In Deciding Whether to Add or Delete a Product, Service

question 127

Multiple Choice

In deciding whether to add or delete a product, service, or department, the salary of the plant manager is an:

• A) avoidable fixed cost
• B) avoidable variable cost
• C) unavoidable variable cost
• D) unavoidable fixed cost

---

Definitions:

Market Price

The present rate at which a service or asset is available for purchase or sale in a market.

Earnings per Share

A financial ratio that measures the amount of a company's net income that is theoretically available for payment to holders of its common stock.

Book Value per Share

The equity available to shareholders divided by the number of outstanding shares, representing a company's assets minus its liabilities on a per-share basis.

Current Ratio

A liquidity ratio that measures a company's ability to pay short-term obligations with its current assets.