LMN Needs Information About ABC's Plans to Expand

question 5

Essay

LMN needs information about ABC's plans to expand. Thus, it has asked some of its employees to hang out at a bar near LMN and to buy drinks for LMN employees in the hopes of getting these employees "tipsy" enough to disclose these plans to LMN. If LMN acquires the information, can it freely use it? Discuss.

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Definitions:

Fixed Costs

Expenses that do not change in proportion to the activity of a business.

Contribution Margin

The amount by which sales revenue exceeds variable costs; it contributes towards covering fixed costs and generating profit.

Variable Costs

Charges that adjust in relation to the quantity of goods or services manufactured by a corporation.

Fixed Costs

Expenses that do not change in response to the level of goods or services produced by the business, such as rent, salaries, and insurance.