Use the Information for the Question(s)below

question 80

Multiple Choice

Use the information for the question(s) below.
Glucose Scan Incorporated (GSI) currently sells its latest glucose monitor,the Glucoscan 3000,to diabetic patients for $129.GSI plans on lowering their price next year to $99 per unit.The cost of goods sold for each Glucoscan unit is $50,and GSI expects to sell 100,000 units over the next year.
-Suppose that if GSI drops the price on the Glucoscan 3000 immediately,it can increase sales over the next year by 30% to 130,000 units.Also suppose that for each Glucoscan monitor sold,GSI expects additional sales of $100 per year on glucose testing strips and these strips have a gross profit margin of 75%.Considering the increase in the sale of testing strips,the incremental impact of this price drop on the firm's EBIT is closest to:

• A)a decline of $1.5 million.
• B)a decline of $0.7 million.
• C)an increase of $0.7 million.
• D)an increase of $1.5 million.

Distinguish between appropriate and inappropriate application scenarios for job order costing in various industries.

Grasp the significance of time-related documents and their role in allocating labor costs to jobs.

Understand the purpose and use of materials requisition in manufacturing and merchandising companies.

Grasp the application and mechanics of job order cost accounting systems, including the treatment of overhead costs.

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Definitions:

Self-Awareness

Being aware of one's own identity, feelings, reasons, and aspirations.

Self-Analysis

The process of examining one's own thoughts, feelings, and behaviors to gain self-awareness and understanding.

Emotional Stability

A personality trait that involves the ability to remain calm, composed, and steadfast under stress or during difficult situations.

Perception

The process by which individuals interpret and organize sensory information to give meaning to their environment and experiences.