WmWrigley Jr

question 46

Multiple Choice

Wm.Wrigley Jr.Company once made only chewing gum.When Wrigley bought Life Savers (a line of candy mints) and Altoids (a line of breath mints) from Kraft, chewing gum then constituted less than 95 percent of revenues.Thus, Wrigley:

• A) was moving away from its traditional single-business strategy toward a dominant strategy.
• B) was moving away from its traditional dominant strategy toward a related linked strategy.
• C) became a conglomerate since Life Savers and Altoids are unrelated businesses.
• D) probably planned to restructure these companies and sell them off.

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Definitions:

Non-Volume-Based Costs

Costs that do not vary directly with the volume of production or sales, often encompassing fixed costs like rent or salaries.

Volume-Based Costs

Costs that vary directly with the level of production or sales volume, such as direct materials and direct labor, contrasting with fixed costs that remain constant regardless of volume.

Qualitative Characteristics

The attributes that make financial information useful to users, including relevance and faithful representation.

Quantitative Characteristics

Measurable attributes that can be quantified and analyzed numerically, often used in statistical and financial analysis.