User Account

All Pages

Why the profits have increased at a faster rate than sales

Assignment Help Managerial Accounting
Reference no: EM133080189

Question - George and Brown started a Chocolate manufacturing company a few years ago. They rented a building, bought equipment, and hired two cool and hip employees to work full time at a fixed monthly salary. Utilities and other operating charges remain fairly constant during each month.

During the past two years the business has grown with average sales increasing two percent a month. This situation pleases both George and Brown, but they do not understand how sales can grow by two percent a month while profits are increasing at an even faster pace. They are afraid that one day they will wake up to increasing sales but decreasing profits.

Required - Explain George and Brown why the profits have increased at a faster rate than sales.

Reference no: EM133080189

Questions Cloud

What are the expected revenues for each month : What are the expected revenues for S2BU for each month, April through September? Revenues are recorded in the month of the occasion
Calculate the planned order releases : The holding cost for that item is $2 per month and each setup costs $80. Calculate the planned order releases using the EOQ technique and POQ technique
What is ralph realized gain or loss : What is Ralph's A) realized gain or loss, B) recognized gain or loss, and C) adjusted basis in Land B in each of the following alternative scenarios
What is the level of company accounts receivable : If the company has annual sales of $5million, all of them on credit, what is the level of company's accounts receivable
Why the profits have increased at a faster rate than sales : George and Brown started a Chocolate manufacturing company a few years ago. Explain George and Brown why the profits have increased at a faster rate than sales
Compute timpanogos inc tax liability : Premiums paid on the key-person life insurance policies. The policies have no cash surrender value 21,000. Compute Timpanogos Inc.'s tax liability for 2020
PUB010-6 Dissertation Assignment : PUB010-6 Dissertation Assignment Help and Solution, University of Bedfordshire - Assessment Writing Service
Calculate her beginning of the month payment : Marge purchased a new vehicle for $30,000. The residual value of the vehicle is $10,000. Calculate her beginning of the month payment
What is the deferred tax liability at year-end : An entity reported the following information during the first year of operations: Pretax financial income P 9,000,000. What is the deferred tax liability

Reviews

Write a Review

Managerial Accounting Questions & Answers

  What is the activity cost per unit of activity driver

Under an activity-based costing system, what is the activity cost per unit of activity driver for machine setups

  What amount of gain does Diego realize

Consequently, along with the real estate, the mortgage is transferred to the corporation. What amount of gain, if any, does Diego (a) realize

  What was sampson variable overhead spending variance

What was Sampson's variable overhead spending variance? Sampson Apparel Inc. incurred actual variable overhead expenses of $20,000 in the current year

  What would expect to happen to profits and why

Explain, Under normal conditions, if sales or revenues are steadily increasing period to period, what would you expect to happen to profits? Why?

  How much will ezra collect in march

How much will Ezra collect in March on a $220,000 credit sale in January? If production equals sales and there are no beginning or ending inventories

  Compute the order base manufacturing method

CM ratio and variable expenses ratio. If Paste Corporation uses the Process base manufacturing method and Order base manufacturing method

  Would recommend that the company sign the contract

Find materials were purchased from a new supplier who is anxious to enter into a long-term purchase contract. Would you recommend that the company sign contract

  Compute the fy cost of goods sold

The total manufacturing costs amounted to $296,000. Use this information to determine the FY 2018 Cost of Goods Sold. (Round enter as whole dollars)

  What variable factory utility cost per case bottled is

What variable factory utility cost per case bottled is closest to? A soft drink bottler incurred the following factory utility costs: $3,936 for 800 cases

  How much will be saved

Hendricks Company has offered to sell 5,000 units of the same part to Laskowski Company for $14 per unit. How much will be saved

  Which should be included in the performance report

If a business used an effective RESPONSIBILITY ACCOUNTING SYSTEM and wanted to measure, Which should be included in the performance report?

  Traceable fixed costs and common fixed costs

Question 1: How do you calculate unit product cost and operating income under variable and absorption costing?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd