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Scenario A

question 110

Multiple Choice

Scenario A. The local Ace Hardware Store manager has several decisions she has to make as the week begins. She always comes in early on Mondays to sift through the paperwork on her desk and decide what needs to be done for the week and in which order. The decisions facing her this week are:
1. determining which sales representatives to see this week to place orders.
2. providing a report to the owner detailing her opinion of whether or not she should purchase several more Ace locations that are for sale in the area.
3. interviewing applicants for two open part-time positions and hiring them.
4. providing input to the owner on a possible upgrade to the checkout technology currently in use.

-If,in decision 3,the manager takes the first candidate they see that meets the minimum requirements,without going through every candidate's file to see if anyone else is better,they are

Definitions:

Operating Leverage

The degree to which a firm can increase operating income by increasing revenue, a measure of how sales growth translates to growth in operating income.

Margin of Safety

The difference between actual or expected sales and the break-even point. It measures how much sales can drop before a business incurs a loss.

Relevant Range

The scope of actions where the assumptions regarding variable and fixed costs hold true.

Laser Printers

Devices that utilize a laser beam to produce images on paper, known for their speed and high print quality.