Krispy Kreme Is Considering Building a Franchise in a Particular

question 69

Multiple Choice

Krispy Kreme is considering building a franchise in a particular city. It will use a survey to determine the extent of interest among residents of the city. Which of the following procedures would be most appropriate for obtaining a statistically unbiased sample?

• A) Survey a selection of people who are listed on the residential roll sheets of the city.
• B) Survey a random selection of customers coming out of other donut shops in the city.
• C) Survey a selection of people whose names are randomly chosen from the telephone directory of the target city.
• D) Survey a random selection of people whose names are obtained from national sales records of Krispy Kreme customers.
• E) none of the above procedures would be most appropriate.

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Definitions:

Manufacturing Margin

The difference between the sales revenue generated from manufactured goods and the cost of goods sold (COGS) associated with producing those goods.

Variable Costing

A method of accounting that encompasses only the variable costs of production, such as direct materials, direct labor, and variable overhead, in the computation of product costs.

Net Income

The net earnings of a business once all costs and taxes are subtracted from its total income.

Variable Costing

An accounting method that only includes variable production costs (direct materials, direct labor, and variable manufacturing overhead) in product costs, with fixed overhead treated as a period expense.