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# mr. ramalingam ceo of a cold drink co. takes a decision to increase 10000 units of production. due to this cost of production increases by rs. 50000. that increase in cost is an example of

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## Chapter 7 Practice Question Solutions.pdf practice

Chapter 7 Practice Question Solutions.pdf practice is the assignment for assignment and is all detailed and the assignment is detailed chapter true or false in

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### CHAPTER 7: TRUE OR FALSE

In making decisions, total fixed costs will always be irrelevant because it remains constant under alternative courses of action.

Decisions made using incremental analysis focus on the amounts which differ among the alternatives.

Sunk costs are considered irrelevant when choosing among alternatives because they are differential.

4. Incremental costs are always relevant regardless of whether they are fixed or variable_._

An opportunity cost is the potential benefit given up by using resources in an alternative course of action.

A special one-time order is acceptable if the unit sales price is greater than the unit variable cost.

ABC Company has excess capacity. A customer proposes to buy 400 widgets at a special unit price even though the price is less than the unit variable cost to manufacture the item. ABC should accept the special order if demand on regular slaes is unaffected.

A company should accept an order for its product at less than its regular sales price if the incremental revenue exceeds the incremental costs.

If a company is operating at capacity, the relevant costs of a special order will include only variable manufacturing costs.

A decision whether to continue to buy a product instead of producing it internally depends specifically on the incremental costs and incremental revenues of making the change.

Explanation: This is false because sometimes fixed costs are avoidable. An example of this would be management salary.

Explanation: This is false because sunk costs are not differential.

Explanation: This is false because you must also factor in opportunity costs of potential lost sales due to overproduction.

Explanation: This is false because if they sell the product for less than their variable costs they will lose money regardless of demand.

Explanation: This is false because it will also include opportunity costs because they are at capacity

Direct materials, direct labour, and allocated fixed and variable manufacturing overhead are all relevant in a make or buy decision.

In a decision concerning replacing old equipment with new equipment, the book value of the old equipment can be considered an opportunity cost.

In a decision to keep or replace old equipment, the salvage value of the old equipment is a sunk cost in incremental analysis.

The book value of old equipment is an opportunity cost.

A company should eliminate any segment in which the contribution margin is less than the fixed costs that are unavoidable.

The elimination of an unprofitable product line will always increase the total profits of a company.

If an unprofitable product is eliminated, fixed expenses allocated to the eliminated segment will likely be

Explanation: This is false because it also depends on quality, the supplier, reliability and other intangible factors.

Explanation: This is false because fixed costs are only relevant when they are differential.

Explanation: This is false because it would be considered a sunk cost not an opportunity cost

Explanation: This is false because the book value would be the sunk cost, the salvage value would be relevant.

Explanation: This is false because the book value of old equipment is a sunk cost.

Explanation: This is false because those fixed costs will be allocated over other segments and possibly making them also unprofitable.

Explanation: This is false because those fixed costs will be allocated over other segments and possibly making them also unprofitable.

Explanation: This is false because those fixed costs still exist. You can only eliminate avoidable fixed costs.

effect on the company's net income; a. \$30,000 decrease b. \$30,000 increase c. \$10,000 decrease d. \$10,000 increase

The maximum productivity capacity of Jeydan Company's facilities is 30,000 units of product per year.

The forecasted operating results for the year 2004 before any special orders are as follows:

Sales (18,000 units @ \$100) \$1,800, Variable manufacturing and selling costs 990, Contribution Margin 810, Fixed Costs ' 495,

Operating Income \$ 315, A foreign distributor has offered to buy 15,000 units of Jeydan Company's product at \$90 per unit in 2004. What would be the effect of accepting this special offer and rejecting some business from its regular customers (due to the limited productive capacity indicated above) on NI for 2004? a. \$390,000 increase b. \$705,000 increase c. \$840,000 increase d. 855,000 increase

स्रोत : www.studocu.com

## cold beverages Demand: Demand for soft drinks and ice

This comes after a complete washout in the past two summer seasons, which saw cold beverages and ice-creams being hit amid local curfews, shut-downs of marketplaces and malls, and misconceptions about cold foods and beverages possibly increasing chances of Covid-19 infection.

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Business News›Industry›Cons. Products›FMCG›Demand for soft drinks and ice-creams hits five-year high on early onset of summer and rise in mobility

## Demand for soft drinks and ice-creams hits five-year high on early onset of summer and rise in mobility

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Demand for soft drinks and ice-creams hits five-year high on early onset of summer and rise in mobility

By Ratna Bhushan, ET BureauLast Updated: Apr 18, 2022, 11:04 AM IST

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## This comes after a complete washout in the past two summer seasons, which saw cold beverages and ice-creams being hit amid local curfews, shut-downs of marketplaces and malls, and misconceptions about cold foods and beverages possibly increasing chances of Covid-19 infection.

Agencies

This comes after a complete washout in the past two summer seasons, which saw cold beverages and ice-creams being hit amid local curfews, shut-downs of marketplaces and malls, and misconceptions about cold foods and beverages possibly increasing chances of Covid-19 infection.

Demand for soft drinks and ice-creams has touched a five-year high, with the early onset of summer, improved power supply in villages, return of push-cart workforce to cities, and revival of business and leisure travel as well as general mobility.

“We have not seen such high demand in over five years in summer and all plants are running to full capacity. This is because of early summer, the power situation in villages which has improved significantly so retailers can stock better, minimal price increases, and return of mobility,” PepsiCo’s largest South Asia bottling partner Varun Beverages Ltd (VBL) chairman Ravi Jaipuria said.

This comes after a complete washout in the past two summer seasons which saw cold beverages and ice-creams being severely hit amid local curfews, shut-downs of marketplaces and malls, and misconceptions about cold foods and beverages possibly increasing chances of Covid-19 infection.

Gujarat Cooperative Milk Marketing Federation (GCMMF) managing director RS Sodhi said ice-cream sales of its Amul brand have crossed close to 40% over the summer of 2019 so far: “This year, summer has come 20-25 days early, push-cart workforce which had left for villages last two years has returned which is helping to mobilise sales, there has been minimal price increases in ice-cream compared to other FMCG products, and there’s pent up demand which was impacted last two years because of the pandemic.”

A spokesperson for Mother Dairy said its ice-cream sales have clocked growth of over 50% versus pre-Covid levels on the back of rising temperatures, enhanced number of distribution assets coupled with the wedding season and opening up of restaurants, offices and educational institutions. “While the surge in demand is across categories, however, we are seeing the demand more skewed towards impulse category,” a company spokesperson said.

Milind Pingle, chief executive of Allana Consumer Products which distributes the premium London Dairy ice-cream in India, said the company expects to see sharp, double-digit growth this summer. “We have invested in e-commerce and expect London Dairy sales to not only accelerate across aggregators platforms and quick commerce, but also through modern and traditional trade,” he said. Pingle said sales are escalating for both in-home packs and impulse consumption with reopenings of hotels, restaurants, schools and colleges which are "critical enablers for ice-cream consumption".

For soft drinks, the April-June months contribute over 65% to overall sales of the Rs 20,000-crore packaged beverages category, and out-of-home channels including restaurants and bars, cinemas, airports and entertainment complexes account for more than half of soft drink sales.

Both Coca-Cola and PepsiCo have announced increasing capacity to meet rise in demand and mobilised retail channels to increase stock replenishment cycles while premium ice-cream brand London Dairy said sales have surged through e-commerce platforms.

“This year, demand has overtaken supplies in our plants; our lines are running to full capacity which is happening after at least four years,” said the chief of one of Coca-Cola’s biggest bottling partners. He requested not to be named.

Analysts said both soft drinks and ice-cream categories are bucking the trend, at a time when there is steep increase in input costs amid an otherwise slowing consumer market, which is seeing downtrading or consumers buying cheaper edible oils, toothpaste, soap and biscuits.

Brokerage Motilal Oswal wrote in a recent report on the listed Varun Beverages that the soft drinks category is an outlier and that it expects further revival in out-of-home consumption with the opening up of business operations and travelling activity, as well as higher in-home consumption with growing penetration of refrigerators in rural and semi-rural areas per household and power availability for longer hours.

स्रोत : economictimes.indiatimes.com

## Cost and management accounting (practise kit caf

Cost and Management accounting (CMA) Practise Kit (To facilitate CA (CAF student).CAF-08, ICAP, CA Notes)

## Cost and management accounting (practise kit caf-08)

Khaqan5 Oct. 01, 2019 • 0 likes • 520 views

Cost and Management accounting (CMA) Practise Kit

(To facilitate CA (CAF student).CAF-08, ICAP, CA Notes)

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