Managers Should Discontinue a Business If Which of the Following

question 30

Multiple Choice

Managers should discontinue a business if which of the following is less than the sum of relevant fixed costs and opportunity costs?

• A) Profit
• B) Contribution margin
• C) Total cost
• D) Variable cost

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Definitions:

Internal Control

Practices and procedures deployed by a company to verify the honesty of its financial and accounting figures, enhance responsibility, and eliminate swindling.

Inventoriable Costs

Direct costs associated with the acquisition or production of goods that are held for sale in the ordinary course of business.

Closing Entries

Closing entries are journaled at the end of an accounting period to transfer the balances in temporary accounts to permanent accounts, thereby resetting the temporary accounts for the next period.

Natural Resources

Natural resources are raw materials that are derived from the environment, such as minerals, forests, water, and fertile land, which can be used for economic gain.