Assume that the reduced cost of a decision variable is -$20 for a maximization problem. This implies that:
A) the objective function value will decrease by $20 if we do not produce any units of this product
B) the objective function value will not change if we produce an additional unit of this product
C) the objective function value will increase by $20 if we produce an additional unit of this product
D) the shadow price value will decrease by $20 if we produce an additional unit of this product
E) the objective function value will decrease by $20 if we produce an additional unit of this product
E
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Many managers fail to exercise strong leadership for the following reasons except:
(a) they would rather be popular than effective, (b) they mistakenly believe that time solves all problems, (c) they seek to solve problems too quickly without getting all the facts, (d) they have more faith in the behavior of their employees than is justified, (e) none of the above; all are possible reasons.
Pastern Industries has an 80% ownership stake in Sascon Incorporated. At the time of purchase, the book value of Sascon's assets and liabilities were equal to the fair value
The cost of the 80% investment was equal to 80% of the book value of Sascon's net assets. At the end of 2014, they issued the following consolidated income statement: Sales $930,000 Cost of sales (470,000) Operating expenses (202,000) Noncontrolling interest share (23,000) Controlling interest share $235,000 Shortly after the statements were issued, Pastern discovered that the 2014 intercompany sales transactions had not been properly eliminated in consolidation. In fact, Pastern had sold inventory that cost $80,000 to Sascon for $90,000, and Sascon had sold inventory that cost $50,000 to Pastern for $65,000. Half of the products from both transactions still remained in inventory at December 31, 2014. Required: Prepare a corrected income statement for Pastern and Subsidiary for 2014. What will be an ideal response?