Which of the Following Would Not Lead to a Build

question 95

Multiple Choice

Which of the following would not lead to a build up inventory as a strategy to increase operating income?

• A) Cutting overhead costs as year-end approaches.
• B) Plant manager switching to make products that absorb the highest amounts of fixed cists
• C) Plant manager accepting an order to increase production and build up inventory when another plant in the same company would be better suited to take on the order
• D) Allocating resources to production by deferring maintenance of equipment and building beyond the current period

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Definitions:

Break-even Point

The point at which total costs and total revenue are equal, resulting in no net loss or gain for a business.

Gross Profit

The financial difference between the revenue generated from sales and the cost of goods sold, before deducting overheads, salaries, and other expenses.

Lodging And Meals

Expenses related to accommodation and food incurred during travel or business trips.

Break-even Analysis

is a financial calculation to determine the point at which revenue received equals the costs associated with receiving the revenue, indicating no profit or loss.