Which of the Following Quotes by a Store Manager Describes

question 45

Multiple Choice

Which of the following quotes by a store manager describes price discrimination in action?

• A)"Since bulk goods are cheaper to package, I can offer a lower price."
• B)"I can get a 4-litre jug of milk from the supplier for less than four 1-litre cartons, so I can sell it for less per litre."
• C)"We offer our employees a 10 percent price discount."
• D)"I offer discounts if you buy 12 apple juices in one box, although it costs me the same as if I split it up and sell them separately."
• E)"We set price equal to average variable cost."

Understand how changes in balance sheet accounts affect cash flows and figure into the cash flow statement.

Distinguish between the accounting treatments and financial reporting under US GAAP and IFRS, especially regarding cash flow reporting.

Learn about the components of a company's balance sheet (assets, liabilities, equity) and their definitions.

Analyze financial flexibility and liquidity measures and how they reflect a company's ability to meet its obligations and take advantage of investment opportunities.

---

Definitions:

Operating Leverage

A measure of how revenue growth translates into growth in operating income, determined by the proportion of fixed costs to variable costs.

Variable Costs

Costs that change directly in proportion to changes in the volume of production or activity level, such as raw materials, labor costs directly tied to production, and utility costs for manufacturing facilities.

Fixed Costs

Expenses that do not change in total despite changes in the volume of goods or services produced or sold.

Sales

The total revenue earned from selling goods or services over a specific period.