Fleming Company Had the Following Results of Operations for the Past

question 93

Essay

Fleming Company had the following results of operations for the past year:
$\begin{array}{lr}\text { Sales (10,000 units at } \$ 6.80) & \$ 68,000 \\\text { Materials and direct labor } & (20,000) \\\text { Overhead (40\% variable) } & (10,000) \\\text { Selling and administrative expenses (all } & \underline {(6,000)} \\\text { fixed) } & \\ \text { Operating income } & \underline { \$ 32,000}\end{array}$ A foreign company (whose sales will not affect Fleming's regular sales)offers to buy 2,000 units at $5 per unit.In addition to variable manufacturing costs, there would be shipping costs of $1,200 in total on these units.Should Fleming take this order? Explain.

Understand the principles of discounted cash flows to value conditional sale contracts and other financial agreements.

Understand the concept of compound interest and its application in financial planning.

Calculate the future value of investments using different compounding periods.

Assess the necessary initial deposit for reaching specific financial goals with given interest rates and time frames.

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Definitions:

Performance Monitoring

The continuous process of tracking and evaluating the efficiency, output, or quality of work by individuals, teams, or systems within an organization.

Top Management

The highest level of executives responsible for the direction and strategy of an organization or company.

Miles and Snow Adaptive Model

A strategic management theory that categorizes companies into four types (Defenders, Prospectors, Analyzers, Reactors) based on their response to environmental changes and competitive structures.

Market Share

The portion of a market controlled by a particular company, expressed as a percentage of total sales in an industry.