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There Are Many Ways in Which the Management of a Company

question 9

Essay

There are many ways in which the management of a company can manage the reported earnings. Give three reasons why management may want to manage earnings being sure to explain your answer in full.


Definitions:

Marginal Cost

The increase in total cost that arises from an extra unit of production, emphasizing the cost variability.

Total Cost

The sum of all costs associated with producing a certain quantity of goods or services, including both fixed and variable costs.

Computer Software

Programs and other operating information used by a computer to perform specific tasks.

Variable Cost

Costs that vary directly with the level of production or output in a company, such as raw materials and labor expenses.

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