Which One of the Following Should Not Be Included in the Analysis

question 64

Multiple Choice

Which one of the following should not be included in the analysis of a new product?

• A) Increase in accounts payable for inventory purchases of the new product
• B) Reduction in sales for a current product once the new product is introduced
• C) Market value of a machine owned by the firm which will be used to produce the new product
• D) Money already spent for research and development of the new product
• E) Increase in accounts receivable needed to finance sales of the new product

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Definitions:

Work in Process

Inventory items that are in the production process but are not yet complete.

Finished Goods

Items that are fully manufactured but remain unsold and undistributed to the final consumer.

Raw Materials

The basic materials from which products are made, used at the start of the production process.

Requisitioned

The process of formally requesting or acquiring goods or services needed for business operations or production.