Which of the Following Is a Reason Why a Firm

question 61

Multiple Choice

Which of the following is a reason why a firm would experience diseconomies of scale?

• A)To finance an increase in the size of its plant, a firm must borrow more money or sell more shares of stock.
• B)As the size of the firm increases, it becomes more difficult to find markets where it doesn't already have operations.
• C)As the size of the firm increases, it becomes more difficult to coordinate the operations of its manufacturing plants.
• D)As the size of the firm increases, it must operate in other countries where differences in language, customs, and laws increase its average costs.

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Definitions:

LIFO

Stands for Last In, First Out, an inventory valuation method where the most recently produced or purchased items are recorded as sold first.

Periodic Inventory System

An inventory accounting system where inventory counts are performed and updated at specific intervals to determine cost of goods sold and ending inventory levels.

Ending Inventory

The value of goods available for sale at the end of an accounting period. It is the beginning inventory plus purchases minus the cost of goods sold.

FIFO

"First In, First Out," a method used in inventory management and accounting where the oldest inventory items are sold or used first.