Janet Is Employed as an Executive Within a Major Corporation

question 9

Multiple Choice

Janet is employed as an executive within a major corporation. When she decided to have a child, she stepped down from this position, thus giving up a six-figure income. Janet's situation illustrates which of the following "costs?"

• A) opportunity
• B) direct
• C) indirect
• D) residual

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Definitions:

Lost Sales

Revenue that a company could have earned but didn't because of not having enough stock, closing an order, or other reasons.

Merchandise Inventory

Refers to the goods a company holds for the purpose of selling them to customers. It is considered a current asset on the balance sheet.

Budgeted Cost

This refers to the predicted costs of goods, services, projects, or operations that are planned for a future period.

Merchandise Purchases Budget

An estimate detailing the amount of goods a company plans to purchase over a certain period to meet its sales and inventory needs.