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Nancy Company Has an Idle Machine That Originally Cost $200,000

question 78

Multiple Choice

Nancy Company has an idle machine that originally cost $200,000.The book value of the machine is $100,000.The company is considering three alternative uses of the idle machine:
Alternative 1: Disposal of machine.Disposal value of machine is $50,000.
Alternative 2: Use the idle machine to increase production of Product A.Contribution margin from additional sales of Product A is estimated to be $60,000.
Alternative 3: Use the idle machine to increase production of Product B.Contribution margin from additional sales of Product B is estimated to be $70,000.
When considering the opportunity cost of the idle machine,what is the net financial benefit from Alternative 3?

Recognize the importance and types of non-personal promotional communication.

Comprehend the concept of integrated marketing communications and its importance in creating a consistent message.

Grasp the significance of public relations within the promotion mix.

Understand how the promotion mix changes throughout the product life cycle.

Definitions:

Reciprocity Norm

A social norm that expects individuals to help those who have helped them, fostering mutual aid and cooperation.

GRIT

A personality trait characterized by perseverance and passion for achieving long-term goals.

Attribution Theory

The theory concerning how people explain individual occurrences of causation, including how people infer the causes of their own and others' behaviors.

Cognitive Dissonance Theory

suggests that individuals experience discomfort (or dissonance) when holding conflicting cognitions, leading them to change attitudes, beliefs, or actions to reduce the dissonance.