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Assume a company's Income Statement for Year 12 is as follows: Income Statement Data Net Revenues from Footwear Sales Cost of Pairs Sold Year 12

Assume a company's Income Statement for Year 12 is as follows: Income Statement Data Net Revenues from Footwear Sales Cost of Pairs Sold Year 12 (in 000s) $ 600,000 370,000 Warehouse Expenses Marketing Expenses Administrative Expenses Operating Profit (Loss) Interest Income (Expense) Pre-tax Profit (Loss) Income Taxes Net Profit (Loss) 55,000 100,000 15,000 60,000 (12,000) 48,000 14,400 $ 33,600 Based on the above income statement data and assuming the company has 20 million shares of common stock outstanding, the company's operating profit margin and EPS were 10.0% and $1.68. 5.60% and $3.00. 11.7% and $1.68. O 10.0% and $3.00. 8.0% and $2.40. In managing production worker compensation and expenditures for best practice training, the overriding objective of company managers should be to make sure its annual base wage for production workers is always above the average base wage paid by all companies in those regions where it has production facilities. achieve the highest possible worker productivity (pairs produced per worker per year). establish total compensation packages for production workers that are close to the highest in the industry in each geographic region where its production facilities are located--this is because companies with the highest total annual compensation packages attract highly- motivated workers with the skills needed to achieve the highest levels of labor productivity. O establish an incentive pay per non-defective pair that results in the lowest feasible reject rate for branded pairs produced. O achieve labor costs per pair produced that are at worst below the industry average and at best are very close to (or even equal to) the industry-low in each region where the company has production facilities. Which one of the following actions is most likely to result in higher production costs per branded pair at one of your company's production facilities? Increasing the S/Q rating of branded pairs produced from 4.5 stars to 5.5 stars Increasing total employee compensation by 3% at a production facility and, in turn, realizing a 5% increase in production worker productivity The installation of production improvement option B Increasing expenditures for TQM/Six Sigma quality control from $1.50 to $2.00 per pair in Year 12 O Increasing spending for best practices training from $2,000 per worker to $2,500 per worker

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