View Your World, a High- End Window Manufacturer, Directly Pays

question 99

Multiple Choice

View Your World, a high- end window manufacturer, directly pays all of the transaction costs. The managers of View Your World are considering the profit- maximizing location for their plant. If locating the plant closer to its customers saves $7,000 in transportation costs of its windows to its customers, but causes an additional $7,500 in input transportation costs, View Your World______ locate its plant closer to its customers as the marginal benefit is ______than the marginal cost.

• A)should not; more
• B)should; less
• C)should not; less
• D)should; greater

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Definitions:

Gross Profit

The difference between sales revenue and the cost of goods sold, indicating the profitability of a company's core activities.

Periodic Inventory System

An accounting method where inventory is updated and cost of goods sold is calculated at the end of an accounting period.

FIFO

FIFO stands for "First-In, First-Out," an inventory valuation method where goods first acquired are sold or used first, ensuring that older inventory is used before newer inventory.

Ending Inventory

The aggregate worth of merchandise ready for purchase at the conclusion of a financial period.