Wm Wrigley Jr

question 119

Multiple Choice

Wm. Wrigley Jr. Company once made only chewing gum. When Wrigley bought Life Savers (a line of candy mints) and Altoids (a line of breadth mints) from Kraft, chewing gum then constituted less than 95 percent of revenues. Thus, Wrigley

• A) was moving away from its traditional single-business strategy toward a dominant strategy.
• B) was moving away from its traditional dominant strategy toward a related linked strategy.
• C) became a conglomerate since Life Savers and Altoids are unrelated businesses.
• D) probably planned to restructure these companies and sell them off.

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Definitions:

Net Income

The residual earnings of a company following the subtraction of all costs and taxes from its revenue.

Costing Method

An accounting approach used to value inventory and determine the cost of goods sold, which can vary, such as FIFO (First-In, First-Out) or LIFO (Last-In, First-Out).

Ending Inventory

The value of goods available for sale at the end of an accounting period, calculated as the beginning inventory plus purchases minus the cost of goods sold.

Cost of Goods Sold

The direct costs tied to the production of the goods sold by a company, including materials and labor.