Williard Corporation Regularly Sells Inventory Items to Its Subsidiary, Petty

question 3

Multiple Choice

Williard Corporation regularly sells inventory items to its subsidiary, Petty, Inc. If unrealized profits in Petty's 20X1 year-end inventory exceed the unrealized profits in its 20X2 year-end inventory, 20X2 combined

• A)cost of sales will be less than consolidated cost of sales in 20X2.
• B)gross profit will be greater than consolidated gross profit in 20X2.
• C)sales will be less than consolidated sales in 20X2.
• D)cost of sales will be greater than consolidated cost of sales in 20X2.

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Definitions:

Downsizing Strategy

A business strategy involving the reduction of a company's workforce in order to cut costs and improve efficiency or profitability.

Voluntary Severance

An option allowing employees to choose to leave their positions in exchange for a pre-determined compensation package.

Work Redesign

The process of altering jobs and work processes to improve employee satisfaction and productivity.

Automation

The shift toward converting work that was traditionally done by hand to being completed by mechanical or electronic devices.