There Is Often a Limiting Factor That Stops a Business

question 28

Multiple Choice

There is often a limiting factor that stops a business from achieving its objectives to the maximum extent. In most instances, the limiting factor is:

• A) the ability of the business to sell its products.
• B) the unrealistic goals of production managers.
• C) the ability of the business to advertise its products.
• D) the unrealistic objectives set by management.

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Definitions:

Operating Costs

Expenses associated with the day-to-day functions of a business, excluding the costs associated with producing goods or services.

Days Sales Outstanding

A measure of the average number of days that it takes a company to collect payment after a sale has been made, indicating the effectiveness of a company's credit and collection policies.

Receivables

Money owed to a company by its customers for goods or services that have been delivered or used but not yet paid for.

Sales

The total amount of goods or services sold by a business within a certain period.