A Manufacturer of Consumer Electronics, Wanting to Reduce Costs, Relocates

question 50

True/False

A manufacturer of consumer electronics, wanting to reduce costs, relocates his production facility to a rural location. This is an example of a cottage industry.

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Definitions:

Residual Income

The income that exceeds the minimum required return on investment or capital employed; often used as a performance measure.

Return On Investment

A measure of the profitability of an investment, calculated as the net profit from the investment divided by its initial cost.

Sales Dollars

The total revenue generated from the sale of goods or services, typically reported in a company's financial currency.

Service Department Costs

Expenses related to the departments that support the main operations of a business but do not directly generate revenue, such as human resources or maintenance.