1. Which group of tactics would be most commonly used to increase asset turnover? a. Increase capacity to lower plant utilization to minimum levels, increase contribution margins, & increase ROS b. Lower capacity to increase plant utilization to maximum levels, increase contribution margins, & increase ROS c. Increase capacity to lower plant utilization to minimum levels, decrease contribution margins, & decrease ROS d. Lower capacity to increase plant utilization to maximum levels, decrease contribution margins, & decrease ROS 2. Why would your company want to extend out its accounts receivable policy? a. Extending their receivables will slightly increase demand b. Extending their receivables will increase their available cash c. Extending their receivables will make their suppliers happy d. None of the above 3. Besides charging below average prices to customers, select which group of characteristics would be most commonly used by a broad cost leadership strategy. a. Heavily increase automation ratings, invest heavily in marketing, & target a specific group of market segments b. Heavily increase automation ratings, minimize marketing expenses early, & maintain a presence in every market segment c. Slightly increase automation ratings, invest heavily in marketing, & maintain a presence in every market segment d. Slightly increase automation ratings, minimize marketing expenses early, & target a specific group of market segments Solution Part A) Lower capacity to increase plant utilization to maximum levels, increase contribution margins, & increase ROS (which is Option B) _________ Explanation: Idle capacity may result in excess cost for the company. Therefore, it is advisable to lower the capacity so that the plant can be utilized to the maximum possible extent resulting in improved efficiency, productivity and decrease in costs which in turn would increase the contribution margin and provide better return on the sales generated by the company. Efficient utilization of plant and improvement in sales would indicate better utilization of plant in generating sales and therefore, a better asset turnover ratio. ________ Part B) Extending their receivables will slightly increase demand (which is Option A) _________ Explanation: The objective behind the extension of accounts receivable policy would be to attract more customers (and not suppliers) to buy products of the company. Many customers prefer to purchase goods on credit rather than on cash basis. An extension of credit may result in switching of some customers (currently buying products of other suppliers) thereby increasing the demand for the company\'s products/services. ________ Part C) Heavily increase automation ratings, minimize marketing expenses early, & maintain a presence in every market segment (which is Option B) _________ Explanation: The focus of a broad cost leadership strategy would be achieve higher sales in all the market segments on the basis of low price (rather than thro.

1. 10. (TCO H) On May 18, 2011, Sara Douglas purchased 30 shares of WXY stock for $210, and
on October 29, 2011, she purchased 90 additional shares for $900. On November 28, 2011, she
sold 48 shares, which could not be specifically identified, for $480, and on December 8, 2011,
she sold another 25 shares for $150. What is her recognized gain or loss?
Solution