Sonny (Australia) Ltd Is a Manufacturer of Electronic Goods

question 29

Multiple Choice

Sonny (Australia) Ltd is a manufacturer of electronic goods.Which of the following is an example of resale price maintenance?

• A)Three retailers agree to sell all Sonny goods at 50% more than cost price.
• B)Sonny refuses to supply its goods to any retailer who engages in loss leading.
• C)Sonny supplies its goods to retailers on the condition that they do not sell the products below the prices set by Sonny.
• D)Sonny refuses to supply its goods to a particular retailer after they breach a condition not to sell Sonny products above a fixed price.

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Definitions:

Double Declining-balance

A method of accelerated depreciation where an asset’s value is reduced at double the rate of traditional straight-line depreciation.

Net Income

The resultant profit or loss after all expenses and incomes, including tax expenses have been accounted for, over a period.

Straight-line Method

An approach to determining depreciation by consistently allocating the expense of an asset throughout its expected life.

Residual Value

The estimated amount that an asset will be worth at the end of its useful life, often used in accounting for depreciation purposes.