Which of the Following Is an Example of How a Service

question 80

Multiple Choice

Which of the following is an example of how a service firm might turn unused capacity into revenue using incremental analysis?

• A)An instructor agrees to add an additional student to a class.
• B)An accountant with no extra time agrees to do an extra client's tax return during busy season.
• C)A manufacturing firm that rents assembly line space to a complementary company.
• D)A train company uses a last-minute app to fill empty seats and makes long-term pricing decisions based on average revenue.

---

Definitions:

Decision

The act or process of making choices or judgements based on available data, reasoning, and preferences.

Retained Earnings

The amount of net income left over for the business after it has paid out dividends to its shareholders.

Equity Component

A part of a compound financial instrument that represents a right to equity shares of the issuer, separate from other elements such as a debt component.

Comprehensive Income

The total change in equity for a reporting period other than from transactions with owners, including all unrealized gains and losses.