The current world is marked by the uncertain and changing organizational environment of information. Most administrators are not equipped with the skills of understanding that the future is highly unpredictable. Indeed, the relationships and the events as they happen in the systems of society such as schools cannot be predetermined. In modern school environments full of uncertainty caused by numerous connections and different options, it is difficult for administrators to determine and expose potential problems and opportunities using traditional methods.
An open system in any organization allows the exchange of information with its environment. An open system is always under the scrutiny of the external environment, and the organization is not at liberty to control its behavior without consultation. Numerous factors affect an organization, including environmental conditions such as the availability of raw materials, customer demands, and local and federal regulations. Therefore, it is prudent that we understand how the above-mentioned forces affect an organization to explain the internal behavior of the organization.
The most common characteristic of open systems is that they display a hierarchical ordering. In the case of the West Chester Private School (WCPS), the following can be said about its effectiveness as an open system during closure. The interaction of West Chester Private school and the external environment as an open system during the closure of two of its Phoenix locations was poor and ineffective. The closure was abrupt because the parents were not given prior information before the school administration closed the institution.
The parents complained that they had not prepared to take their children to other schools. They even appealed to the institution to raise the amount of tuition fee in case the issue emanates from financial constraints. Secondly, the administration had earlier plans to close the Phoenix campuses because of low student registration, but despite their plans, they gave.
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while blank establishes a firm's mission and objectives, the marketing department supports the goals by helping to provide satisfying products.
Answer: management
Explanation:
While management establishes a firm's mission and objectives, the marketing department supports the goals by helping to provide satisfying products.
A firm's management clearly defines the vision and mission of the firm, Here, the managers of the firm set strategic objectives that are aligned with the company's long-term goals.
Whereas the marketing department, with an effective marketing strategy defines the overall direction and goals for the firm's marketing. Thus, this strategy will articulate how will a firm going to deliver the products or services in ways that will satisfy their customers.
Hence, management of a firm must define and communicate a clear strategy.
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How do you think will be the effects of this project on the long-term profits of petron corporation
Petron's long-term profits will increase from this project. Profitability can be increased by focusing on four key areas. These include cost reductions, increased turnover, increased productivity, and increased efficiency. With the upgrade, Petron will increase production significantly.
The definition of long-term debt or long-term liabilities is an individual or group obligation to pay and pay off debts for a period long enough to reach one accounting period, or even more. Simply put, it is a future obligation or expense for debt that is deferred within one year until a time determined by the company.
Payment of the debt is made using funds from non-current assets. Where, these non-current assets are assets or assets of a company with a value based on the length of time that is permanent.
The company's assets are included in non-current assets in the form of factories, buildings, production equipment and supplies, long-term investments, and intangible assets.
The purpose of this type of debt is to help the company's capital strength. In addition, this debt also provides additional company assets in the form of equipment, property, and investment. This means that long-term loans can reflect the equity ratio used in measuring the ability of each company to meet obligations.
In the process, long-term loans can be implemented with collateral covering immovable property in the form of land, buildings, factories, warehouses, to houses. This guarantee is given in the form of a certificate of ownership of the immovable property.
Even though the certificate is submitted and retained by the lender, the company can still use the place to carry out business activities. The period of time required by companies when applying for long-term loans is usually around 5 to 20 years.
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This initiative will improve Petron's long-term earnings. Profitability may be boosted by concentrating efforts on four main areas. Cost savings, greater turnover, productivity, and efficiency are examples of these. Petron's output will skyrocket as a result of the overhaul.
What are long term financial obligation?It is to be noted that Long-term debt or long-term liabilities are defined as an individual or group duty to pay and pay off debts for a time long enough to span one accounting period, if not more.
Simply described, it is a financial obligation or expenditure which is delayed for one year until a period designated by the firm.
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Full Question:
On October 13, 2014, the following information from an article titled,
"Petron completes $2-B refinery upgrade: Firm doubling production capacity" was posted on Business.inquirer.net (Date Accessed: March 11, 2015):
Dubbed as Refinery Expansion Project (RMP-2), this project started in 2011. "With the upgrade, Petron said it would significantly increase production. Its gasoline production alone is projected to double from the current 18,0000 barrels per day to 36,000 barrels per day."
In the same article, Mr. Ramon Ang, the president of Petron also made the following statements:
"For Petron, this means increasing our revenues while improving profitability," Ang said. "With increased production, Petron will enhance the country's supply security and further lessen its dependence on higher-costing imported fuel products. We will also be the only oil company capable of locally-producing more efficient and environment-friendly fuels that meet or exceed global standards."
Question: What do you think will be the effects of this project on the long-term profits of Petron Corporation?
now that there is so much information easily available on the internet, it is not uncommon for individuals to copy skills from resume templates to make themselves look more attractive to a recruiter. knowing this, davis recruiting has created a test to see if what is on the candidate’s application are real skills that the candidate has. davis recruiting is testing validity.
Davis recruiting is testing content validity. Thus, option D is correct.
What is recruiting?The practice of constantly pursuing, locating, and employing individuals for a certain post or career is known as recruitment.
The complete employer brand, beginning with the initial stages of the volunteer's incorporation into the business, is covered by the term recruiting.
Examining content validity determines that it is comprehensively reflective of the concept.
This is to make sure that their test that will be taken online shall consist of every data and all the subjects. Therefore, option D is the correct option.
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The question is incomplete, the complete question is:
criterion-related
predictive
concurrent
content
probabilistic
cornel and deanna resolve their dispute over the subsidence of cornel’s real property due to deanna’s excavation for an irrigation pond by having a neutral third party render a binding decision. this is
Cornel and Deanna resolve their dispute over the subsidence of cornel’s real property due to Deanna's excavation for an irrigation pond by having a neutral third party render a binding decision. This is an arbitration.
What is an arbitration?It should be noted that arbitration simply means the form of alternative dispute resolution that has to do with the fact that the courts aren't involved.
Four different types of conflicts can be resolved by arbitration: contractual disputes between management and labor, interests of various parties in negotiations, such as in public sector labor relations, litigation claims resolved through court-annexed programs, and community disputes resolved.
In this case, Cornel and Deanna resolve their dispute over the subsidence of cornel’s real property without involving the court.
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during an audit of sydney's pet supplies, a public company, the auditor was not able to gather sufficient appropriate evidence and could not express an opinion on the financial statements. which type of audit report should be issued?
The fact that the auditor was not able to gather sufficient appropriate evidence and could not express an opinion means that the type of audit report that will be issued is a Disclaimer of Opinion.
What is a Disclaimer of Opinion?This is a type of audit report where an auditor says that they are not able to give an opinion on the financial statements of a company.
This can happen for any of several reasons and one of them is that the auditor was not given access to enough evidence and financial statements to to properly express an opinion on the statements involved.
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the time period during which production processes increase volume in order to meet customer demands while coping with quality problems and last-minute design changes is called
The time period during which production processes increase volume in order to meet customer demands while coping with quality problems and last-minute design changes is called ramp-up.
Production is the technique of making or producing goods and products from uncooked substances or components. In different phrases, production takes inputs and uses them to create an output that is in shape for consumption – a good or product that has a fee to a cease-person or purchaser.
Production is the procedure of making, harvesting, or growing something or the quantity of something that becomes made or harvested. An instance of manufacturing is the creation of furniture. An instance of manufacturing is harvesting corn to devour. An instance of manufacturing is the amount of corn produced.
Manufacturing is one of the maximum critical tactics inside production and is a core part of what it means to be a manufacturer. Without this hobby, no finished items might be created, and there might be nothing to promote to clients.
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managers under pressure to meet sales, production, or other targets are thought to be managing for , while managers who try to understand the increasingly interconnected nature of business around the world are managing for .
Managers under pressure to meet sales, production, or other targets are thought to be managing for ethical standards while managers who try to understand the increasingly interconnected nature of business around the world are managing for globalization.
Who's a manager?It should be noted that a manager simply means an individual who manages others in an organization in order to achieve the organizational goals.
Whether it's a company, a nonprofit, or a government agency, management is the administration of the institution. The art and science of managing a company's resources are involved.
In this case, the ethical standards is important in the organization
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les moore retired as president of goodman snack foods company but is currently on a consulting contract for $61,000 per year for the next 14 years. use appendix b and appendix d for an approximate answer, but calculate your final answer using the formula and financial calculator methods. a. if mr. moore’s opportunity cost (potential return) is 8 percent, what is the present value of his consulting contract?
The present value of his consulting contract is $502,898.46.
Annual payment = $61,000
Opportunity cost = 8%
Number of payments = 14
Present value of payments = $61,000/1.08 + $61,000/[tex]1.08^{2}[/tex] + ... + $61,000/[tex]1.08^{13}[/tex] + $61,000/[tex]1.08^{14}[/tex]
Present value of payments = $61,000 * (1 - [tex](1/1.08)^{14}[/tex]) / 0.08
Present value of payments = $61,000 * 8.244237
Present value of payments = $502,898.46
Therefore, the Present value of payments is $502,898.46.
The present value of an annuity is the current value of future payments from an annuity, given a specified rate of return, or discount rate. The higher the discount rate, the lower the present value of the annuity.
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today, many organizations can function and compete effectively without computer-based information systems.
Today, many organizations can function and compete effectively without computer-based information systems.
FALSE
A corporation is a legitimate group of human beings, for example a political birthday celebration, a business, a charity, or a membership. most of those specialized faculties are furnished via voluntary businesses. ... a document by using the global Labour business enterprise. Synonyms: group, organization, celebration, body extra Synonyms of company.
An organization is a group of those who work collectively, like a neighborhood association, a charity, a union, or a agency. you can use the word company to consult organization or enterprise, or to the act of forming or setting up something.
Companies are systems created to achieve commonplace dreams through human-to-humans and those-to-paintings relationships. they may be basically social entities that are goal-directed, deliberately based for coordinated hobby systems, and is connected to the outside surroundings.
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in testing inventory at an audit client in the retail industry, you note that some of the inventory is contracted to be held on consignment. as a result, which financial statement assertion is now relevant?
Rights and obligations Financial statement assertion is now relevant
An obligation is anything that a person must perform because of a duty, a law, or other requirement. A right is an entitlement to have or do something..What is the connection between responsibilities and rights?Rights and Duties always go hand in hand:
If the state grants a citizen the right to life, it also puts a responsibility on him to respect the lives of others and refrain from putting his life in danger. If I have a right to work and make money, I owe it to others to respect their freedom to do the same."The idea of responsibilities is prior to the idea of rights, which is inferior and supplementary to the former.To learn more about Rights and Obligations, Click the links.
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mr. and mrs. ruiz operate a hardware store in a jurisdiction that levies both a sales tax on retail sales of tangible personalty and an annual personal property tax on business tangibles. the personal property tax is based on book value as of december 31. this year, mr. and mrs. ruiz purchased $840,000 of inventory for their store.
The answer is No, because Mr. and Mrs. Ruiz are not required to pay any sales tax on the purchase of inventory since it is purchased for store and not qualifies to be a retail sale.
What is a Sales tax?It refers to the tax levied on the sale of goods and services that is usually calculated as a percentage of the purchase price and collected by the seller.
However, this Sales tax are levied only on retail sales. So, since the inventory is purchased by Mr. & Mrs. Ruiz for their store, the, it will not qualify to be a retail sale.
Therefore, the answer is No, because Mr. and Mrs. Ruiz are not required to pay any sales tax on the purchase of inventory since it is purchased for store and not qualifies to be a retail sale.
Missing sentence " are mr. and mrs. underhill required to pay sales tax on the purchase of the inventory?"
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true or false? changes in working capital are subtracted from net income on the cash flow statement.
Changes in working capital are deducted from net income on the cash flow statement. The statement is therefore TRUE.
In more precise terms, operating cash flow of the cash flow statement is equal to net income less changes in working capital plus non-cash expenses.
Net Income - Changes in Working Capital + Non-Cash Expenses = Operating Cash Flow
Depreciation, increases in accounts receivable, and other non-cash and non-operating expenses must all be subtracted from the net income.
Additionally, operating cash flow may also be computed by adding the depreciation and subtracting the changes in working capital from net income.
Net Income + Depreciation - Changes in Working Capital = Operating Cash Flow
The ability of a business to make money overall is shown by operating cash flow.
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The cash basis of accounting records revenues and expenses when the cash is exchanged while the accrual basis of accounting.
Records revenues and expenses when they are incurred.
The notion of accrual basis accounting (time basis) is one of the basics in making accounting records. Revenues and expenses are recognized (recorded) when the transaction occurs regardless of whether cash is received or disbursed. This accrual basis is more widely used in business practices than cash basis accounting.
The accrual basis has two main concepts, including the following:
Revenue Recognition, on an accrual basis, revenue is recorded when bad debts arise. The company's revenue has been recognized from bad debts from consumers even though cash has not been received. This is also because when cash actually receives revenue is not so important.Expense Recognition, on an accrual basis, the accrued expenses will be recorded as accounts payable in the current liabilities section of the balance sheet. The company will incur unpaid expenses and become an expense in the income statement. Usually, the company makes a separate cash flow statement indirectly this is an overhead cost.You can learn more about notion of accrual basis accounting here brainly.com/question/14947252
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wayne incurs a $2,000 medical bill. if his health policy has a $1,000 deductible and an 80/20 coinsurance percentage, how much will the insurer pay?
In a situation where Wayne incurs a $2,000 medical bill, and if his health policy has a $1,000 deductible and an 80/20 coinsurance percentage, the insurer will pay an amount of $800. Therefore, the option C holds true.
What is the significance of coinsurance?A coinsurance can be referred to or considered as the system of insurance in which the insurer pays a predetermined proportion of losses or repairs incurred against the happening of an insured event.
In the above situation, the policy has an 80/20 coinsurance terms, then as per these terms out of the $1000 deductible in the health policy, an amount up to 80%, i.e., $800 will be paid by the insurer Wayne.
Therefore, the option C holds true and states regarding the significance of a coinsurance.
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The question seems to be incomplete. It has been added below for better reference.
Wayne incurs a $2,000 medical bill. If his health policy has a $1,000 deductible and an 80/20 coinsurance percentage, how much will the insurer pay?
a) $1,000
b) $1,200
c) $800
d) $1,800
the tech hotel purchased a computer for $3,500. the retail value of the computer per the salesperson is $3,999; however, it is projected that the computer will have a market value of only $2,500 one year from now. the cost principle dictates that the computer purchase be recorded on the date of purchase for:.
$3,500 is the price of the purchase to be recorded according to the cost principle.
What is the cost Principle?The cost principle is a rule that stipulates that financial transactions should be recorded in accounting records according to their value at the time of the initial transaction (i.e., the price paid to purchase the asset), rather than their fair market value. In other words, regardless of future changes in the value of the associated assets, the cost principle mandates that transactions and financial values be presented in accordance with actual costs or returns.
The Construction Co. has purchased land for developing houses in the amount of $180,000. With the booming real estate market, the market value has increased to $235,000 four years later. How should this transaction be listed on the balance sheet by the company's bookkeeper?
Even though the cost of the land has increased significantly, an asset with a cost of $180,000 would still have the same value in the accounting records.
Thus, according to the cost principle, $3500 is to be recorded as the purchase amount.
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Complete question:
IDENTIFY THREE THINGS A DEED OF PARTNERSHIP CONTAINS
Answer:
Name of the firm as determined by all the partners.
Name and details of all the partners of the firm.
The date on which business commenced.
Explanation:
comprehensive income includes all of the following except group of answer choices interest earned on investments translation adjustments on foreign currency restructuring charges investments by owners.
One thing that comprehensive income does not include is investments by owners.
What goes into comprehensive income?The comprehensive income of a company refers to any income that results from changes in equity in a given period. These include translation adjustments on foreign currency and restructuring charges, as well as interest earned on investments.
It does not however, include any transactions that have to do with investments by the owners. Also, distributions to owners are not included as well.
In conclusion, the comprehensive income section of the balance sheet does not include investments by owners.
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despite two years when overall prices fell, share prices in the stock market have risen consistently for eight of the past 10 years. how is this market classified?
This market is classified as a secular bear market because the markets are falling consistently for next four years and it is reflecting off a long-term bear Trend and the Bear markets are longer than the Bull market so it is not a cyclical bear market but it is rather secular bear market which will be followed by consistent decrease in the bond return
What is a stock market? What is an example of a stock market?In order to make money, people exchange securities on the stock market.
Publicly traded companies are traded with one another on the stock market.The NASDAQ exchange is a prime illustration of a stock exchange.The National Association of Securities launched the NASDAQ stock market on February 4th, 1971 .Four days later, the NASDAQ stock exchange's inaugural trading day was announced.
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Cash paid to purchase long-term investments would be reported in the statement of cash flows in.
Cash paid to purchase long-term investments would be reported in the statement of cash flow from investing activities. The net amount of cash and cash equivalents transported into and out of a company is referred to as cash flow. The ability of a company to generate positive cash flows or, more precisely, to optimize long-term free cash flow is important to its potential to create value for shareholders (CFC).
FCF is the cash generated by a company's normal business activities after deducting any capital expenditures. The debt service coverage ratio, free cash flow, and unlevered cash flow are all approaches for analyzing a company's cash flow.
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how the behavioral decision-making model was applied in the wcps's decision to shut down its campuses.
The behavioral decision-making model turned into implemented in the wasps' selection to close down its campuses: The selection to shut the north Phoenix vicinity.
Behavioral decision-making is the observation of affective, cognitive, and social processes which humans appoint to become aware of and select alternatives. those procedures are guided with the aid of the values, beliefs, and possibilities of the selection maker, producing a very last desire and swaying conduct.
management specialists have developed a 'behavioral method' that's realistic in step with the call for the situation. This technique is pragmatic and holds the view that a manager is a human being and can not be completely rational due to the fact he is faced with many constraints, troubles, obstacles, and inadequacies.
Behavioral decision-making goals to tricky the factors of judgment and choice behavior in conjunction with great expertise of psychology which helps in enhancing the choice-making conduct of a person.
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you gather some data about the use of a surgical checklist in your operating rooms and have an idea for an improvement. at the next month’s meeting, you present the idea to your colleagues.
The most likely outcomes are people will have different reactions; some will support you, others will initially resist you.
What are outcomes?In order to create "events," which are groups of outcomes that satisfy a condition, individual outcomes are grouped together because they may be of little practical significance or there may be an infinite number of them. The culmination of all such events is a sigma-algebra.
An elementary event is one that only has one potential outcome. The event that contains all conceivable results is the sample space of an experiment. A single effect could manifest in a number of different situations.
When the sample space is finite, every subset of the sample space is often an event (that is, all elements of the power set of the sample space are defined as events).
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over the last several decades, the number of manufacturing jobs have decreased in the united states and have increased in other countries, such as mexico. the u.s. also exports goods to mexico. most exports are agricultural products like corn, soybeans, and dairy, but exports also include intellectual property. this information suggests that mexico has a opportunity cost of manufacturing goods relative to the united states. the united states must have a in producing .
This information suggests that Mexico has a lower opportunity cost of manufacturing goods relative to the US. The United States must have a comparative advantage in producing both agricultural products and intellectual property.
What is the opportunity cost of production?The manufacturing jobs are decreasing in the United States and they are increasing in Mexico. This tells us that the Mexicans are exporting manufactured goods to US. A nation would have to export a good if it has lower opportunity cost in creating the good.
What is the comparative advantage?The US would engage in the exportation of agricultural goods and intellectual properties to the Mexicans. Software are a part of intellectual property. It is advised that nations export the goods which they have the comparative advantage in making.
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ada inc. stopped its production of oral care goods after determining apparel production to be its new primary objective. this is a direct result of the planning process at ada inc.
Ada Inc. stopped its production of oral care goods after determining apparel production to be its new primary objective, which is a direct result of the c. strategic planning process at Ada Inc.
What is the role of strategic planning?Strategic planning provides long-term direction to an organization's decision-makers.
Strategy planning helps the organization's leaders define their vision for the future and to marry their organization's goals and objectives with available and future resources.
The elements captured in strategy planning include the organization's vision, mission, SWOT analysis, core values, goals, objectives, and action plans.
Strategy planning remains a mere planning process until the formulated strategies go through these stages: formulation, implementation, successful outcomes, and evaluation.
Thus, at Ada Inc., there is an ongoing strategic planning process.
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Question Completion with Answer Options:a. tactical
b. research
c. strategic
d. economic
which step in the decision-making process would help you in deciding how much money you want to make at work?
Selection is the step in decision making process that helps in deciding money one want to make at work.
As before switching a work or joining a new work a person always see the perks , payment and the benefits available to them. The decision making process helps one person to choose the best from the various options and alternatives available to them.
The decision making process is the most important of all the things one is interested and invested in which helps the person to make the process much easier to decide what one wants in their way to come.
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A low _____ is usually key to a firm’s profitability because acquiring a customer is more expensive than keeping one.
Because it costs more to acquire a new client than to retain an existing one, a company's profitability typically depends on having a low churn rate.
The rate at which consumers stop doing business with a company during a predetermined time period is known as the churn rate, often referred to as the attrition rate. The amount of subscribers that discontinue their subscriptions or do not renew them may also be considered churn.
The more clients who cease making purchases from your company, the greater your churn rate. The more clients you keep, the lower your turnover rate is. Generally speaking, the better is to have a smaller churn rate. The normal business cycle of losing and gaining clients is referred to as customer churn.
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it takes a barber 10 minutes to serve one customer. note: round your answers to 2 decimal places. what is the capacity of the barber expressed in customers per hour? assuming the demand for the barber is 2 customers per hour, what is the flow rate? assuming the demand for the barber is 2 customers per hour, what is the utilization? assuming the demand for the barber is 2 customers per hour, what is the cycle time?
The capacity of the barber expressed is 6 customers per hour.
The flow rate is 2 customers per hour
The utilization is 33%
The cycle time is 19.8 minutes per customer.
What is Flow rate?Flow rate is the flow that is available for a specified period of time, the flow for a production or customer is determined as per the demand of the service or product.
In the scenario the flow rate is 2 customers per hour. However the capacity of the barber is 6 customers per hour as (60 mins / 10 min per customer).
Utilization is 33% as (flow / Capacity) (2 / 6). This is the total utilized time for the customers available. This represents that only 33% of the capacity of the barber is utilized.
The cycle time is 19.80 minutes per customer if the demand is 2 per hour. (utilization / minutes in an hour) (33% / 60).
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choose a real or made up example of a company, and describe at least three fixed costs the company has
Answer:
Explanation:
The fixed cost remains the fixed it never be changed.
Fixed cost;
It is the cost that should be the same whether the production level increased or not.
If we take an example of dominos, so here the fixed cost could be in form of rent, ovens, refrigerators.
It is the part of the organization expense.
gary kelly, ceo of southwest airlines, talks to a group of reservation agents to acknowledge their contributions to the company’s success.
Gary Kelly, ceo of southwest airlines, talks to a group of reservation agents to acknowledge their contributions to the company’s success planning organising controlling leading
The chief executive officer of Southwest Airlines, Gary Kelly, addresses a gathering of reservation representatives to thank them for their contributions to the company's success. Leading
What do reservation agents do?
A reservation agent assists consumers in making decisions about their travel by providing information, helping them choose hotels, and then making bookings for rooms or tickets.
What does a travel agent for airlines do?
Job Description airline reservation agent's primary responsibility is to help passengers with making reservations and handling ticketing tasks via phone or in person.
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the cost for producing a certain product is $175 each. the fixed costs are $120,000. the selling price for each product is $335
The cost of manufacturing is the entire fee incurred through a commercial enterprise to both produce a product and provide its services. manufacturing fees commonly include supplies and uncooked substances which are eaten up in the course of manufacturing, alongside labor prices.
Given the cost of producing a certain product $175
Fixed cost $120,000
Selling price for each product $335
Cost function give products total cost for sum of C(x) 175 n + 120,000
Profil function gives total profit
total revenue - profit total
so, P(x) = 335x-(175x+120,000) 160x -120,000
Break-even when total profit = 0
0 = 160x - 120,000 = 750
3000 750 22 120,00 164
Break-even point = (750,0)
P(725) 160 x 725 -120,000 2 116,000 - 120,000
4000 Profit function is negative be a loss of $4000. So, there would
P(775) 775×160-120,000
124,000 - 120,000 24000 So, a Profile of $4000 will be obtained.
The real value is a value as measured by way of the physical hard work and substances fed on in manufacturing. as an instance, actual costs would consist of, but no longer be confined to, production, market evaluation, distribution, and advertising. manufacturing charges also are known as product fees. the price of manufacturing of a commodity consists of two types of prices, Variable fees, and fixed prices also called top and Supplementary costs respectively.
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t is the outcome when production is efficient? when production is efficient, . a. some resources are unused or misallocated b. mario's can produce more pasta only by producing less pizza c. mario's can produce more pasta without producing less pizza d. there is no tradeoff between pizza and pasta
44 pizzas and 44 pasta meals are added to the trade's total earnings each hour.
What is Gain?A gain in financial accounting occurs when an asset's market value exceeds its original cost. The gain is not recognized as a realized gain until the asset is exchanged for cash. For tax purposes, this is a crucial distinction because only realized gains are taxed. Gains are the outcome of situations, things that happen, or things that are done that affect the entity without being related to income or owner investments. Typically, they arise from events, nonreciprocal transactions, holding profits, and exchange transactions.
Typically, when an underlying asset or liability is converted to cash, a gain or loss is realized.
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