Prior to Accounting for Product Transfers, a Manager Calculates Her

question 26

Multiple Choice

Prior to accounting for product transfers, a manager calculates her food cost as 32.3% and her beverage cost as 22.5%. Total transfers from her kitchen to the bar equal $1,000 and total transfers from the bar to the kitchen equal $500. After these transfers have been made

• A) both the food and beverage cost % will increase.
• B) the food cost % will decrease and the beverage cost % will increase.
• C) the food cost % will increase and the beverage cost % will decrease.
• D) both the food and beverage cost % will decrease.

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Definitions:

Perfectly Competitive Market

A market structure characterized by many buyers and sellers, all of whom have full information and the products are homogeneous, leading to no single buyer or seller being able to influence the market price.

Quantity Of Output

The total amount of goods or services produced by a company, sector, or economy during a specified period.

Marginal Revenue

The extra revenue earned by selling an additional unit of a product or service.

Total Revenue

The sum total of financial gains a company secures from its commercial transactions or service provisions during a certain interval.