John and Mary Work at a Bakery

question 41

Multiple Choice

John and Mary work at a bakery. John can decorate either 10 ice-cream cakes or 4 wedding cakes; Mary can decorate either 8 ice-cream cakes or 2 wedding cakes. According to this scenario

• A)the opportunity cost of decorating a wedding cake for Mary is 4 ice-cream cakes.
• B)the opportunity cost of decorating a wedding cake for Mary is 1/4 ice-cream cake.
• C)the opportunity cost of decorating a wedding cake for Mary is 2 1/2 ice-cream cakes.
• D)the opportunity cost of decorating a wedding cake for Mary is 2/5 ice-cream cake.

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Definitions:

Intra-Entity Inventory Sales

Sales transactions of inventory between divisions or subsidiaries within the same parent company, not affecting consolidated financial results until sold externally.

Upstream

In the context of oil and gas, it refers to exploration and production activities; in supply chain management, it relates to the procurement of raw materials.

Downstream

In business, refers to processes or activities that occur toward the end of a supply chain, often associated with the distribution and sale of finished products.

Equity Method

This involves documenting investments when the investor holds substantial influence over the entity being invested in, without having total control.