The What Went Wrong Feature in Chapter 14 Focuses on the Failure

question 47

Multiple Choice

The What Went Wrong feature in Chapter 14 focuses on the failure of Crumbs Bake Shop, a specialty-restaurant chain that sold gourmet cupcakes. According to the feature, Crumbs failed due to ________.

• A) lack of funding to facilitate expansion, high real estate costs, management turnover, poor operating margins
• B) no pivot or change in strategy, lack of international expansion, trademark dispute with a competitor, failure to franchise
• C) increasingly crowded market, consumers started losing interest in cupcakes, high real estate costs, and no pivot or change in strategy
• D) lack of funding to facilitate expansion, management turnover, increasingly crowded market, and high fixed costs
• E) high operating costs, trademark dispute with a competitor, consumers started losing interest in cupcakes, and failure to franchise

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Definitions:

Underapplied

Refers to a situation where the allocated manufacturing costs are less than the actual manufacturing costs incurred.

Overapplied

A situation in accounting where the allocated manufacturing overhead cost is more than the actual overhead incurred.

Manufacturing Overhead

Indirect costs attributed to the production process, including costs associated with maintaining the manufacturing facilities.

Overapplied

A situation where the allocated or applied costs in cost accounting exceed the actual costs incurred.