In the Spotlight on Small Business Box Titled,"Let's Go to the Movies

question 172

Multiple Choice

In the Spotlight on Small Business box titled,"Let's Go to the Movies," we learned about a recent marketing idea for movie theatres.As a student of marketing,you understand that the purpose of creating a unique movie experience such as "dinner and a movie" is:

• A)To differentiate your movie theatre from others.
• B)To better utilize the floor space in the movie theatre.It is expensive to permit idle floor space.
• C)To reduce the number of patrons that the theatre serves at one time.
• D)To double the price of a ticket,without doubling the costs.

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Definitions:

Period Costs

Expenses that are incurred regardless of the level of production, such as sales and administrative costs, and are directly expensed on the income statement.

Direct Materials

refers to raw materials that are directly traceable to the manufacturing of a product and are an integral part of the finished product.

Direct Labor

The cost of wages and benefits for employees who are directly involved in the production of goods or services.

Conversion Cost

The total expenses of direct labor and manufacturing overheads used in transforming raw materials into completed goods.