The 80/20 Rule Is a Theory That Suggests That

question 40

Multiple Choice

The 80/20 rule is a theory that suggests that

• A)20 percent of the total demand for products comes from 80 percent of the target market.
• B)80 percent of a firm's profits is generated from 20 percent of its product line.
• C)80 percent of a firm's products are marketed to only 20 percent of the population.
• D)20 percent of heavy users account for 80 percent of the total demand.
• E)20 percent of a firm's products are never marketed to 80 percent of consumers.

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Definitions:

Gain or Loss

The financial result from selling an asset for more (gain) or less (loss) than its carrying amount on the books.

Disposal

The process of getting rid of an asset, including selling, scrapping, or another method of removal from the company's possession.

Accumulated Depreciation

The total amount of a tangible asset's cost that has been allocated as depreciation expense over its useful life up to a specific date.

Residual Value

The projected worth of a tangible asset upon reaching the conclusion of its operational lifespan.