The Robert's Resort Chain of Hotels Needs to Renegotiate the Union

question 7

Multiple Choice

The Robert's Resort chain of hotels needs to renegotiate the union contract with the powerful Hotel Workers of Canada Union every other year.Although the hotels in the chain are all successful, labour costs are a major expense for the business, and management wants to ensure that the company remains profitable.Which one of the following earnings management techniques might the Robert's Resort management be using?

• A)Managing earnings to increase income.
• B)Managing earnings to decrease income.
• C)Managing earnings to smooth income.
• D)Taking a Big Bath.

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Definitions:

Lights Out Factory

A manufacturing plant that operates automatically without the need for human presence on-site, usually controlled by computers or robots.

Flexible Production Systems

Production methods designed to easily adapt to changes in the quantity and type of product being manufactured.

Information Technology

The use of computers, networking, and infrastructures to create, process, store, secure, and exchange all forms of electronic data.

Mass Production Systems

A method of manufacturing that uses machinery and assembly lines to produce large quantities of identical goods at a low cost.