Tag: Accounting questions

In the hope of high returns, venture capitalists provide funds to finance new (start up) companies. However, potential competitors and structures of the market into which the new firm enters are extremely important in realization of profits. Among different market structures, which one do you believe provides the highest possible return for a new company and why?

Answer the questions below with at least a paragraph per question.

https://www.igrad.com/videos/the-components-of-a-budget

What are the two major components that go into a budget?
What are the three categories of expenditures?
How do you determine if you are saving money, breaking even, or losing money?

Answer the questions below with at least a paragraph per question.

https://www.igrad.com/videos/the-components-of-a-budget

What are the two major components that go into a budget?
What are the three categories of expenditures?
How do you determine if you are saving money, breaking even, or losing money?

Answer the questions below with at least a paragraph per question.

https://www.igrad.com/videos/the-components-of-a-budget

What are the two major components that go into a budget?
What are the three categories of expenditures?
How do you determine if you are saving money, breaking even, or losing money?

You are the plant accountant for a company that makes a popular brand of basketball shoes. Currently, your company sells 1,000 pairs of shoes each month for $100 apiece. The variable costs are 40% of sales, and the fixed costs are $35,000/month. The company’s advertising director is asking for an increase in her marketing budget of $1,500 per month. She plans to enhance her marketing campaign in a targeted area of the West Coast. She estimates that the additional advertising will result in a 50% increase in demand. For this situation, the additional advertising costs are considered a fixed cost. What is the impact of this request on the company’s operating income? On the other hand, the production manager believes that this increase in sales could put pressure on the production line. He estimates that there will need to be a $2.00 increase in labor costs per unit.

Consider the following:

Using the projected monthly income figure calculated above, how many units would the company need to sell to meet the initial monthly income figure?
What is the break-even sales volume needed?
Summarize the results of your analysis.
Respond to the following for this assignment:

How did you calculate the original operating income and break-even point before changes?
What is the new break-even point after including the effects of the increased advertising and higher variable costs?
Compare the two break-even results, and make a recommendation on whether the company should change or not.

1. Typical users of financial statements include internal users such as managers and external users such as creditors, investors, regulatory agencies. Which of these users would find more helpful information on the balance sheet and why? And which of these users would find more helpful information on the income statement and why?

2. Discuss the opinion that ‘accounting is the language of business.’