Franklin Carpets Engages in Indirect Exporting, So the Firm Sells

question 111

Multiple Choice

Franklin Carpets engages in indirect exporting, so the firm sells its carpets to a(n) ________.

• A) domestic customer who then sells the carpets to a foreign customer
• B) foreign customer who then sells the carpets to a domestic customer
• C) affiliated company located in a foreign country
• D) foreign customer through e-commerce

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Definitions:

Contribution Margin Ratio

The percentage of each sale that contributes to covering fixed costs, calculated as contribution margin divided by sales revenue.

Fixed Expenses

Expenditures that stay unchanged despite differences in the volume of production or sales, covering items like rental fees, payroll, and coverage costs.

Sales

The exchange of goods or services for money, quantifying the performance and profitability of a business.

Operating Assets

Assets that are used for the day-to-day operations of a business, contributing to its ability to generate revenue.