If You Are in the Business of Selling Chicken and the Price

question 97

Multiple Choice

If you are in the business of selling chicken and the price of selling chicken and the price of beef both were to drop dramatically, what should you do with your inventory level of chicken?

• A)Keep it the same.
• B)Decrease the inventory.
• C)Increase the inventory.
• D)Get into the beef business.

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Definitions:

Accumulated Depreciation

Represents the total amount of a company's asset depreciation expense since the asset was acquired.

Gross Profit

The financial metric representing the difference between revenues and the cost of goods sold, before deducting overhead, payroll, taxation, and interest payments.

Operating Expenses

Costs associated with a company's main operational activities, excluding cost of goods sold, including expenses like rent, utilities, and salaries.

Net Income

The profit of a company after all expenses and taxes have been subtracted from total revenue.