Use the Information Below to Answer the Following Questions The Fixed Costs Have Been Shared Equally Between the Three

question 24

Multiple Choice

Use the information below to answer the following questions.
Travel Made Easy Ltd provides three services: International travel, Interstate travel, and Holiday Packages. The results for the year were as follows: $$\begin{array} { l r r c r } & \text { International } & \text { Interstate } & \text { Packages } & \text { Total } \\\hline\text { Revenue } & \$ 200,000 & \$ 200,000 & \$ 100,000 & \$ 500,000 \\\text { Variable costs } & \underline{ 50,000}& \underline{60,000} & \underline{40,000 }& \underline{ 150,000 }\\\text { Contribution } & 150,000 & 140,000 & 60,000 & 350,000 \\\text { Fixed costs } & \underline{90,000}& \underline{90,000} & \underline{90,000 }& \underline{270,000} \\\text { Net Profit } & \underline{\$ 60,000} & \underline{ \$ 50,000 }& \underline{ ( \$ 30,000 ) } & \underline{ \$ 80,000} \\\end{array}$$ The Fixed costs have been shared equally between the three functions.
-Refer to the table above. Assume that Travel Made Easy can sublet the space occupied by the Holiday Packages for $50,000 per annum. The best advice to management is:

• A)to close the service and save $40,000.
• B)do not close the service, because profit would decrease by $10,000.
• C)do not close the service, because profit would decrease by $40,000.
• D)to close the service, and the business would make a profit of $130,000.

Grasp the concepts and implications of factorial designs in studying external validity.

Understand the concept of threats to internal validity and identify examples such as differential regression, compensatory equalization, and unreliable treatment implementation.

Comprehend the definition and implications of instrumentation in research studies.

Recognize threats to statistical conclusion validity including range restriction and understand how these threats affect the validity of research conclusions.

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Definitions:

Transferor and Recipient

Parties involved in the transfer of assets, where the transferor is the giver, and the recipient is the receiver.

Net Debt

Represents the total debt of a company minus its cash and cash equivalents, indicating the amount of debt that remains if all cash is used to pay down debt.

Government's Finances

An overview of the financial activities, performance, and condition of a governmental entity, including revenues, expenditures, and debt levels.

Financial Position

A snapshot of what a company owns and owes, as well as the amount invested by shareholders, often represented by the balance sheet.