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Summer Nights sells bottles of bug spray for $8.00 each. Variable costs are $2.00 per bottle, while fixed costs are $40,000 per month for volumes
Summer Nights sells bottles of bug spray for $8.00 each. Variable costs are $2.00 per bottle, while fixed costs are $40,000 per month for volumes up to 40,000 bottles of spray and $58,000 per month for volumes above 40,000 bottles of spray. The flexible budget would reflect monthly operating income for 10,000 bottles of spray and 22,000 bottles of spray of what dollar amounts? A. $80,000 and $176,000, respectively B. $2000 and $118,000, respectively O C. $20,000 and $92,000, respectively O D. $40,000 and $92,000, respectively Assume the Hiking Shoes division of the All About Shoes Corporation had the following results last year (in thousands). Management's target rate of return is 10% and the weighted average cost of capital is 30%. Its effective tax rate is 25%. Sales $5,000,000 Operating income 1,250,000 Total assets 1,500,000 Current liabilities 820,000 What is the division's capital turnover? A. 4.00 O B. 3.33 O C. 1.83 OD. 1.20 Which of the following is not an advantage of decentralization? A. Improved customer relations B. Use of expert knowledge O C. Frees top management's time D. Achieving goal congruence
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