy from manufacturers, Worley would charge the hospital $105 to purchase these supplies. For years, Worley believed that the 5% markup covered its selling and administrative expenses and provided a reasonable profit. However, in the face of declining profits, Worley decided to implement an activity-based costing system to help improve its understanding of customer profitability. The company broke its selling and administrative expenses into five activities as shown: Activity Cost Pool (Activity Measure) Total Cost Total Activity Customer deliveries (Number of deliveries) $ 500,000 5,000 deliveries Manual order processing (Number of manual orders) 248,000…
Worley Company buys surgical supplies from a variety of manufacturers and then resells and delivers these supplies to hundreds of hospitals. Worley sets its prices for all hospitals by marking up its cost of goods sold to those hospitals by 5%. For example, if a hospital buys supplies from Worley that cost Worley $100 to buy from manufacturers, Worley would charge the hospital $105 to purchase these supplies. For years, Worley believed that the 5% markup covered its selling and administrative expenses and provided a reasonable profit. However, in the face of declining profits, Worley decided to implement an activity-based costing system to help improve its understanding of customer profitability. The company broke its selling and administrative expenses into five activities as shown: Activity Cost Pool (Activity Measure) Total Cost Total Activity Customer deliveries (Number of deliveries) $ 500,000 5,000 deliveries Manual order processing (Number of manual orders) 248,000…
You have just begun your summer internship at Omni Instruments. The company supplies sterilized surgical instruments for physicians. To expand sales, Omni is considering paying a commission to its sales force. The controller, Matthew Barnhill, asks you to compute: (1) the new breakeven sales figure, and (2) the operating profit if sales increase 15% under the new sales commission plan. He thinks you can handle this task because you learned CVP analysis in your accounting class. You spend the next day collecting information from the accounting records, performing the analysis, and writing a memo to explain the results. The company president is pleased with your memo. You report that the new sales commission plan will lead to a significant increase in operating income and only a small increase in breakeven sales. The following week, you realize that you made an error in the CVP analysis. You overlooked the sales personnel’s $2,800 monthly salaries, and you did not include this fixed…
Mary is a sales person for Challenge Furniture. She receives an incremental commission based on the table below. If she sells $26,000 and has already received a draw of $766.15, how much commission is still owed to Mary? Level Sales volume Commission Rate 1 $0–11,700 3.1% 2 $11,700–21,200 4.1% 3 Over $21,200 4.7%
1) locke's distributors has has an annual demand for a port authority’s metal detector of 1400 units. The cost of a detector is $400. The transportation cost is 20% of the unit cost and the ordering cost is $25 per order. Considering that if the lead buyer orders in quantities of 300, he can get a 4% discount on the cost of the detectors. Should the company accept the discount? 2) Adam is responsible for monitoring supplies at the Hospital. During the past year, the mean lead time demand for a certain brand of antibiotic was 60. with a lead time standard deviation of 7. Adam would like to maintain a 90% service probability level. What is the most suitable reorder point?
Calabria Healthcare supplies prescription drugs to pharmacies. As the management accountant,you are required to analyze the financial statements for this quarter. You already have analyzedthe company’s two divisions, Name Brand and Generic, and your supervisor wants an analysis ofthe comparable profitability of the SBUs. The contribution margins are $500,000 and $200,000,respectively; the controllable fixed costs are $200,000 and $50,000; and the noncontrollable fixedcosts are $50,000 and $100,000. Assume there are no nontraceable fixed costs.What are the total contributions by profit center (CPC) for the Name Brand and Genericdivisions, respectively?a. Name Brand: $300,000; Generic: $150,000b. Name Brand: $250,000; Generic: $50,000c. Name Brand: $200,000; Generic: $50,000d. Name Brand: $500,000; Generic: 200,000
One of the best-selling items at Farmacias Plaza de PR is the XXYY drug. It has a quarterly demand of 12,500 units. Each drug costs $ 20, and the maintenance cost has a rate of 18%. If the cost of placing the order is $ 420 and the lead time is 12 days. However, the manufacturer has a discount program which is presented at the bottom.Discountsqty discounts% offBase price10 to 1499No discount$ 2021500 to 49994$ 19.23greater than 50008$ 18.4What is EOQ * Feasible that is most suitable for percentage quantity discounts? Present the answer like this: [EQO *, Discounted cost] Select one: to.[3561.06, 18.4] b.[3486.08, 19.2] c.[3435.65, 20.0] d.[3415.65, 19.2] and.[3486.08, 18.4]
Pfizer Inc is an American multinational pharmaceutical company. After extensive medical and marketing research, Pfizer believes it can penetrate the antiviral drugs market. It is considering two alternative products. The first is an emergency medication for coronavirus (COVID-19) for people ages 12 and older. The second is a pharmacy medicine for the same virus but for patients ages 18 and older. Both products would be introduced at a price of £8.75 per package in real terms. The emergency medication is projected to sell 2 million packages a year, whereas the pharmacy medicines would sell 4.0 million packages a year. Cash costs of production in the first year are expected to be £4.65 per package in real terms for the emergency medication. Production costs are expected to be £5.20 in real terms for pharmacy medicines. All prices and costs are expected to rise at the general inflation rate of 2 percent. Either product requires further investment. The emergency medication could be…