Exam (elaborations) GLO-BUS

A camera-maker's price competitiveness in a particular geographic region is determined by correct answers whether its price is above or below the average price of all companies competing in that geographic region. A company's managers should give serious consideration to changing from a low-cost/low price strategy for multi-featured cameras to a different strategy in the multi-featured camera market when correct answers so many other rival companies are marketing low-priced multi-featured cameras that intensive competition in the low-end multi-featured camera segment makes it quite difficult for every company competing for buyers of low-priced multi-featured cameras to capture big enough revenues and global market share to earn attractively large profits selling low-priced multi-featured cameras. According to explanations provided on the Help screens for the Production Cost Report, if a company pays a PAT member a base wage of $18,000, a $60 quarterly bonus for perfect attendance, and annual fringe benefits of $2,500, if a PAT is paid a $1 incentive bonus per camera assembled, and if a PAT assembles 12,000 cameras per year (or 3000 cameras per quarter), than the annual compensation cost of a single PAT member and a fully-staffed PAT would be correct answers$23,740 and $94,960. According to the depreciation rates used by the company and described in the Production Cost Report, if a company adds 50 new workstations at a cost of $75,000 each and also spends $10 million for an addition to its assembly plant to accommodate the new workstations, than its annual depreciation costs will rise by correct answers$550,000. Assume a company's Income Statement for a given period has the following entries: Sales Revenues (50,000), Production Costs (26,500), Delivery Costs (1,600), Marketing Costs (8,500), Administrative Expenses (3,000), Operating Profit (13,400), Net Interest (750), Income Before Taxes (12,650), Taxes (3,795), Net Income (8,855). Based on the above income statement data, the company's operating profit margin and net profit margin arecorrect answers26.8% and 17.7%. Assume a company's Income Statement for a given quarter is as follows: Sales Revenues (50,000), Production Costs (26,500), Delivery Costs (1,600), Marketing Costs (8,500), Administrative Expenses (2,000), Operating Profit (14,400), Net Interest (750), Income Before Taxes (13,650), Taxes (4,095), Net Income (9,555). Based on the above data, which of the following statements is false? correct answers Delivery costs are 2.8% of revenues and represent the company's smallest cost component.