Assume You Are in the Business of Producing and Selling

question 228

Multiple Choice

Assume you are in the business of producing and selling t-shirts. If you could produce more t-shirts with the same input, what would happen to your productivity and profits assuming the price of your t-shirts remains the same?

• A)increase in productivity, decrease in profits
• B)increase in productivity, increase in profits
• C)decrease in productivity, decrease in profits
• D)decrease in productivity, increase in profits

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Definitions:

FASB

Financial Accounting Standards Board, an independent organization responsible for establishing accounting and financial reporting standards for companies and nonprofit organizations in the United States.

Traditional Model

A conventional or long-established approach or method used in business, economics, or other fields.

Private Company Council

A body that provides recommendations to the Financial Accounting Standards Board (FASB) regarding the accounting treatment for private companies.

Legally Independent

The status of an entity that operates under its own legal rights and responsibilities, separate from its owners or other entities.