Kendra Is Inquiring About Subsequent Events with Regards to Lawsuits

question 20

Multiple Choice

Kendra is inquiring about subsequent events with regards to lawsuits and contingent claims.To obtain a meaningful answer,Kendra should hold the enquiry with

• A)in-house legal counsel.
• B)the accountant in charge of the legal liability reconciliation.
• C)the mail clerk.
• D)the assistant controller.

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Definitions:

Variable Cost

Expenses that vary directly with the level of production or sales volume, such as raw materials and direct labor costs.

Advertising Spending

The total amount of money that is allocated towards advertising products or services in various media outlets.

Margin Of Safety

The difference between actual or projected sales and the break-even point, indicating the degree of risk associated with falling sales.

Contribution Margin Ratio

A financial metric that shows the percentage of sales revenue that exceeds variable costs, essentially calculating the portion of sales available to cover fixed expenses.