At the End of the Fiscal Year, Apha Airlines Has

question 46

Multiple Choice

At the end of the fiscal year, Apha Airlines has an outstanding purchase commitment for the purchase of 1 million gallons of jet fuel at a price of €4.60 per gallon for delivery during the coming summer. The company prices its inventory at the LCNRV. If the market price for jet fuel at the end of the year is €4.25, how would this situation be reflected in the annual financial statements?

• A) Record unrealized gains of €350,000 and disclose the existence of the purchase commitment.
• B) No impact.
• C) Record unrealized losses of €350,000 and disclose the existence of the purchase commitment.
• D) Disclose the existence of the purchase commitment.

Appreciate the impact of incentive plans on employee motivation and organizational success.

Understand how incentive pay can be linked to performance appraisals.

Recognize the role of employee's perception in the effectiveness of incentive pay plans.

Identify the factors necessary for the success of group incentive programs like gainsharing.

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Definitions:

Total Utility

The total satisfaction received from consuming a particular quantity of goods or services.

Marginal Utility

The boost in contentment or usefulness a consumer gets from purchasing one more unit of a product or service.

Dozen Oysters

A quantity unit referring to a grouping of twelve oysters, often used in the sale and serving of this seafood.

Beers

Alcoholic beverages made from fermented grains, primarily barley, and flavored with hops and other ingredients.