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At the end of a given year, a business counted too much ending inventory by mistake. Which of the following describes one way in which the overstated ending inventory will affect the business's financial statements for that year?
A business that makes only one type of product sold 10,000 units at $50/unit and made a profit of $100,000 last year. The manager is forecasting that another 12,000 units will be sold this year. Assuming that the unit price, the variable cost of $20/unit, and the fixed costs remain at the same level, what will be the total profit if sales increase to 12,000 units?
A customer's total bill for two perennial plants is $10. The cashier informs the customer that there is a discount of 10% on quantities of 10 or more perennials. The customer decides to get 10 more plants. What will be the customer's total bill for the 12 plants?
An insurance company sells life insurance policies for $300 each. Each policy carries a death benefit of $120,000. The probability that a policyholder will claim the death benefit during the year is 1 in 600. If the company expects to sell a minimum of 1,200,000 policies, what is the expected profit per policy sold?
