Brendan and Sean Combined Their Love of Baseball with a Business

question 254

Multiple Choice

Brendan and Sean combined their love of baseball with a business venture. They purchased a small cart and began selling memorabilia outside of their hometown stadium. Their first year went well, but the past two years have been quite a struggle. Due to poor economic conditions and the team's horrible record, ticket sales at the stadium are down, which has significantly hurt their sales as well. As a recent business graduate, you explain to Brendan and Sean that

• A) this type of business is always high risk because it is seasonal.
• B) the business does not fill a sufficient need for most people.
• C) environmental circumstances are dynamic and tough to control.
• D) social entrepreneurs are currently getting most of the attention.

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Definitions:

Activity-Based Costing

A costing method that assigns costs to products and services based on the resources they consume.

Labor-Related

Pertaining to aspects of work or employment, often focusing on workers, their conditions, wages, or productivity.

Direct Labor-Hours (DLH)

The total amount of labor time expended directly on manufacturing or producing goods, often used to allocate costs to products.

Activity-Based Costing

A costing approach that estimates the expense of products or services by determining the activities needed for their production, thus offering a more precise understanding of costs.