Vignette #2 Sue and Her Friends Are Having Lunch in the School

question 73

Multiple Choice

Vignette #2 Sue and her friends are having lunch in the school cafeteria. Sue is drinking bottled water, Joe is drinking Gatorade, Ben has a soft drink, Marsha is sipping iced tea, and Tom is drinking vitamin-enhanced water. Tom thinks he is drinking the best beverage of all because it has vitamins, minerals, amino acids, and some herbs in it. Marsha is counting on the caffeine to keep her alert during her English class and Sue thinks she made the best choice. Ben really doesn't think much about what he drinks at all. Let's answer these questions and learn more about these beverages.
Which would be a good reason for Sue to purchase bottled water?

• A) It is healthier than tap water.
• B) It is purer than tap water.
• C) It tastes better than Sue's tap water.
• D) It has to meet higher standards for quality than tap water.
• E) It includes minerals in a highly digestible form.

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Definitions:

Manufacturing Margin

The difference between the sales revenue generated from manufactured goods and the cost of goods sold.

Variable Costing

An accounting method that considers only variable costs in calculating the cost of goods sold and determining profitability.

Manufacturing Margin

The difference between the sales income generated by manufactured goods and the cost of goods sold.

Absorption Costing

An accounting method that includes all manufacturing costs – direct materials, direct labor, and both variable and fixed overhead – in the cost of a product.