Frito-Lay,a Division of PepsiCo,manufactures,markets and Distributes a Variety of Snack

question 98

Multiple Choice

Frito-Lay,a division of PepsiCo,manufactures,markets and distributes a variety of snack foods,including Fritos corn chips,Lay's potato chips,Cheetos cheese snacks,Doritos tortilla chips,and Quaker Chewy granola bars,just to name the most familiar products.Which of the following costs for Frito-Lay are sunk costs:
1) Commission payments to Frito-Lay sales representatives.
2) All the costs associated with winning approval by the FDA to advertise Frito-Lay's new cheese popcorn snack as a probiotic nutritional supplement.
3) Labor cost for installing two new plasma technology baking ovens at the St.Louis production plant.
4) Legal fees incurred in winning an antitrust lawsuit filed by rival company R.W.Garcia,who sued Frito-Lay for illegal price fixing of flax seed chips.

• A)1
• B)1 and 3
• C)3 and 4
• D)2,3 and 4
• E)1,2,and 4

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Definitions:

Austria-Hungary

A multinational empire in Central Europe formed by a dual monarchy of Austria and Hungary, which existed from 1867 until its dissolution in 1918 following World War I.

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A military coalition formed by Germany, Austria-Hungary, and Italy in 1882, aimed at mutual defense and support in case of attack by other powers.

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A country in Southern Europe, known for its rich history, art, architecture, fashion, and cuisine, and home to the Vatican as well as numerous UNESCO World Heritage Sites.

Schlieffen Plan

A strategic military plan developed by German General Alfred von Schlieffen, proposing a quick victory against France then turning east to fight Russia in a two-front war.