The Use of Too Much Service Capacity Can Result In

question 50

Multiple Choice

The use of too much service capacity can result in?

• A) Idle servers
• B) High labor costs
• C) Idle servers and high labor costs
• D) Long customer wait times and lost sales

---

Definitions:

Phantom Profits

Profits recorded in the accounting books but not actually realized through cash transactions, potentially leading to a misleading financial condition.

FIFO Costing Assumption

A method used in accounting that assumes the first items of inventory purchased are the first ones sold.

Specific Identification Method

The specific identification method is an approach to inventory valuation that tracks the cost of individual items or groups of similar items.

Inventory Costing

The method of accounting that assigns costs to inventory, typically involving the calculation of costs of goods sold and ending inventory values.