Kramer Enterprises reports year ed information as follows.. Sales (160,000 units) = 960,000 COGS= 640,000 Gross margin= 320,000 Operating expenses= 260,000 Operating income= 60,000

Kramer is developing the 2016 budget. in 2016 the company would like to increase selling prices by 12.5%, and as a result expects a decrease in sales volume by 9%. All other operating expesnes are expected to remain constant. Assume that costs of goods sold is a variable cost and that operating expenses are a fixed cost..

1. What is the budgeted sales for 2016?

a. 1,080,000...

b. 1,000,000...

c. 982,800...

d. 873,600...

2. What is the budgeted COGS for 2016?

a. 720,000...

b. 582,400...

c. 691,200...

d. 640,000...

3. Should Kramer increase the selling price?

a. Yes, because operating income increases for 2016...

b. Yes, because sales revenue increases for 2016

c. No, because sales volume decreases for 2016...

d. No, because gross margin decreases for 2016...

Ajustification for job training programs is that they improve worker productivity. suppose that you are asked to evaluate whether more job training makes workers more productive. however, rather than having data on individual workers, you have access to data on manufacturing firms in ohio. in particu- lar, for each firm, you have information on hours of job training per worker (training) and number of nondefective items produced per worker hour (output). (i) carefully state the ceteris paribus thought experiment underlying this policy question. (ii) does it seem likely that a firm’s decision to train its workers will be independent of worker characteristics? what are some of those measurable and unmeasurable worker characteristics? (iii) name a factor other than worker characteristics that can affect worker productivity. (iv) if you find a positive correlation between output and training, would you have convincingly established that job training makes workers more productive? explain.

5. profit maximization and shutting down in the short run suppose that the market for polos is a competitive market. the following graph shows the daily cost curves of a firm operating in this market. 0 2 4 6 8 10 12 14 16 18 20 50 45 40 35 30 25 20 15 10 5 0 price (dollars per polo) quantity (thousands of polos) mc atc avc for each price in the following table, calculate the firm's optimal quantity of units to produce, and determine the profit or loss if it produces at that quantity, using the data from the previous graph to identify its total variable cost. assume that if the firm is indifferent between producing and shutting down, it will produce. (hint: you can select the purple points [diamond symbols] on the previous graph to see precise information on average variable cost.) price quantity total revenue fixed cost variable cost profit (dollars per polo) (polos) (dollars) (dollars) (dollars) (dollars) 12.50 135,000 27.50 135,000 45.00 135,000 if the firm shuts down, it must incur its fixed costs (fc) in the short run. in this case, the firm's fixed cost is $135,000 per day. in other words, if it shuts down, the firm would suffer losses of $135,000 per day until its fixed costs end (such as the expiration of a building lease). this firm's shutdown price—that is, the price below which it is optimal for the firm to shut down—is per polo.

Which of the following differentiates cost accounting and financial accounting? a. the primary users of cost accounting are the investors, whereas the primary users of financial accounting are the managers. b. cost accounting measures only the financial information related to the costs of acquiring fixed assets in an organization, whereas financial accounting measures financial and nonfinancial information of a company's business transactions. c. cost accounting measures information related to the costs of acquiring or using resources in an organization, whereas financial accounting measures a financial position of a company to investors, banks, and external parties. d. cost accounting deals with product design, production, and marketing strategies, whereas financial accounting deals mainly with pricing of the products.