John Owen Owns a Drugstore That Is Experiencing Significant Growth $$\begin{array} { | c | c | } \hline \text { Quarter } & ( \$ 000 ) \\\hline 1 & 240 \\2 & 180 \\3 & 220 \\4 & 260 \\\hline\end{array}$$

question 76

Multiple Choice

John Owen owns a drugstore that is experiencing significant growth.Owen is trying to decide whether to expand its capacity,which currently is $200,000 in sales per quarter.Sales are seasonal.Forecasts of capacity requirements,expressed in sales per quarter for the next year,follow.
$$\begin{array} { | c | c | } \hline \text { Quarter } & ( \$ 000 ) \\\hline 1 & 240 \\2 & 180 \\3 & 220 \\4 & 260 \\\hline\end{array}$$
Owen is considering expanding capacity to the $250,000 level in sales per quarter.The before-tax profit margin from additional sales is 15 percent.How much would before-tax profits increase next year because of this expansion?

• A) less than $15,000
• B) more than $15,000 but less than $16,000
• C) more than $16,000 but less than $17,000
• D) more than $17,000

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Definitions:

Organizational Identification

The psychological connection between an employee and their organization, influencing their sense of belonging and loyalty.

Work Motivation

The internal and external forces that influence an individual’s willingness to perform and engage in their job tasks.

Reward Dissatisfaction

A state of discontent experienced by employees due to perceived unfair compensation, benefits, or recognition in comparison to their efforts or performance.

Unionized Firm

A company where the workforce is organized into a union, which negotiates with the employer on matters such as wages, hours, and working conditions.