Sasha Cat Company Sells One of Its Products for £100

question 96

Multiple Choice

Sasha Cat Company sells one of its products for £100 each. Sales volume averages 750 units per year. Recently, its main competitor reduced the price of its product to £80. Sasha Cat Company expects sales to drop dramatically unless it matches the competitor's price. In addition, the current profit per unit must be maintained. Information about the product (for production of 750) is as follows: The nonvalue-added cost per unit is

• A) £41.67.
• B) £43.33.
• C) £40.47.
• D) £38.33.

Analyze and prepare adjusting entries for bad debt expense using the aging method and percentage of sales or receivables.

Identify and journalize transactions under the direct write-off method of accounting for uncollectible receivables.

Understand the concept and calculation of interest, maturity value, and terms related to notes receivable.

Recognize indicators that a receivable may be uncollectible.

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Definitions:

Management Team

A group of individuals at the top level of an organization who are responsible for making strategic decisions and ensuring the company achieves its goals.

Competitive Advantage

A condition or unique attribute that allows a company to outperform its competitors, securing a superior position in the market.

Market Opportunity

The identification of a specific market need that can be met by a new product or service, offering potential for business growth.

Sole Proprietor

A business owned and run by one individual where there's no legal distinction between the owner and the business entity.